Square-Enix sells all of its Western game studios—and their games—to Embracer

On Monday, Square-Enix confirmed that it was selling all three of its Western video game studios, along with many significant game series and intellectual property, to the European game publisher Embracer.

The game studios are included in the sale. All three had previously been owned by Square-Enix, and they will be acquired by Embracer, along with a game-publishing catalog of over 50 games.

Square-Enix will continue to publish franchises such as Just Cause, Outriders, and Life Is Strange, despite the fact that not all of the deal's intellectual property has been confirmed thus far.

...or one-fourth of a Gearbox

While console manufacturers Microsoft and Sony have racked up headlines thanks to their own megaton game-maker acquisitions over the past few years, Embracer has quietly built its own roster of predominately European studios over the past decade—and was better known by the name THQ Nordic beginning in 2014, after picking up the rights to that fallen publisher's name (though not all of its games). Its biggest acquisitions in the past 12 months have included video game maker Gearbox Software and board game producer Asmodee Games.

The balance sheet shows that the Square-Enix deal falls well short of the $1 billion mark. Square-Enix announced that Tomb Raider lifetime game sales had exceeded 85 million in October. As a comparison, that sales number is neck and neck with one of Square-Enix's most beloved game series, Dragon Quest, which had sold over 83 million games as of August of last year. Since it is a full intellectual property acquisition, the company will likely claim the rights to Tomb Raider as a Hollywood film series.

Advertisement

Square-Enix put a ton of its Western studios eggs into the game-as-a-service basket of the movie "Captain America: Civil War." This was followed by the flop of the year, the superhero movie "Guardians of theGalaxy", which fell short of sales expectations. Square-Enix's estimation of its combined Western studios' value had fallen between those disappointments and the silence of the sci-fi adventure series.

Embracer immediately beat the drum of its newly acquired intellectual property. The next mainline Tomb Raider game was confirmed as being in development by the announcement of the deal, as well as several other "AAA" projects.

After the announcement went live, Eidos Montreal confirmed in a conference call that its next major game would be set in the world of Deus Ex. Crystal Dynamics recently announced work on the Perfect Dark sequel, but the announcement didn't clarify how that will factor in to this deal.