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The latest of a series of deals in the video games industry, the
sale announced on Monday includes studios Crystal Dynamics,
Eidos-Montreal and Square Enix Montreal, affects 1,100 employees
and is expected to close in the July-September quarter.
Square Enix, whose major franchises include "Final Fantasy" and
"Dragon Quest", said the proceeds will be used to invest in
areas such as blockchain, artificial intelligence and the cloud.
The Tokyo-based company last year said it was reviewing its
portfolio to adapt to industry trends such as the focus on the
metaverse, or the idea consumers will spend more time in virtual
worlds.
Embracer, which has a reputation for acquisitions and a war
chest of 10 billion Swedish krona ($1.02 billion), said the deal
will give it a pipeline of more than 230 games including 30 big
budget AAA titles.
"Embracer is the best kept secret in gaming: a massive,
decentralised collection of entrepreneurs whom we are thrilled
to become a part of today," Square Enix America and Europe CEO
Phil Rogers said in a statement.
The valuation of the assets, including the long-running "Tomb
Raider" series that has sold 88 million units and generated a
Hollywood franchise with its depiction of archeologist Lara
Croft, surprised some industry observers.
The price reflects "limited competition for acquisition of the
assets, perhaps suggesting some post-pandemic softness in
valuations for particular segments," Piers Harding-Rolls, head
of games research at Ampere Analysis, said.
"Interest will be curtailed by the lack of live service
expertise," Harding-Rolls added, referring to games that offer
continuous, updated play.
Titles such as "Tomb Raider" are primarily single player and top
games in recent years can require investment comparable to big
budget movie productions.
"In different timing and circumstances that could have been a
different number but now we are where we are and I'm standing
here, so I'm super pleased with that," Embracer co-founder and
CEO Lars Wingefors told a briefing.
Sony Group Corp, already a leader in first-player gaming, said
in February it will buy "Destiny" developer Bungie and plans to
launch at least 10 live service titles.
"Embracer believes there will be an increasingly strong demand
for high-quality content, including AAA single-player games,
over the decade," the company said in a statement.
($1 = 9.8474 Swedish crowns)
(Reporting by Sam Nussey; Editing by Emelia Sithole-Matarise and
Barbara Lewis)
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