Report: Square Enix Looking To ‘Sell Stakes’ In Its Studios

Square Enix held a financial conference call on Friday, August 5, and the call was described as a doozy by one analyst.

Financial analyst David Gibson took to Twitter to go over what was discussed, including the recent sale of Crystal Dynamics and Eidos and the publisher’s plan to sell stakes in more studios. The $300 million deal in May included Crystal Dynamics, Eidos Montréal and Square Enix Montréal, intellectual property rights to franchises like Tomb Raider, Deus Ex, Thief and more than 50 back-catalogue games from Square Enix.

Square Enix Sells Crystal Dynamics, Eidos-Montréal, IPs including Tomb Raider and more in $300 million Deal

Gibson said the “[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,” noting that it is considered a “phase 1.” The next phase is described as a “diversification of studio capital structure.” This will include a studio portfolio review of Square Enix’s studios, which will reportedly lead to some studios remaining 100% “while others will change (equity method or JV).” Square will also reportedly “look to explore to expand the studio portfolio.”

The largest impact will reportedly affect U.S. an European studios around large titles and “will be able to allocate resources mainly to Japan titles” in an effort to improve capital efficiency, Gibson said.

The analyst said that Square Enix’s capitalized game development costs are currently $840 million, but that post-C/DE sale the company will be working with $1.4 billion in cash and no debt. That cash, Gibson said, “is plenty to fund expanded game investment and not sell down stakes in its studios.”

You can read the full thread here:

Previous articleArcade1Up Brings Marvel vs. Capcom 2 Into Your Homes This Fall
Next articleNew Vampire FPS Tokyo Underground Killer Announced, Coming to PC in 2023
Managing editor over video games here at Cinelinx. Let me lose myself in Animal Crossing and Stardew Valley for days, thanks. KakeBytes is my podcast adventure through gaming history.