So should Sony buy the STALKER2 devs, to prevent further moneyhatting from MS? What about indies like Twelve Minutes, The Ascent etc. all of them in the same moneyhat category?
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Embracer Group enters into an agreement to acquire Eidos, Crystal Dynamics, and Square Enix Montréal amongst other assets
- Thread starter DForce
- Start date
So should Sony buy the STALKER2 devs, to prevent further moneyhatting from MS? What about indies like Twelve Minutes, The Ascent etc. all of them in the same moneyhat category?
OmegaSupreme
advanced basic bitch
BbMajor7th
Member
Embracer gonna embrace, I guess. If they dust off the Legacy of Kain IP and do something meaningful with it I won't be angry, but all this M&A bullshit is not good for creative industries.
Baki
Member
Except that the financials they shared showed that Eidos and CD were profitable.
John Wick
Member
It only a problem when Sony moneyhats not when MS do it then they are all for it.
Fess
Member
This time I don’t see any downsides, quite the opposite. With Embracer the games will be multiplats and if Sony would buy Square Enix now it’s not a big deal for gamers without a Playstation since the big games are exclusive to Playstation already. I hope they buy more studios, the industry needs a big neutral side.
Futaleufu
Member
MS doesnt keep games out of PC
Kerotan
Member
Xbox is the smallest out of PlayStation Nintendo and pc. So it's not good for a series to go in Xbox console exclusive. Nintendo or Sony and PC option much better. It's a good series that deserves to stay relevant.The Revenue activision will pull from a single year of Warzone will likely dwarf revenues CD et al will make from tomb Raider and Deus Ex combined all gen.
I’d have thought their recent partnership with Crystal Dynamics for Perfect Dark would have met the ‘organic’ threshold?
BbMajor7th
Member
It's less about platforms and more about creativity. Publishers will inevitably steer their studios in certain directions and create a general homogeny in output. There's admittedly less of a trend of it with Embracer, but you can see it born out in their business models, which has focused a lot on rinsing and remastering existing IPs rather than pushing for sequels or new IPs.
Wildebeest
Member
So does it mean Square are less stupid if they had offloaded them after they lost them, say, half a billion dollars?
Fess
Member
I haven’t noticed that but I can imagine that Embracer are very hands off and sometimes devs need someone to say ”-Nope this isn’t good enough, do better, you’re not ready for launch yet.”. Biomutant had so much potential, I really enjoyed a lot of it but it could’ve been at least another 6 months in the oven.
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TheThreadsThatBindUs
Member
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Ezekiel_
Banned
200 million debt transfer too
https://metro.co.uk/2022/05/03/squa...el-games-avengers-will-continue-16575946/amp/
https://metro.co.uk/2022/05/03/squa...el-games-avengers-will-continue-16575946/amp/
Baki
Member
That's a fantasy scenario. Embracer also expects both units to be profitable within 2 years. That said, having 2 units that are barely profitable means that both studios likely needed some turn-around management. Looks like Square Enix didn't see the value in doing that. It's a shame as Tomb Raider and the other IPs were valuable and certainly worth more than the $300M Square Enix will be getting for selling them. Unfortunately, when you want to sell, your leverage is low, and so they sold at whatever cost.
Metro is a tabloid, not sure how reliable their reporting is here. It's also based on a tweet.
There's been some speculation that there might be some debt involved in this deal. We will have to wait and see if there's more to this deal. Any debt transfer would start to make the finances on this deal make more sense.
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Cash and debt free
Wildebeest
Member
So you agree that it is smarter for them to sell now than to just leave those studios as they are if they expect them to start bleeding money? Including some IP that they don't want anyway, because they know they can do nothing with them for cultural reasons.
CamHostage
Member
I wouldn't say that's their business model, actually?
