Square Enix could be selling stakes in even more studios

Following its latest earnings call, Square Enix is ​​reportedly looking to sell stakes in some of its development studios in an effort to devote more resources to select titles.

According to games industry analyst David Gibson, the publisher will review your portfolio to see which studios will want to retain full ownership or offer stakes to other interested companies. As Gibson explained, Square Enix sees this strategy as a way to dedicate “resources primarily to Japan titles” and could see interest from Sony, Tencent, and Nexon.

Some of the studios Square Enix currently has under its belt include the four creative business units responsible for Final Fantasy, Kingdom Hearts, and smaller titles, Luminous Productions, which is currently developing Forspoken, and Tokyo RPG Factory. As Gibson noted, Square Enix’s strategy is unusual in that it has no debt and has more than enough operating cash to finance the development of the game.

“Post the [Crystal Dynamics / Eidos Montreal] sale, the company will have [$1.4 billion] cash and no debt,” Gibson explained. “Which is enough to finance investment in expanded games and not to sell stakes in their studios.”

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The earnings call also addressed the recent sale of Square Enix’s western studios, Eidos Montreal and Crystal Dynamics, to Embracer Group. According to Gibson, these studies “cannibalized” the sales of the rest of the group in general.

That sale was “Phase 1” of Square Enix’s plan, while Phase 2 will include the portfolio overhaul. The publisher has also confirmed plans to invest in blockchain and NFT technologies, ideas that are at odds with the themes of one of its best-selling games, Final Fantasy VII.

Square Enix has plenty of games lined up for the future, which could make their proposition attractive to potential investors. A Tactics Ogre overhaul is on the way, Forspoken is due out next year, and Harvestella looks delicious. Beyond those games, the company’s heavyweight Final Fantasy franchise will see the release of Final Fantasy XVI in summer 2023 and Final Fantasy Rebirth in winter 2023.

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