Square Enix Plans on Acquiring New Studios

The last few years have seen plenty of business deals take place in the gaming industry, with multiple high-profile studio acquisitions rocking the proverbial boat. Microsoft has been on a spending spree, culminating recently in the purchase of Activision Blizzard. Furthermore, Sony expanded its studio roster with the addition of Bungie, and Take-Two locked down Zynga, all of which took place in 2022. Now, Japanese gaming powerhouse Square Enix, following the sale of several big-name studios, is looking to get in on this action to rebuild its developer roster, and it intends to purchase more studios.

Square Enix's intent was made clear in its latest end-of-business-year earning report, after it was released for public viewing on May 13. A major point of the report was Square's "medium-term business strategy progress," where the company outlines its plans to hit its "medium-term earnings targets." One way the company says it will do this is by strengthening its "IP ecosystem" by "cultivating robust IP," opening new game studios and looking at possible acquisitions.

This comes on the heels of Square Enix selling Crystal Dynamics, Eidos-Montreal, and Square Enix Montreal to Swedish video game company Embracer Group for $300 million. Alongside the studios, Embracer Group also acquired the Tomb Raider, Deus Ex, Thief, and Legacy of Kain IPs, which includes each IP's full library of games and related DLC.

While some may be surprised by Square Enix looking to rebuild its studio roster so quickly after the Embracer deal, it falls in line with the gaming giant's desire to freshen and "reshape" its portfolio of IPs. An easy way to freshen said portfolio is acquiring studios with existing IPs, which Square feels fits with their vision along with growing the overall portfolio.

The silver lining, in this case, is Square was able to sell three of its top North American developers rather than closing down said studios, a fairly common tactic among the biggest publishers in gaming but can leave a poor taste in players' mouths. Electronic Arts is one of the best examples of this, as the publisher has developed a reputation for its willingness to close down high-profile developers like Visceral Games and Pandemic Studios.

Square's acquisition plans are just one part of this larger outline for hitting its projected financial targets during the current fiscal year. Other plans listed include appointing a chief publishing officer to help "speed up decision-making" to strengthen Square's "publishing structure." It also plans to continue promoting blockchain entertainment and NFT efforts by its newly-established Blockchain Entertainment Business Division.