Square Enix has reportedly confirmed it’s ‘looking to sell stakes’ in its studios VGC Open main menu Lengthy FIFA players MultiVersus characters Disney Dreamlight recipe list First for Video Game News Follow VGC Square Enix has reportedly confirmed it’ s ‘ looking to sell stakes’ in its studiosThe publisher is said to be looking for ways to concentrate its resources on Japanese games Video Game News 5th Aug 2022 / 11:46 am Posted by Chris ScullionSquare Enix wants to sell stakes in some of its development studios to “improve capital efficiency”, it’s reported. The publisher held a conference call on Friday to discuss its most recent financial results, and following the call Japan-based analyst David Gibson took to Twitter to summarise its plans. According to Gibson, the sale of Crystal Dynamics and Eidos to Embracer Group was phase 1 of Square Enix’s plans, and phase 2 will be “diversification of studio capital structure”. “Rising development costs of making games means with 100% owned studios, they need to be selective and concentrate resources, which limits expansion,” Gibson wrote. As such, the publisher will be “doing a studio portfolio review”.Subscribe to VGC on YouTube He added: “Some studios will remain 100% while others will change (equity method or joint venture)”, Gibson explained, adding that Square Enix “will also look to explore to expand the studio portfolio”. According to Gibson’s reporting on the call, the “biggest impact is on EU / US studios around large titles”, and that the changes mean Square Enix “will be able to allocate resources mainly to Japan titles”. “So Square Enix is looking to sell stakes in its studios to others to improve capital efficiency,” Gibson summarised, “right when others like Sony etc. are buyers. I would expect Sony, Tencent, Nexon etc would be interested.” Gibson also noted that, in his estimation, Square Enix’s decision is “extraordinary” because the publisher should have more than enough money to meet its needs without having to sell stakes in its existing studios. “Square Enix capitalised game dev costs are currently running at $840 million,” he wrote. “But post the Crystal Dynamics / Eidos sale the company will have $1.4 billion in cash and zero debt, which is plenty to fund expanded game investment and not sell down stakes in its studios.” Notice: To display this embed please allow the use of Functional Cookies in Cookie Preferences. Following the conference call, the publisher’s share price rose, and at the time of writing, is currently 11% higher than its price when the market closed yesterday. It was announced in May that Embracer Group had agreed to acquire a large part of Square Enix‘s western development arm for $300 million. When it completes, the deal will see Embracer Group acquiring Crystal Dynamics, Eidos Montreal, Square Enix Montreal and a catalogue of IPs including Tomb Raider, Deus Ex, Thief and Legacy of Kain.The sale of Crystal Dynamics and Eidos to Embracer Group means Square Enix will be giving up a number of high-profile western IPs, the most notable being Tomb Raider Later that month Square Enix indicated that it intended to establish and/or acquire new game studios, which suggested that the company intends to pursue a different direction more closely aligned with its latest company goals. The president of Square Enix stated in April that the company’s Japanese studios shouldn’t try to make games aimed specifically at western players. Further reading 5 Square Enix is selling a Final Fantasy figure that comes with an NFTPaying an extra $30 gets you an NFT that you "may lose access to" in the futureIn an interview with Yahoo Japan, Yosuke Matsuda explains that while it’s vital that Square Enix’s games sell well on a global scale, it would be a mistake if its Japanese developers tried to imitate the western style of games. 23 Comments Related VGC Content Microsoft generated $2 9bn from Xbox Game Pass last year regulatory docs suggest23 hours ago Rivals asked for feedback on Xbox’ s Activision deal in leaked EU questionnaire4 days ago Brazilian regulator says Sony could compete without Call of Duty like Nintendo does4 days ago The FTC could reportedly rule on Microsoft’ s Activision deal by late November5 days ago Popular Now on VGC1 Harley Quinn voice actor criticises Chris Pratt Mario casting ‘ It should be Charles’ 2 Modern Warfare 2 will seemingly require a phone number like Overwatch 23 Phil Spencer could be teasing Xbox s game streaming device in a new office photo4 Interview How PlatinumGames is betting on Nintendo expertise to shape its future5 Platinum thinks hiring of Nintendo veteran can take the companies relationship to the next level More Video Game News1 Tower of Fantasy shows off social gameplay ahead of release next weekPre-loading for the game begins August 92 months ago1 Comment1 US PlayStation shipments were reportedly up 400% last monthPS5 supply appears to be increasing as Christmas approaches1 hour ago1 Comment Overwatch 2 servers down for some as Blizzard removes two heroes temporarilyThe game's rocky launch has caused much fan frustration2 hours ago A Mario Kart 8 Deluxe music datamine may have revealed future DLC circuitsNew snippets give hints on what the upcoming tracks could be2 months agoBy commenting on this article you agree to adhere to VGC’s community guidelines. Notice: To display comments please allow the use of Functional Cookies in Cookie Preferences.