Embracer Group seems to be interested in exploring the viability of formerly successful franchises for future endeavors. (The company was formed primarily from seeds of THQ Nordic, with other entities like Koch Media, Saber, and more recently Gearbox, Dark Horse Comics, and Asmodee in the conglomeration, so we'll use THQ as the company model.) They build new teams, have them work on existing brands, and see if there's still blood in that stone. So yes, Darksiders got 2 remasterings, but then we got Darksiders III and Darksiders Genesis. They remastered a SpongeBob game, then had that team make SpongeBob Cosmic Shape. Jagged Alliance, they license-rescued and have a team working on JA3. Destroy All Humans, they're still remastering 2 after a successful (and rather expansive first game, which also got a Switch port,) then we'll see if it has a future; same possibly for Kingdoms of Amalur or Titan Quest. They license-rescued Comanche and Knights of Honor and Monster Jam and Desperados and all this B-tier stuff that otherwise would have probably not been made if it weren't for an exploitation-hungry publisher seeing nostalgic brands as a good meal to enjoy.
If that's the model they use for Crystal Dynamics and Eidos, that'd be a lot brighter future than any of these old brands could wish for at Square Enix. At best, some of Eidos' games had a chance under the Square Enix Collective line (which tried to resurrect Fear Effect and Gex and Anachronox through indies,) or maybe as mobile games, but there wasn't much hope to be found there either.
True, it may well be that Embracer's plan is to just stamp out these games until they have no more ink left in them (there's a reason the original THQ crashed and burned, and why gamers at the time celebrated its demise,) but so far, I would say Embracer has shown more care for its brand name than would be expected of a big media katamari company.
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Baki
Member
Smarter? No. Easier? Yes.
IPs and good talent is in short supply in the gaming industry. If I was the CEO of Square Enix, I would be looking at ways to retain, improve and expand assets. Square Enix is a cash-rich company ($1.3B in cash) with healthy profits. A more aggressive and forward looking management team would be looking to make moves.
Wildebeest
Member
There is too much IP in the gaming industry, if anything. It saves lawyers some time making sure the names are registered or whatever, but really it isn't some magic bullet. You do need the continuity of talent who can keep the players feeling that they are immersed in some sort of thematically consistent world building experience.
The question I ask is not "could they have done the most absolutely perfect thing imaginable and saved everything". That to me is some fantasy scenario. I ask is it dumb for them to defend their core "gaming universes" than to re-re-re-boot some other gaming universes at great expense, when they have no passion for them. Sure, they would be really smart if they invested their money perfectly and in five years time sold 20 million copies of the next Deus Ex game. A total non fantasy scenario. But not doing the absolute smartest thing imaginable does not mean it is not smarter to sell the companies off than to just sit back and panic as they fail and bleed money.
EDMIX
Writes a lot, says very little
Probably with a fraction of the budget too.
Baki
Member
They were not bleeding money on those studios. They were profitable studios that had brought in $190M revenue in 2021 and had shown consistent revenue growth across 3 years. Tomb Raider as an IP had sold 88M copies and 38M copies just across the trilogy. Tomb Raider is also a very successful movie IP. This kind of cost cutting reeks of a lack of imagination on the part of the management. There's a reason why Square Enix has the lowest P/E and P/S ratio in the industry. It's because investors have little faith in their growth prospects and therefore little faith in the management to grow the company.
yurinka
Member
It would be interesting to do this but with the profits and adding Bungie (I have no idea if there are numbers available to do it).
MS guys are so lucky: every year Phil says that this year have the best lineup ever. xD
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Wildebeest
Member
Talking about the past successes just shows they have either been lucky or correct in the past, which doesn't invalidate their decisions or predictions about the future. It is neither here not there if investors think they can make money by speculating on their stock. It has already been established that they are cash rich, so don't need investment for growth or maintaining their business.
yurinka
Member
Destiny has the worldwide record of best selling new IP, redefined FPS and MP in console with Halo and Destiny. Set a new standard with GaaS on console. They are very profitable, can teach GaaS the other Sony teams and will release a new IP or two in the next couple of years or so.
Not counting the Destiny series, this generation Sony achieved or will achieve over 20M units sold with over half a dozen games with single console games. SIE generates more revenue than any console maker ever did and grows every year, like its profits.
Square sold these studios because weren't profitable. The dumbest fuck here isn't Jim.
Kokoloko85
Member
In the right hands, 300m for those games is a bargain.
Destiny isnt a playstation ip after the purchase. 3billion is alot of money compared to other studios let alone publishers
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TheThreadsThatBindUs
Member
Deus Ex is cool and all, but is everyone forgetting another fucking awesome legacy IP?....
Legacy of Kain!!!!!!!!
