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Glen-i

Multiple Potential Buyers May Be Interested in Square Enix

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Quote taken from a machine translation of Bloomberg's Japanese website.

Quote

Several potential buyers have shown interest in Square Enix, CTFN quoted two bankers familiar with the matter.

It is not clear whether the target of interest is only the game department or the entire company.

Article in case anyone can actually read it

This is worrying, especially if one of the big three platform holders are a possibility. Having Square Enix confined to only one console would definitely suck.

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15 minutes ago, Dcubed said:

No Tencent!! That’s a BAD Tencent!!

Also that.

Edited by Glen-i

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Think I can hear all of us collectively groaning on this one. 

In my eyes, there are only two potential suitors with the financial backing to get this deal done and a reason to do it: Tencent and Microsoft. Tencent are just buying and investing in everyone, and Microsoft have been trying to break their way into Japan for nearly two decades; this would be a - very aggressive - way of achieving that. It would shore up Game Pass, obviously (I also imagine they're paying a lot more than they perhaps reasonably should be to get Square Enix's games on there now, even years after release), and in my mind at least, would strengthen Xbox much more than the Bethesda deal did, simply because of the diversity it would add to their portfolio.

Three of the biggest and most recognisable Japanese non-Nintendo game franchises in Final Fantasy, Dragon Quest, and Kingdom Hearts, a massive legacy of titles stretching back to the 80's which could pretty much all be dumped onto Game Pass (this isn't the way I wanted us to get a Final Fantasy I - VI Collection...), not to mention the overwhelming success of Final Fantasy XIV Online after it was turned around (I'd imagine that'd be a potential Minecraft situation where you continue to let it be played on everything), and a myriad of other games like NieR, their mobile offerings, etc., as well as the Luminous Engine, which they've put an ungodly amount of time and resources into, and even away from that, in recent years have successfully pivoted many of their biggest projects onto Unreal Engine.  I haven't even mentioned Square Enix Europe, who have Tomb Raider, Life is Strange, Just Cause, and the recently published Outriders.

Just taking their IP values into account I think this is a potentially bigger deal than the Bethesda one, never mind the fact that if it's Microsoft looking to buy them, Square Enix has ridiculously strong ties with PlayStation across their biggest IP's, and a very healthy relationship with Nintendo too, so the asking price could inflate based purely on that. And let's not forget that their two biggest revealed AAA projects as of right now, Final Fantasy XVI and Forspoken, both already have exclusivity deals with PlayStation. 

In terms of the other console manufacturers, Nintendo might have the cash hidden away to buy out Square Enix, but this would be very unlike them, not to mention that the Switch wouldn't be able to handle what Square Enix has been doing with Final Fantasy for a while now. PlayStation on the other hand already have strong ties with Square Enix without buying them outright, so while this could be a strong move in terms of consolidation, it makes very little financial sense in my eyes from a game sales perspective, and at this point I even feel the impact on console sales would be somewhat minimal. Add to that PlayStation's hard press to forget Japan exists by killing the Vita later this year and the recent closing of Japan Studio, and it's very hard for me to see them chasing Square Enix. 

Regarding the sale, I hope it doesn't happen, regardless of who it is that's looking to buy. Towards the latter half of last generation, Square Enix finally managed to climb out of the hole they were in and start consistently developing and releasing AAA games. With Final Fantasy XVI, Forspoken, Final Fantasy VII Remake Part II, and Dragon Quest XII are all in the works - not to mention everything else they have planned too - and it would suck for anyone to potentially get in the way of the development schedule.

Yes, I own a PlayStation and use it as my main console, but even as someone with plans to pick up a next-gen Xbox at some point down the road, this would anger me more than it would make me want to buy an Xbox. Again, if it's Microsoft, I come back to what I said when we learned that they were acquiring Bethesda last year, about how big acquisitions like this are much worse for the industry than say Sony acquiring Insomniac, because whereas that's a move to consolidate their portfolio with a developer after already maintaining a healthy and stable relationship across many years, this would be another example of what I would deem unnatural growth, which hinders the potential audience for a game more than anything else. 

I still can't believe seemingly no-one is interested in Konami. Metal Gear, Silent Hill, Castlevania, Suikoden, Pro Evolution Soccer...they have little interest in resurrecting these IP's themselves, and whereas I feel like Square Enix is already earning as much as they reasonably can across their catalogue of games right now, you have a lot of room for growth here I feel, so long as they would be allowed to grow. Forget all of the other IP's for a second: you have an honest and genuine FIFA competitor being transitioned to Unreal Engine, which unlike Frostbite actually consistently works, so imagine the potential you'd have backed by Microsoft, who in my eyes has the financial might to quite easily swoop in and get all of the necessary rights to effectively kill FIFA. Then you make it a subscription-based model after a couple of years of increasing sales, during which you let it still be a full purchase on other platforms but included as part of Game Pass, and there you have it. Guaranteed money, we've seen the sins of Ultimate Team scrubbed from the world, and we can all be happy. 

But anyways, back to the topic at hand. Again, if it's Microsoft...at what point would we potentially start seeing "monopolisation" thrown around? Because they can never do something as direct as Disney buying Fox, in that neither one of Nintendo or PlayStation would ever sell to them, but they show no signs of letting up when it comes to these acquisitions (they were in for WB Interactive last year, too, before they took themselves off the market). 

Worrying times. I selfishly hope Square Enix stays put, as it feels like we're still at the start of a renaissance for them on the Japanese side of things, and two of my three most anticipated games are being developed by them (Final Fantasy XVI and Dragon Quest XII). 

Again, this is still a very big if. It could easily be something Square Enix swats away as soon as an offer is made, so while the prospect of them being sold is definitely cause for concern, I'm not going to give it too much thought until we learn more. But if it is a console manufacturer, regardless of who it ends up being, then we all lose. 

Edited by Julius

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Speaking more seriously though? I doubt that there’s really anything to this story.  Japanese execs love going out to dine & drink together (COVID or no COVID) and they love chatting shite about mergers & partnerships that ends up being nothing more than banter.

This is probably just exec banter that has been misinterpreted and shared via a glorified game of telephone.  I really couldn’t imagine S-E wanting to actually sell up.

Edit: Ahh.  Speak of the devil...

Told you.

Edited by Dcubed
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7 minutes ago, Dcubed said:

Speaking more seriously though? I doubt that there’s really anything to this story.  Japanese execs love going out to dine & drink together (COVID or no COVID) and they love chatting shite about mergers & partnerships that ends up being nothing more than banter.

This is probably just exec banter that has been misinterpreted and shared via a glorified game of telephone.  I really couldn’t imagine S-E wanting to actually sell up.

Yeah, I do hope that's the case. It's so funny imagining how that conversation would go. 

Though, while I do agree that I can't see Square Enix wanting to sell either (like I said, they've only really hit their stride in the last few years, unlike Bethesda, who had definitely fallen from grace a bit in recent times), money talks. If Microsoft or Tencent barged in with some crazy offer I have to imagine they'd at least entertain it, even if they didn't accept it. 

 

EDIT: Square Enix officially shutting it down. 

Something could still happen in the future, but yeah, it's wise of them to shut it down now. Rumour-based stock surges are rarely a good thing. 

Edited by Julius
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