Square Enix sold Western studios over fears Japanese game sales could be ‘cannibalized’

In its latest quarterly earnings call, Square-Enix explained his reasoning behind the sale of his western studios.

In May, Square Enix announced that it was selling Crystal Dynamics and Eidos Montreal, the studios behind Tomb Raider and Deus Ex respectively. Now, as Polygon reports, Square Enix explained in its financial results that this is because games from its Western studios may have cannibalized sales of its other games, according to the analyst. David Gibson.

Gibson noted that selling the studios and their IP addresses would have the potential to “improve capital efficiency,” i.e., making more money relative to what it spends, so to continue making more money. And according to Gibson, the decision to sell these studios to group of kissers is part of its first phase, the second being the “diversification of studio capital structure”.

Essentially, games are getting more and more expensive to make, and with Square Enix having full ownership of many titles, it has to be picky about where it puts its resources. In the long run, Square Enix seems to be looking to sell stakes in its company to make things a little easier.

There have been many rumors that sony might acquire Square Enix, but what makes more sense is a similar approach to Sony’s approach with Bungie, where it acquired developer Destiny, but isn’t looking to pull games from other platforms. As Square Enix produces a number of titles which are released exclusively on the nintendo switchand would probably have more trouble PlayStation Where Xbox.

Square Enix moving away from Western studios isn’t too surprising, especially since it resented both Marvel’s Guardians of the Galaxy and Marvel’s Avengers was not as successful as he would have liked, although the latter was clearly plagued by many problems.