Square Enix Explains Why It's Selling Guardians of the Galaxy and Marvel's Avengers Developers

By Rollin Bishop

In case you somehow missed it, Square Enix and Embracer Group announced today that the two have entered into an agreement for Embracer Group to acquire Crystal Dynamics, Eidos-Montreal, Square Enix Montreal, and a bunch of intellectual property like Tomb Raider and Deus Ex. The deal for $300 million is expected to close somewhere between July and September 2022. Square Enix, for its part, has explained the purpose of the sale to Embracer Group as being down to a number of factors, but that it notably helps the company with "the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud."

"The Transaction will assist the Company in adapting to the changes underway in the global business environment by establishing a more efficient allocation of resources, which will enhance corporate value by accelerating growth in the Company's core businesses in the digital entertainment domain," the note to investors from Square Enix about the sale reads in part. "In addition, the Transaction enables the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud."

"The Transaction will also provide an opportunity to better align our overseas publishing function with our organization in Tokyo," Square Enix's rationale continues, "revisit the current governance structure and associated reporting lines, and advance integrated group management with the goal of maximizing the worldwide revenue generated from future titles launched by the group's studios in Japan and abroad."

Embracer Group, for its part, has a relatively simple explanation for why it's agreed to purchase the studios and IP from Square Enix: they have a history of delivering blockbusters, and while the IP may not have performed up to Square Enix's expectations, Embracer Group has high hopes. "The acquisition builds on Embracer's mission of creating a leading independent global gaming and entertainment ecosystem," the company stated. "Embracer has been particularly impressed by the studios' rich portfolio of original IP, housing brands with proven global potential such as Tomb Raider and Deus Ex, as well as demonstrating the ability to create AAA games with large and growing fan bases. There are compelling opportunities to organically grow the studios to maximize their commercial opportunities."

As noted above, Square Enix and Embracer Group have entered into an agreement for the latter to acquire Crystal Dynamics, Eidos-Montreal, and Square Enix Montreal alongside IP like Tomb Raider, Deus Ex, Thief, and Legacy of Kain as well as a number of back-catalog titles for $300 million. It is still subject to regulatory approval and the like, but is expected to close later this year. You can check out all of our previous coverage of Square Enix in general right here.

What do you think about Square Enix's reasoning here? Are you curious what Embracer Group will do with all of its new acquisitions? Let us know in the comments, or feel free to reach out and hit me up directly over on Twitter at @rollinbishop in order to talk about all things gaming!

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