The famous Japanese video game publisher Square Enix is separating from its North American studios Crystal Dynamics, Eidos Montreal and Square Enix Montreal, which are responsible for key franchises such as Tomb Raider or Deus Ex. A strong choice that results from a change in strategy. Square Enix plans to invest the $300 million raised to develop blockchain gaming, as well as artificial intelligence and the cloud.
Square Enix sells off its North American subsidiaries
It’s an announcement that has sent shockwaves through the small world of video games. On Monday May 2nd, Square Enix explained in a press release that it was selling its North American subsidiaries Crystal Dynamics, Eidos Montreal and Square Enix Montreal
SQUARE ENIX HOLDINGS CO., LTD. enters into an agreement with Embracer Group for the acquisition of Crystal Dynamics, Eidos-Montreal, Square Enix Montreal, and IP.
Press Release: https://t.co/ooOYacp4PW pic.twitter.com/2PmQE967gk
– Square Enix (@SquareEnix) May 2, 2022
The Swedish group Embracer won the bid for $300 million, or about 285 million euros. A very reasonable sum compared to the latest acquisitions made in this sector. For example, in 2020, Embracer spent 525 million dollars to acquire Saber Interactive, a studio that was much less prestigious than those sold by Square Enix.
This operation makes Embracer a new video game behemoth. In addition to the three studios employing nearly 1,100 people, it gets its hands on a catalogue of some fifty games and on the intellectual property of prestigious franchises such as Tomb Raider, Deus Ex, Legacy of Kain and Thief.
A publisher at the forefront of blockchain gaming
Square Enix will accelerate its transition to blockchain-based games by spinning off its North American subsidiaries. The Japanese publisher had already made a name for itself in this sector at the end of 2019, leading a $2 million fundraising to support the metaverse The Sandbox.
Square Enix had gone even further in November 2021, with the launch of its very first collection of non-fungible tokens (NFTs). These were trading cards based on the Japanese Shi-San-Sei Million Arthur franchise
Square Enix is also looking into entering the blockchain and NFT games segment.
– Shi-San-Sei Million Arthur mobile was proof of concept.
– Believes games are expanding from centralised to decentralised formats
– Expect to benefit as NFTs and token economies take hold. pic.twitter.com/yysZPQu1Zs– Daniel Ahmad (@ZhugeEX) November 5, 2021
On January 1, 2022, Square Enix’s CEO, Yosuke Matsuda, reminded us of the company’s position in favour of the development of NFTs in the video game industry. He took the opportunity to underline Square Enix’s interest in blockchain and cryptocurrencies.
Square Enix faces gamers’ grumbling
For careful observers, Square Enix’s decision is not surprising. It is in line with the company’s business strategy defined in May 2020, with three priorities in terms of investments: artificial intelligence, cloud gaming and blockchain-based video games.
Square Enix is far from being the only video game publisher to bet on NFTs and blockchain technology. Recently, the French giant Ubisoft distinguished itself by becoming a validator of the Tezos blockchain.
However, the Japanese group will have to be careful with these new technologies, as many players are wary of them. They fear that the speculative aspect will prevail over the simple pleasure of playing.
..Ah. I’d missed the part where Square Enix announced they were using the $300 million from the sale of Eidos to invest in A.I., the Cloud (not that one) and… the blockchain.
What a hell pic.twitter.com/n7gwhSYgOo
– Kayane (@Kayane) May 2, 2022
It’s hard to predict the future of blockchain-based video games. But one thing is for sure, if publishers like Square Enix don’t want to alienate a good chunk of gamers, they’re going to have to be smart in their approach. Cryptocurrencies and NFTs need to enhance the experience of video games, not distort it.
