It’s been (another) big week for gaming news. On an unassuming Monday morning, the industry learned that Square Enix had agreed to sell Tomb Raider, Deus Ex, Lara Craft Go, and the studio that makes the games to the Embracer Group.
While Square Enix will keep some of its Western IP — namely Just Cause, Life Is Strange, and Outriders — it’s clear that the publisher is eager to get rid of many of its most famous brands. It makes sense; Square Enix has been publicly disparaging its Western studios in recent years. It almost feels like a disappointed parent complaining to other parents about their child at the school gate.
Whether it’s “Tomb Raider,” “Deus Ex,” “Marvel’s Avengers,” or “Guardians of the Galaxy,” Square Enix will release releases (loudly), calling them “disappointing sales.” , or talk about how unhappy it is with the field service side of the game. Even back in 2013, the Tomb Raider reboot sold 3.4 million copies in just 4 weeks — still a flop in Square Enix’s view. oops.
However, after Embracer Group agreed to acquire three major studios (Eidos Montreal, Square Enix Montreal and Crystal Dynamics) and a slew of IP from Square Enix, the investment firm shared a timeline for the Tomb Raider franchise. Complete some sales information presented in this way that we haven’t seen before.
According to the timeline, Tomb Raider has sold 88 million copies since the first game launched in 1996. A good chunk of that — some 38 million copies sold — is due solely to Shadow of the Tomb Raider (2013) and continued production of Rise of the Tomb Raider and Shadow of the Tomb Raider.
TL;DR? This is a popular series with a lot of potential. So why is Square Enix so eager to sell it for such a cheap price? Let iGamesNews’s friend and gaming business veteran Chris Dring put it in layman’s terms.
In football, financially troubled clubs often sell their best players for cheaper if they can pay up front. It could take an expensive player off the payroll and give them an inst ant cash injection.I hope this helps explain Square’s Western studio prices
— Christopher Dring (@Chris_Dring) May 3, 2022
It seems that Square Enix is eager to get rid of an expensive studio — and get a sizable, lucrative infusion of cash at the same time. It’s been obvious for a while now that the Japanese publisher has been a little overwhelmed with what to do with these studios, so having Embracer paying a sizable chunk of money to acquire them would be a win for all parties, right? ?
Stephen Totilo of Axios is also involved. Notably, in 2021, Embracer is paying Square Enix more than twice as much for its 50-plus IPs and three studios than it pays a mobile gaming company called Easybrain.
Last year, Embracer paid more than double the price for a mobile gaming company called Easybrain https://t.co/uoCSMDfppq
— Stephen Totilo (@stephentotilo) May 2, 2022
Given that Square Enix noted that its studios generated about $200 million in revenue last year (but less than $8 million in operating income), it’s easy to see why the publisher would want to sell those studios to Embracer – the company There’s clearly enough cash roaming around to invest in these companies in a way that Square Enix seems to be silent on.
Long and short? Square Enix struck a deal with Embracer for $300 million — a paltry mega-ton deal compared to Sony’s $3.6 billion acquisition of Bungie. Especially when you consider that Embracer has also acquired the rights to the Tomb Raider movies (three already exist, we’ll see about a fourth), Lara Croft’s status as a cultural icon, and the Deus Ex movies potential.
Actually, that’s a lot of cash, but as Square Enix seeks a quick cash infusion, Embracer does find a gold mine here. If all goes according to the company’s plan, maybe we’ll even see some other legacy game franchises come to modern consoles as well.
