Online communities are busy debating the pros and cons of Square Enix's sudden sell-off. The company, which is one of the largest in gaming, is best known for making the Final Fantasy and working closely with Disney on Kingdom Hearts, among others. However, Square Enix has worked on other IPs through its various subsidiaries over the years as well, including Deus Ex and Tomb Raider.
TLDR; Square Enix should be swimming in cash, all things considered. But, it appears that this isn't necessarily the case.
While Square Enix isn't bankrupt by any means, it appears that the company doesn't see the value of its western subsidiaries anymore. In particular, Crystal Dynamics, Eidos Montreal, and Square Enix Montreal. According to an industry analyst, part of the reason for this is that the publisher lost $200 million working on Marvel's Avengers and Marvel's Guardians of the Galaxy.
Marvel - that’s the reason why Square sold its NA team for $300m. Because in a little under two years they lost $200m on two Marvel games. But it still looks like a low price given the optionality on probably 4 AAA titles coming through. #SquareEnix #Embracer
— David Gibson (@gibbogame) May 2, 2022
MST Financial explains in its analysis that Square Enix spent hundreds of millions of dollars to produce and market the aforementioned games. In the past, Square Enix has referred to Marvel's Avengers and Marvel's Guardians of the Galaxy as disappointments. At the time, it was hard to understand why Square Enix would label the latter as such after it found critical acclaim. Now, we understand why.
Hopefully, now that the Embracer Group owns Square Enix's western studios, the publisher can focus on franchises more closely associated with it. Square Enix already got a head start by reviving Valkyrie Profile with Valkyrie Elysium and Chrono Cross: The Radical Dreamers.
This is all on top of Final Fantasy 16, Final Fantasy VII Remake Part 2, and Forspoken as well as Kingdom Hearts 4. Also, don't worry, Square Enix isn't going full-on JRPG. The company will retain the rights to Life is Strange, Just Cause, and Outriders, three IPs that fans would love to see more of in the future.
Speaking of Square Enix, we're curious if all these talks about a Sony buyout are true. The two companies have maintained a strong working relationship over the years. However, if Square Enix is investing in NFTs following the recent firesale, it's hard not to worry that Sony might be in on such a divisive move as well.