Gambit2483
Member
Pretty sure it was mentioned 6 or 7 times...
kikii
Gold Member
Kiddo Cabbusses
Member
Ugh, I hope this isn't it. The last thing we need is studios actively generating an "acquisition bubble" that would send shockwaves of damage to the gaming industry once it bursts.
onnextflix5
Member
Square were desparate, and the big boys were not interested for whatever reason. So makes sense.
Yeh it would have been perfect for ms, but they are tied up with acti deal. And sony might be tied up with a unannounced deal, or most likely they are not interested at the moment. Embarcer group will resell in a few years, when they realise AAA gaming is very hard to make money from.
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StreetsofBeige
Gold Member
That's not how things are valued because it's not like any purchase immediately goes to $0.
Regardless, even if you wanted to do that math to show a ratio to pay off debts, it's not a good measure.
That's like saying a doctor making $300,000/yr can pay off a $600,000 house in two years. The $400M or $70B isn't even a debt.
ShaikhCroft
Member
Squeenix handled Crystal Dynamics poorly. It had so much potential. With better investments we could have gotten much greater titles from them, same goes to Eidos Montreal.
Hope my beloved Tomb Raider will get much more love from Embracer, if they embrace their new biggest IP.
I expected CD would have joined Microsoft but this is still better than Sony acquiring them.
Hoping to see a great Tomb Raider with Unreal Engine 5 and a remake of the original Deus Ex.
Hope my beloved Tomb Raider will get much more love from Embracer, if they embrace their new biggest IP.
I expected CD would have joined Microsoft but this is still better than Sony acquiring them.
Hoping to see a great Tomb Raider with Unreal Engine 5 and a remake of the original Deus Ex.
BbMajor7th
Member
All perfectly reasonable points - I'm not arguing that there aren't good things to come out of M&A, but the more studios fall under the same corporate umbrella (be Microsoft, Sony or Embracer) the more homogenous things become, with more original and wild card projects struggling to see the light of day, because corporates have to focus on ROI and that makes risks harder to justify. It's not uniform: you still get projects like Dreams and Everwild, but they're far fewer and further between.
Moreover, this standardisation has a knock on effect with audience expectations: in an industry where weird and wonderful stuff hits the charts all the time, audiences are more open to the weird and the wonderful, but in a safer more standardised industry, people have set expectations of what a 'good' game will be and it makes it much harder for unique projects to push through those pre-conceptions and get fair considerations by wider audiences. It means that actively bad games that fit with expectations are more likely to succeed than genuinely good games that completely up-end expectations.
The same thing has happened in film and other mediums too, where people will more readily watch a genuinely terrible film or TV series that has actors and concepts they recognise than a genuinely good film that features things they don't. It puts pressure on creatives to adhere to the same standards for the sake of success rather than really following their own creative instincts - I think this is bad.
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Wildebeest
Member
Yeah, what the retail game industry historically relies upon is an old woman with no interest in gaming knowing they can buy an annual game from a certain franchise for their grandkid as a present, and it will make them happy. This is not the world of online gift certificates for stores, in game currency or subscription services.
yurinka
Member
As of now yes.
But when asked if the "over 50 catalog games" acquired included Guardians and Avengers in their public conference call/stream to announce the acquisition, the Embracer CEO said that one of the type of approvals they have to get before closing the acquisition is to get approval from certain external partners and licensors to know if they can also get certain titles so for now they can't talk about other games than the ones from the main 3 or 4 IPs they mentioned now and that in the future they will provide more info about the games included in the transaction.
Which basically means that they are still working to get some games being some of them Avengers and Guardians, which as of now are still kept at SE's side. So maybe they closed the acquisition of the 3 studios and some IPs owned by Square but they may extend the acquisition with more games that used external licenses like these two.
TheInfamousKira
Reseterror Resettler
If this is all a 4D chess scheme to make it more viable to sell me Buster Swords with my gamer tag on them for twice of the price of the game it appears in, I will personally write very mean letters to everyone on the development team of the next Tomb Raider.
CamHostage
Member
Ah, agree, to a point... the major-market business will become as homogenous as 1998-2010 ever was, basically.
