This Monday, May 2, 2022 will go down in history since Square Enix has chosen to permanently separate from its Western studios. A surprising but nevertheless logical decision when you take a step back.
As for the future of the Japanese publisher, it will undoubtedly reserve some good surprises for us… but also some bad ones.
A summary of the situation
For the modest sum of 300 million dollars, the Swedish firm Embracer Group bought several studios and a handful of licenses which belonged to Square Enix. Crystal Dynamics, Eidos Montreal or Square Enix Montreal now fall under the bosom of the European company. Additionally, iconic sagas like Tomb Raider, Deus Ex, Legacy of Kain, Thief and over 50 others are also changing hands. However, the Japanese publisher has surprisingly chosen to keep the distribution rights for Life is Strange, Outriders or Just Cause.
So much for the main facts to remember following the announcement of this separation. Several studios concerned by the agreement have quite logically pronounced themselves. This is for example the case of Crystal Dynamics which will continue its current projects on the next Tomb Raider and on Perfect Dark in partnership with The Initiative. However, we don't yet know what will happen to Marvel's Avengers.
Square Enix and Western games: a deep disenchantment
Towards the end of the 2000s, Japanese productions were losing significant market share to titles designed for Western gamers. Faced with this real turning point, Square Enix made various major investments such as the acquisition of Crystal Dynamics in 2009. Unfortunately, despite the design of relatively successful games such as Tomb Raider (2013), Deus Ex Mankind Divided or even Hitman, Square did not never failed to publicly underline his disappointment with the sales garnered by these very popular licenses.
For example, just a few weeks after the launch of Shadow of the Tomb Raider and despite correct sales which at that time reached 4,12 million units, the CEO of Square Enix described these results as "disappointing". Even going so far as to castigate the quality of the title following its mixed reception by the press. Difficult to put the teams of Eidos Montreal in confidence after such declarations. And let's not forget the brutal divorce with IO Interactive, the Danish studio from which Square Enix separated by ceding the rights to a Hitman saga which had been completely relaunched with the 2016 reboot.
Japan first!
Following these setbacks, the Japanese publisher would probably have sought to separate from all its Western studios to refocus its strategy on Japan. Indeed, the last big boxes of Square Enix come for the most part from the Japanese teams. Whether with the indestructible Final Fantasy XIV, Dragon Quest XI, Kingdom Hearts III or of course Final Fantasy VII Remake, the publisher has perfectly known how to reconnect with its favorite licenses which had nevertheless experienced a real loss of speed in the 2000s. We can therefore partly understand Square Enix's desire to favor its in-house productions.
And the more or less distant future of the firm seems to go in this direction since Final Fantasy XVI, Kingdom Hearts IV, Forspoken or even the second part of Final Fantasy VII Remake hold the attention of several million players at present. Admittedly, Square Enix's purely Western games have never aroused as much enthusiasm as the titles we have just mentioned.
What future for Square Enix?
Let's end with a less pleasant part. Following the announcement of the acquisition of its "Western subsidiary" by Embracer Group, Square Enix could not remain silent. In a press release, the company explained the reasons for this acquisition, stating that it wanted to make major investments thanks to the proceeds of this sale. The areas targeted are those of AI, cloud and blockchain. Indeed, the boss of the Japanese publisher has never hidden his desire to invest massively in NFTs with which he hopes to increase the sale of digital goods. This is what may not please players as they have stepped up to the plate about the policy related to NFTs at Ubisoft.
If no really concrete element comes to support this hypothesis for the moment, many Internet users expect a takeover of Square Enix by PlayStation in the months to come. The two companies have always been extremely close and rumors of a possible marriage regularly roam the internet. Today, since Square has separated from a significant part of its business, the step would be lower for a player such as Sony with a view to a potential takeover since the manufacturer would "only" buy the Japanese teams and licenses.
Last hypothesis (probably the most likely), Square Enix could also remain independent by now having greater latitude to invest massively in its legendary licenses (Final Fantasy, Dragon Quest, etc.) which were initially its only source of income. Omitting the investments that will be made in new technologies, we can say that Square Enix is ​​almost back to its original form. For the best or for the worst ? Only the future will tell us.
