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Square Enix is placing a heavy focus on the consolidation of its business in 2023, according to a newsletter from president Yosuke Matsuda. The Japanese publisher has a busy year ahead, with a lot riding on the likes of Final Fantasy XVI, the continued evolution of Final Fantasy XIV, and maybe even Final Fantasy VII Rebirth — but behind the scenes, the company is committed to solidifying its structure.
You may remember that Square Enix sold off most of its Western studios to Embracer Group in 2022, alongside a bunch of properties like Tomb Raider and Deus Ex. Since then, the publisher's been working to increase its reliance on internal development — and that direction won't be changing.
In the "medium to long term", Square Enix "will accelerate our efforts to strengthen our internal development capabilities by further expanding our internal talent pool, while also more quickly concentrating our resources on the development of titles that are competitive globally." In other words, it wants to commit to its own projects while expanding its portfolio.
When you consider how many new games Square Enix released in 2022, this all makes sense. Indeed, the company also wants to refocus its publishing efforts, as Matsuda notes the importance of "end-to-end global publishing". Previously, the company's Japanese and Western publishing arms operated somewhat independently. Matsuda goes on to clarify that the goal is to become "One Square Enix".
But of course, evident consolidation can only mean one thing in this current gaming climate: Square Enix is preparing itself for a big sale. Or at least, that's what people on forums and social media would have you believe. Rumours of Sony snapping up Square Enix have been doing the rounds for ages now, and they've been fairly relentless. The whispers have started up again following this letter from Matsuda, as consolidation has long been equated to new management, and transforming a business into something that's more attractive to potential buyers.
We'll take more convincing, though. For as long as these rumours have been doing the rounds, there's been no concrete evidence to suggest that Square Enix wants to be bought. And with Microsoft's acquisition of Activison Blizzard still facing opposition from competition watchdogs, we can't imagine that Sony would make a similar move anytime soon.
In any case, it sounds like Square Enix is committed to its new direction. What do you think the future holds for the publisher? Make some predications in the comments section below.
[source hd.square-enix.com]
Comments 61
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I don't play any of their games, but I think it would be a loss opportunity if Sony doesn't buy them.
This is one hell of a stretch.
I for one am looking forward to another whole year of "Sony should buy [publisher]" and Microsoft still trying to convince everyone that it's the underdog while pushing for a $69 billion acquisition.
War never changes.
@PlayStationGamer3919 I don't even think that really matters tbh. Activision is one of the biggest if not the biggest 3rd party publisher and square is a lot smaller especially when you factor in they sold their western developers.
I've been thinking for a while that it would make a ton of sense for Sony to buy Square Enix. They partner together on almost every Final Fantasy(Promotion wise, and recently exclusivity wise) and I'm sure Forspoken won't be the only console exclusive game that Square has in store for Sony.
I actually would like to see this happen for both parties involved. It just makes sense. Also Sony could maybe help them with their AA titles like Diofield and Valkyrie Elysium or others of that same ilk. Games that could make a good series but just need a bit more polish and probably budget.
I generally don't pay much attention to many Square projects but with the FF games seemingly PS console exclusive, I could see it happening.
A lot of game feels the same now. Not talking about SE's games in particular - but the diversity of quality games have diminished over the years, and they all started to feel like sandbox third person action RPGs, or the same recycled FPS.
Would Sony buying out SE continue this trend? My only concern with big companies (whether Sony or MS), is that all games would consolidate into one type of genre, same-looking games in Unreal Engine. Which makes me feel not-excited for any sort of buyout.
I suppose the real innovation comes from the Indie titles. I just hope gamers support the indie realm.
@throwmeaname
What you mentioned is exactly why I've been supporting indies more over the last few years than I ever thought I would. That's where all the fun is right now. Aside from a few gems here and there, 'AAA' games are becoming far too similar to eachother and it's only getting worse as time goes on.
God i hope so. Usually dont care for consolidation but MS is now in the process of making a 2nd publisher games unplayable to the public.
Square haven't got much left as most were sold and If I was Sony I wouldnt buy time due to them ending support for some games and doubling down on Blockchain crap , financially it don't look gd for se ,they seem to b grasping for money
@Rmg0731 yeh unplayable l, only those who own some tv models /pc/phones /tablet/Xbox even quest 2 , wow not many
Sony and square enix are a perfect fit and have a deep history together so it makes perfect sense. Then sony can win back some of the Japanese Market by having games like dragon quest, kingdom hearts, bravely default, final fantasy and the HD2D games as exclusives. Inject some of sonys cash into those titles and have some of Sony's other studio's to help with development and we could get some great games from square enix on a consistent level, something they struggle with a lot lately
This whole buyout of big established brands is becoming rather tiresome. Invest in smaller companies and grow them. This new trend puts gamers at a loss all round.
