Square Enix may be looking to sell stakes in its studios

Square Enix may be looking to sell stakes in its studios

Photo: Square Enix

Square Enix has been a mainstay in the industry for years, but the Japanese publisher and developer appears to be struggling, after reporting slumping financial results for the first quarter of 2023 (along with the massive success of the MMORPG, Final Fantasy XIV). After publishing those results, Eurogamer reported that the company is looking to “improve capital efficiency” by selling stakes in its studios.

This comes from an internal conference call that was held after sharing the results with an MST Financial analyst David Gibson Detail discussion on Twitter.

Square Enix recently sold a number of its western studios to the Embracer Group, but this was only the first phase of the company’s plans. The next stage is for Square Enix to diversify its studio capital structure, and be more selective in resources due to higher costs.

Resources will focus on games developed in Japan, with European and American studios affected the most.

One way Square Enix believes it will improve its capital efficiency and offset increased costs is by selling stakes in some of its studios. Gibson suspects that companies such as Sony, Tencent and Nexon are among the interested parties. What this means is that Square Enix will not sell the entire studios, but rather sells a percentage of them,

Interestingly, once the sale with Embracer Group is completed, Square Enix will earn $1.4 billion and possibly remove any debt on it, Gibson says.

After the call, Square Enix shares rose. At the time of writing, Square Enix Holdings Co Ltd has seen an 11% increase today.

The company has a huge list of releases to be released at the end of this year, including on the Switch. DioField Chronicle launches on September 22, followed by the Switch port of NieR: Automata in October, the farming simulation Harvestella and Tactics Ogre: Reborn in November, and Dragon Quest Treasures in December. Crisis Core: Final Fantasy VII Reunion is also coming this winter.

Two great games were released earlier in the year, and a long-awaited port – Triangle Strategy, Live A Live and Chrono Cross. It’s been a busy year for Square Enix. We’ll have to wait and see what happens with the company for the rest of the year.

What do you think of this ad? Do you think Square Enix will sell stakes in any of its studios? let’s know.


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