Embracer Group is acquiring pretty much all of the western studios and their related IP from Square Enix for a meagre sum of $300 million. The roughly 1,100 employees of Crystal Dynamics, Eidos Montreal and Square Enix Montreal will be joining the ever-growing Embracer Group, bringing with them major IPs that include Tomb Raider, Deux Ex, Thief, Legacy of Kain and more than 50 back-catalogue games.
Square Enix says that this $300 million will let them invest in blockchain, AI and the cloud…
The purchase is being made in cash and without debt, subject to the usual regulatory and other external approvals, but should be completed by September 2022.
Lars Wingefors, Co-founder and Group CEO, Embracer Group, said “We are thrilled to welcome these studios into the Embracer Group. We recognize the fantastic IP, world class creative talent, and track record of excellence that have been demonstrated time and again over the past decades. It has been a great pleasure meeting the leadership teams and discussing future plans for how they can realize their ambitions and become a great part of Embracer.”
This is another huge acquisition within the games industry, with Embracer having grown at a ludicrous rate over the past decade. Growing out of Nordic Games, they snapped up a whole lot of THQ (including the name) as that publisher went bust in 2013, but their growth has accelerated rapidly in the last five years. They’ve bought up Koch Media, Tarsier Studios, Coffee Stain, Gearbox, Saber Interactive, Milestone and more in that time, creating a vast empire of publishers and developers across the world and splashing over $8 billion in cash.
Square Enix, meanwhile, loses pretty much all of its western development structure and the IP that it picked up when they acquired Eidos in 2009. They will still have their main Japanese development studios, as well as Square Enix External Studios and the indie publishing arm Square Enix Collective. They will also continue to publish franchises such as Just Cause, Outriders and Life is Strange.
Selling these studios off comes at an interesting time, though does make an element of sense. Crystal Dynamics is just entering pre-production of a new Tomb Raider game using Unreal Engine 5, and has been brought in by Microsoft to co-develop the Perfect Dark reboot, while Eidos Montreal only just released Guardians of the Galaxy last year. Square likely saw an opportunity to get out ahead of needing to pump more time and money into projects that it’s not certain of how to make succeed.