I'd imagine it's got to get a bit annoying for some of these companies to always be rumored to be preparing to be bought out. The Square Western studio sale was pretty shocking but if a full company sale was coming I feel there would have been some other type of tip by now. A leaked document, a presentation on a laptop on the subway train, something.
Just doesn't seem like there has been enough fire where it looked like there might have been smoke at one time.
I still think the deal might be done but Sony don't want to announce it while there trying to stop Microsoft's ABK deal
Let them get bought out. As long as I can play final fantasy on pc that's all that matters to me
Square is almost a pseudo Sony dev at this point anyway.
Forspoken, FF16, FF7 Part 2 all Sony exclusives for at least a decent amount of time. Those have to be SE biggest games of 2023.
I could be wrong, but it makes a lot of sense that paperwork is being written up/signed for a Sony but when the Activision thing is done. They would shift that money buying exclusivity to gaining profits on the game sales.
Cool.make it happen sony.word up son
Square Enix might as well sell out to Sony as Sony keeps paying them to keep games off other Consoles permanently anyway. By getting rid of some Studio's, IP's etc, they have made themselves 'more affordable' and you'd think it would be easier for Sony to acquire a Japanese company over any company outside of Japan.
Of course, SE probably also don't 'need' to sell as they get Sony's money anyway and by owning the IP's, they get licensing fees for all the merchandising etc too. They have reduced their 'expenditure' by reducing their size, their IP's (which brought in income) and so have reduced their costs and with games releasing, will generate revenue.
I don't think anyone would be Surprised if Sony were to acquire SE - or maybe some part of SE at the very least. It almost seems inevitable that SE will eventually be acquired but maybe a 'strategic' partnership (which they seem to have) suits 'both' better - Sony don't 'need' to buy as they get Exclusivity anyway and SE don't 'need' to sell because they are 'Comfortable' with the situation...
As usual
sound like more ff remakes. 8 pls
You left out the part where Square doubles down on their commitment to predatory block chain based games. Even going as far as to say that some of there announced titles for 2023 are block chain games along with some that have yet to be announced.
https://www.eurogamer.net/square-enix-clearing-house-doubles-down-on-blockchain
It would be a huge mistake to buy Square, but then again, Sony..... Lol
Will probably happen, which is a shame because the only games worth a damn that Square Enix are putting out these days are Switch games. Would be a slap in the face to Nintendo.
I wouldn’t be surprised if it happens but it’s not going to while they’re battling Microsoft over the AB acquisition. Just like Activision, SE do little of interest to me, FF has moved on from what I want and expect from the franchise so I don’t care where their games end up.
@Uncharted2007
This is precisely what makes me think it will not happen. Why spend between 6-7 billion acquiring the entirety of Square-Enix when they can just keep paying a few million for Final Fantasy exclusivity deals and not have to carry the burden of risk should their games flop? Square-Enix is obviously struggling to stay afloat as it is, and Sony appreciates profits above anything else.
Only situation I could see Sony trying to buy Square-Enix is if they ever feel it's likely that either Microsoft or Nintendo are trying to acquire them, and at that point, I doubt Sony would be able to out-bid Microsoft.
Chances are if SE is sold, it wont be to the likes of Sony, but to the likes of Bandai-Namco.
What they are consolidating around is blockchain and NFTs unfortunately.
good for them. Square Enix is best when they stick to their bread and butter = JRPGs. I'm all in for it.
As for Sony acquiring them...well, they certainly would be the best candidate.
@Tharsman I will simply point you in the direction of the Bungie acquisition. A severe waste of money if I've ever seen one.
Its all about NFTs, which is really sad to hear
Square is probably the developer I buy most of my games from. Except for the PS exclusives, most of the games I get are on Switch though. I would rather see them on PS than XB, but I would rather not see them sell to either.
@theGoodChap
This. A thousand times this. A lot of people forget the huge burden you take onto when you entirely acquire a studio/publisher. You are not just getting the goodies, but also all the responsibilities, bills, and risks.
At least someone like Bandai-Namco is much more set up to take some risks in publishing, thanks to a highly diversified portfolio. They can take the chance to take some risks. But Sony? They run a lean ship, and they hate being in a position to produce anything but high profit margin, high budget, games.
