Square Enix Sold To Embracer Group To Save Its Other Game Sales

One of the major trends in gaming this year has been the acquisition and sales of different gaming studios. We started with a bang when Microsoft acquired Activision Blizzard in January. Since then, acquisitions and sales have been continuous for companies in the gaming industry. 

Sony also purchased Bungie earlier this year, and Take-Two Interactive bought Zynga. One company, however, has focused more on selling its assets this year. Square Enix sold two of its major studios, Crystal Dynamic and Eidos-Montréal, to Embracer Group just a few months ago.

Lots of people have failed to understand the reason for these sales, as both the studios were a major part of Square Enix. Recently, the company announced its quarterly results for Q1 2023. In the conference call, Square Enix finally gave an explanation for the sales of these two studios. 

The results conference call for Q1 2023 revealed that the company sold Crystal Dynamics and Eidos-Montréal because it thought its games would eat up the rest of Square Enix’s title sales. David Gibson, an industry analyst, reported this excerpt from the conference call in his tweet, and much of the gaming world is in confusion over this.

1) Crystal Dynamics/Eidos (CD/E) sale was driven by concerns that the titles cannibalized sales of the rest of the group and so it could improve capital efficiency

— David Gibson (@gibbogame) August 5, 2022

Citing that the company’s games will cannibalize its sales when there is a large gap between releases is weird. Final Fantasy is definitely the biggest franchise of Square Enix, and it has years between two mainline entries. Hence, selling studios that have been producing really good games is making players scratch their heads.

Many are saying that this reason from Square Enix is not true and is a complete lie. Considering how its main reason for selling these studios is that its games are too good, players have a hard time believing it. Having Eidos-Montréal and Crystal Dynamics is much better than forsaking control of their high-selling games, according to players.

Speculation has been running wild since this official statement from Square Enix. Players think that the studios only got sold because they were eating up a lot of the capital. Meanwhile, others think that the Japanese government forced the company to sell to keep the economy afloat.

Do keep in mind that these are all just wild speculations from players. However, they make as much sense as the official reason from Square Enix, as the games are still going to come out and cannibalize its sales. Hopefully, we get to see see more games like Guardians of the Galaxy and Tomb Raider from the now-sold studios.