In what is one of the weirdest moves we've seen in 2022, Square Enix decided to sell Crystal Dynamics to Embracer Group for $300m. The news came this morning to many a stunned gamer as the company was one of the more profitable studios working under the SE banner, as it has of the most recognizable AAA titles in Tomb Raider. The studio is currently in the process of making another game in the franchise, as well as a new Perfect Dark game, both of which are still moving forward as of the time this is being written. The sale also includes two more western studios in Eidos Montreal (who was recently responsible for the successful Guardians Of The Galaxy title) and Square Enix Montreal. Both of whom will most likely be getting a rebrand in the immediate future.
What's got a lot of people concerned is the reasoning behind the sale, as SE's own press release for it admits it was done to focus on areas such as blockchain. Which, if they had bothered to poll their own audience as other companies have recently, they would know the vast majority of gamers currently have zero interest in games having anything to do with blockchain, crypto, or NFTs. Here's a snippet from their release.
The Transaction will assist the Company in adapting to the changes underway in the global business environment by establishing a more efficient allocation of resources, which will enhance corporate value by accelerating growth in the Company's core businesses in the digital entertainment domain. In addition, the Transaction enables the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud. The move is based on the policy of business structure optimization that the Company set forth under the medium-term business strategy unveiled on May 13, 2021. The Transaction will also provide an opportunity to better align our overseas publishing function with our organization in Tokyo, revisit the current governance structure and associated reporting lines, and advance integrated group management with the goal of maximizing the worldwide revenue generated from future titles launched by the group's studios in Japan and abroad.
As for Crystal Dynamics and Embracer Group, both parties seem to be fine with the move. Yes, there is some staff who are sad that they're no longer a part of Square Enix, even some who were taken by surprise by the move such as Design Director Jeff Ross. However, it appears EG is looking to move forward with building on the developer's success. The company released their own statement today where they appear to be in good spirits with the purchase and look forward to the new games on the way.
Embracer believes there will be an increasingly strong demand for high-quality content, including AAA single-player games, over the decade. We aim to continue working with leading platforms and license holders and to form deeper strategic relationships with a handful of leading companies in the industry. Furthermore, synergies across Embracer's ecosystem benefit our people and companies. Our approach is that quality comes first in games development, which is why we believe our decentralized operating model of empowering management teams while facilitating synergies positions Embracer for sustainable long-term success.
Right now, it feels like Embracer got the better end of the deal, as they scooped up three studios for $100m a pop, and one of the biggest franchises in gaming history is now under their banner. Meanwhile, Square Enix is taking it on the chin on social media today, with a lot of people criticizing the move for what they believe are misguided ventures. We can totally get behind cloud development since that's probably where gaming is headed in the future, and it would be nice to have more systems that are sustainable for popular titles. But admitting to investing in blockchain development was not their best move, and it will probably be heavily watched and criticized until it ultimately succeeds or fails for the next few years.