@Uncharted2007
I too will point you to Bungie: a studio with a single product, and a highly successful and profitable one at that. Bungie did not have a ton of dead weight, it was as lean an operation as it could be, and thats how Sony likes their operation to run.
Edit:
For the record, I dont care if Sony buys SE. In fact, I always prefer acquisitions over paying to lock games away from other platforms. If you want the game for yourself, take full responsibility for it then, IMO. I just doubt Sony is going to buy SE given how they are obviously in shaky financial grounds.
@Sakisa Agreed. Most of the best games SE have made recently have been built with Switch in mind and it would be a big slap in the face for those players.
@Tharsman You misunderstand. Why spend nearly $4 billion on a company when they're product won't even be exclusive? They over paid and got nothing new in the process. Destiny would have remained on Playstation unless MS bought them. Sony, on the other hand, is keeping Destiny on all platforms.
It makes zero financial sense no matter how good Bungie runs their operations.
@Uncharted2007 Destiny wont be exclusive, but they will be making more games, and I dont expect any of them to be showing up on XBox or Nintendo platforms.
They are also being tasked with helping every other Sony service game be good. What is SE going to bring to Sony? NFTs? the FF IP? Lessons on how to make one good service game and thousand bad ones?
I do personally agree that Bungie was overvalued, but still can see why Sony would rather buy them.
BTW my earlier 6-7 billion price tag on Square-Enix is based on current market cap of 5.5 billion, any acquisition is likely going to be way higher than the market cap if it expects investors to depart with their stock. I think I'm still lowballing it.
Also, I do think it makes sense for some to buy SE, just not Sony, not the way they do business. If they did buy SE, they will slaughter it to pieces and only keep DQ and FF alive. That would be a very sad outcome.
They need new management full stop. The crap they have brought out in the past two years that have bombed tells you this company is not pointing in a direction of quality. They seem like a company that is run by people who are desperate to be seen as forward thinking when they need a “back to the drawing board” review. It’s not a well run company and hasn’t been for a long time.
@Tharsman We'll see on whatever next game Bungie makes but at least we have common ground on Sony spending too much too acquire them.
Aside from Square leadership being completely blinded by the allure of block chain and NFT's, it's hard to want to see anything aside from the few Sony exclusives manifest on the platform.
Square has put a large number of terrible games that completely flopped last year alone. The way they treated the studios actually making hits and guardians of the galaxy was pretty sad as well.
Square needs a massive refresh from the old guard leading them into blockchainlandia. I hope for their sake and there legacy they remember what brought them to prominence. As it certainly wasn't a beholden to shareholders profits above all else regardless of the quality of the project or demand from their loyal Fandom way of operating.
Sony need to buy square enix before Tencent or another Chinese or Saudi company buys them.
@KundaliniRising333 final fantasy by its self is worth billions.
@4kgk2 I dunno about billions, but I agree that it is a highly valuable IP, I just hope they focus on legitimate titles in that franchise or new ips and shake their greed focused mindset toward blockchain/nft greed. That ship has sailed and will continue to decline as public sentiment and scandal continues to rock that massive market built in deception, frad, and greed.
Just like with live service,... Boardrooms see a small few make big money and the boardrooms get blindled by the carrot on the stick by chasing that just like the gold rush, only to find out its already been tapped and cornered.
Square seems dedicated to learning the hard way, as does Sony, that going against demand in favor of profit often ultimately leads to less profits than before the pivot.
If they get purchased I would like for Sony to immediately fired president Yosuke and possibly put a restraining order so he can't enter the building, absolutely terrible what he has in store for the company.
I think possibly becoming a shareholder would be a better fit sort of like what Tencent does to most studios that way they are still invested in keeping exclusive but not a full purchase. I'm Pony at heart but would hate to see Nintendo lose on games that are great for the system.
Sony buy squareenix and release vagrant story with trophies. beg ya
I wouldn't be shocked if Sony them especially as new FF games are pretty much exclusive and you have stuff Forspoken being console exclusive.
Couldn't care less about square enix they don't really make much else outside of jrpgs , they sold off the few franchises I was bothered about & they seem to be big on NFTs , capcom would be a much better purchase imo then again I wouldn't want Sony or Microsoft to change the companies direction as they seem to be very consumer friendly & one of the best Devs/publishers in the business
@throwmeaname
Indies are mostly old school games.
