Embracer Group Acquires IP And Studios From Square Enix For $300M

The Swedish gaming giant Embracer Group is shaking up the landscape of the gaming industry. On May 2nd, it was announced that Embracer Group would acquire Crystal Dynamics, Eidos-Montreal, Square Enix Montreal, and a catalog of IPs from Square Enix for $300 million. Some of the IPs expected to be involved in this deal include the Tomb Raider series, Deus Ex, Thief, Legacy of Kain, and “more than 50 back-catalog games from Square Enix Holdings.” If this deal is approved, it is expected to be finalized during the second quarter of Embracer’s 2022-23 financial year.

Beyond studios and IP, this acquisition is also expected to include roughly 1,100 employees around the globe. Once this deal is approved, Embracer will have over 14,000 employees spread across 124 internal game studios around the globe. According to IGN, Embracer will have 10,000 game developers working on over 230 games. On top of that, over thirty of these games are expected to be AAA titles.

“We are thrilled to welcome these studios into the Embracer Group,” said Lars Wingefors, the co-founder of Embracer Group. “We recognize the fantastic IP, world-class creative talent, and track record of excellence that have been demonstrated time and again over the past decades. It has been a great pleasure meeting the leadership teams and discussing future plans for how they can realize their ambitions and become a great part of Embracer.”

This couldn’t have come at a better time for Square Enix. According to senior MST Financial analyst David Gibson, the company lost $200 million on two highly-anticipated games: Marvel’s Guardians of the Galaxy and Marvel’s Avengers.

The Profit‘s Take:

So, Square Enix is saying it’s selling these assets to invest more in blockchain games. But, it also sounds like they’re trying to recoup some of the losses they suffered from their failed Marvel games. It’s possible the IP they have isn’t as good as we expected. IP clearly does have a shelf life, but there are some exceptions (like Star Wars). Tomb Raider is not what it was ten years ago. It’s not a game people are clamoring to play when it comes out. Almost all of these games are bad. The Avengers game is pretty awful. The genre isn’t that hot anymore. Plus, the appeal of Lara Croft has obviously gone down. What 12-year-old knows Lara Croft? It’s an IP that hasn’t aged well. On top of that, Marvel has bombarded the market with so many different forms of entertainment that a new game just doesn’t hit as hard as it used to. Maybe they thought they were peaking, so they saw this as the right time to sell. Even with good IP, you can still make a bad game.

(All information was provided by Google, IGN, Metro, and MSN)