The major-major-market companies, the Activisions and Squares, they need whale-attracting titles to make billions of dollars (thus, Square Enix selling off brands and studios who "only" make hundreds of millions of dollars, and cost a lot to make that money.) So they have slimmed down to very little but the massive, massive franchises (Activision was down to only one active brand when it sold; EA has explored "indie" ventures a bit but outside of its yearly sports it produces only a fraction of the titles it used to.)
The publishers in between (well, I would kind of count them as outside-the-between, but they're kind of top-and-bottom, since I'm talking about both the major-major-major market platform holders like Sony and MS as well as the major market/seeking-major-major companies like THQ/Embracer or even Tencent who produce volumes B-grade titles and gobble up other studios to own a portion of the market,) they want billions too of course, but they're seeking this more diverse portfolio to add an active user base, for different reasons. They are having a hard time achieving get-big-quick through new properties, as you mention, but they do have a large back-catalog of brands to exploit (through either existing for a long time or through acquiring companies who used to exist for a long time.) Luckily for them, the nostalgia market is hungry for its youth, so they can remaster or reintroduce brands from the back-catalog to these oldsters as well as a whole new generation. So these companies are bringing back brands that were shelved for failures, because now the people who were tired of those games are remembering the good times and wanting to go back there.
As an example, Square Enix Europe (aka Eidos) essentially only ever produce tiles for 3 brands out of the Eidos library (Tomb Raider, Deus Ex, and Thief) in the 13 years of ownership (give or take some mobile or whatnot games.) That was how they did business. Now, Embracer seems excited for all 50 and specifically named Legacy of Kain in its press release. Not all of those brands will be valuable to even Embracer, but in the way they do business, those brands have potential for exploitation. There was never going to be another entry in a lot of these series under Square Enix (including possibly Deus Ex and Thief, as those brands were questionmarks for the publisher after their past releases,) but now Embracer is going, "Sweet, we own Fighting Force and Herdy Gerdy! Imagine the possibilities..."
Problem is, of course, if the market keeps painting over the past generation to sell it to the new generation, eventually the rust underneath the paint will erode and weaken it, and if there are no new things being created, the new generation won't have its own nostalgia to sell back to them and make the generation after this generation. How can the cycle continue if it cannot gain new momentum...
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CamHostage
Member
It's potentially bad. (Well, I agree with you, it's probably mostly bad.) What TV and film don't have though is an independent distribution model. If the market is controlled by theater companies and streamers, you can't make what doesn't benefit these companies. If you are making products that Netflix or Amazon or AMC or Cinemark are not interested in, then you have no means of getting your product to the people; if you have an idea but your business relationship is with Disney and they say, "This is good, but how can we recontextualize this idea to become a Star Wars project?", then your idea cannot make it to air without conforming to a brand's filter.
That's not quite the case with games. (Same as it's not quite the case with video/films going to Youtube, although in both cases, it's not exactly total freedom.) You can produce titles independently and sell them on Steam, on iOS or Android, or even any of the major platform holders. You can get your product to the people, without a major consolidated conglomeration forcing you into a box. Two problems with that, though. One is, you need a shitload of capital to compete if your idea is big (even a little squirtload of capital can be hard to wrangle if your only job is making your next product and you're staking your livelihood on it.) Two is, there are still gates which may close on you in these "open" markets, including assumptions of pricing (try making a high-quality mobile game and trying to sell it for the same fair price as it'd get if the same game were released on console...) and content concerns for agegroups or territories. Even indies have to draw within certain lines.
adamsapple
Or is it just one of Phil's balls in my throat?
Fuckin Square.
John Wick
Member
Nor does Sony and your point being?
John Wick
Member
I agree Sony at that price should have bought those IP and studios. They could have easily got them in order. A missed opportunity.
Destiny doesn't need to be. The more platforms it's on the more revenue Sony can make from it. Bungje has been bought in for their experience with FPS games and gaas. They will help all Sony studios.
nominedomine
Banned
"We made $300m. We are really good at this."
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Bernd Lauert
Banned
Could be normal early volatility. First Bitcoin crash was 94% down back in 2011. And then it had similar crashes every 2 years or so. NFTs will be the same.
Ass of Can Whooping
Gold Member
It's dead, jim
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Ass of Can Whooping
Gold Member
Unfortunately for you the greater fool theory doesn't seem to be working for NFTs
All that's left are the bagholders. You're better off finding another ponzi scheme to make money on
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