@Would_you_kindly if Sony bought Capcom they probably only keep RE exclusive while everything else would be multiple platform.
@ShogunRok from a brand name and marketshare standpoint xbox is the underdog. Money wise sure they are far and away the richest console due to Microsoft. But as it stands MS is 4th in money made, after ABK they are 3rd. I own and like all 3 consoles and without doubt know that Sony even after the ABK deal closes will outsell Xbox for the foreseeable future, until GP starts to eat marketshare and that might take until PS6 or even PS7. Example my mom bought me PS and Xbox gift cards for Christmas and she asked me if they were the right ones and i said yes, she said well i just wasn’t sure cause it didn’t say Sony on it, i said thats cool you remember sony makes PlayStation, i said do you remember who makes Xbox and she thought and said no.
@Would_you_kindly 100% agree, lately Capcom is for the players. They have money coming in and aren’t in any trouble with staff allegations, so it would be nice to see them stay 3rd party. But if they want the cash and to work closely with one brand, i will support them, cause i like their games.
If so Sony please haggle with Microshaft. Publish FF games on Xbox and in return they can publish Elder Scrolls/Fallout games on PlayStation.
If Sony sincerely wants to buy SE why don't they wait until their focus on NFT's bankrupts them and get them at liquidation price?
"One Square Enix"
Sounds familiar.
Would agree with the overall sentiment from other commenters SquareEnix is a notoriously mismanaged company. I don't have a business admin degree but multiple Square execs have more or less admitted to it in various interviews going all the way back to the Square-Enix merger. They have a few big hitters (praise YoshiP for FFXIV), but they are wildly inconsistent and perhaps the most delay-prone publisher in the history of the video game industry, and I say that with no hyperbole or exaggeration.
Square isn't exactly a trainwreck though. They remain profitable. And every other game they put out is at least "good" or better, even if that is a far, far cry from the glory days of 90s Square where everything they touched was pure gold. Still, based on Sony's previous acquisitions it seems unlikely they buy Square as they seem to stay away from companies not on very solid ground.
Also, Square flirting with NFTs and block chain stuff smells like desperation a bit, and that stuff supposedly isn't a part of Sony business going forward so seems not a great fit overall. Different business ideologies it seems.
I don’t care if they get buyout or the ceo gets replaced. I just want SE to stop putting money and talking about freaking NFTs, block chain and the metaverse.
The problem with these rumours - fun as they are - is that big acquisitions like this are never rumoured. They never leak. There's never insiders speaking off the record and somehow it finds its way onto a forum. Loose lips sink ships and in big business lips are tight. Remember all those rumours about Microsoft buying Bethesda before the news dropped? No, you don't. Any time there's a rumour like this it's more of a wish or a prediction than an actual rumour based on tangible inside information.
The moment the Microsoft deal is cleared which it will be once enough palms are greased Sony will take over Square and I'd bet steak dinners there's another big Japanese pub they'll take also to try and offset the huge share price damage it will cause , thinking likely fromsoft
@Tharsman Square Enix doesn’t just make games… They also publish a lot of extremely popular mangas that turn into animes as well. While Microsoft is buying up the game Industry. Sony is buying up the anime industry. A square enix purchase could be a big benefit to them on that front.
Smart business decision, wish them the best!
As many have said, a Sony buyout of Squeenix just makes no financial sense for Sony. They already get the milk cheap, why buy the grazing lands just to own the cows? And Square's titles, popular as FF is, and Sony already has, really move the opposite direction of the growth markets Sony is aiming for. Square represents a nostalgia to us classic old school PS fans, but our direction is the OPPOSITE direction of where Sony is moving, they're all in on mainstream, not Japanese niche gamers outside securing a market by buying FF and maybe DQ. There's just no business sense in such a deal. There would have been business sense had Square not sold the Western studios that really benefit Sony's direction, but....not the Japan-only Square. That's what WE like, not the growth market PS management favors.
Plus, as fans of such content, Square's one of the only "major" publishers that still delivers weird little niche games like Octopath, Diofield, Star Ocean, etc. If Sony buys them, based on Sony history, all of that dies a hard and fast death, the fat is trimmed, and all investment goes into the top tier blockbusters, and it becomes an FF, DQ, KH factory and mobile factory forever more. Not that it already wasn't, but without those little nuggets of brilliance between. As fans of the niche, a Sony buyout is really the last thing anyone here should want. It's a corporate win at the cost of a loss of content we care about in favor of making a bigger mass-market production factory.
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