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Square Enix Is Looking To Sell Stakes, Potential Buyers Include Sony And Tencent

square enix

Square Enix is currently looking to sell stakes in the company, and potential buyers include the likes of Sony, Tencent, and Nexon.

During its conference call for the Fiscal Year 2023 results, Square Enix revealed that it is looking to sell stakes in its studios to potential buyers, such as Sony, in order to improve capital efficiency.

Square enix sony

It is speculated that Sony, Tencent, and Nexon to be among the list of interested buyers. As of writing, however, there is no word on whether discussions are already ongoing with any of these potential buyers.

The conference call also revealed that Square Enix sold Crystal Dynamics and Eidos due to concerns that their titles cannibalized sales of the rest of the company’s games, and, therefore, this move would improve capital efficiency. The sale of both studios is phase 1 of this initiative, while phase 2 is the diversification of studio capital structure.

This essentially means that, as a result of rising development costs, Square Enix will be more selective with its resources, limiting the company’s expansion. Therefore, the company is doing a studio portfolio review in order to evaluate these factors. Some studios will remain unchanged, while others will be changed. US/EU studios owned by the company will be impacted by this decision, so that it may allocate further resources to games developed by its Japanese studios.

Square Enix announced that its capitalized game development costs are currently running at US$840 Million. However, after the sale of Crystal Dynamics and Eidos, the company expects to have US$1.4 Billion in cash and zero debt, which should be plenty to fund expanded game investment.

Earlier in 2022, Embracer Group entered an agreement to acquire Square Enix’s Western studios. This includes the likes of Eidos, Crystal Dynamics, and Square Enix Montreal. The acquisition cost Embracer a total of $300 Million.

Muhammad Ali Bari

Muhammad Ali Bari has a knack for covering reviews. He manages our content pipeline, creates timelines for scheduled editorial tasks, and helps us cover exciting content. In his spare time, he enjoys playing multiplayer games.

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