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Jeff Grub: Sony acquiring Square Enix was the big rumor about the next potential Sony acquisition

ManaByte

ManaByte

Member
MasterCornholio said:
I’m just not seeing this being about Babylons Fall to be honest.
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Over My Head Reaction GIF by MOODMAN
 
Baki

Baki

Member
Square Enix did $3B in revenue and $428M in profit last year. Their P/E ratio is about 10.38 and their P/S ratio is about 1.7. A deal with a 20% premium would still be a steal from a pure finance perspective.
 
Captain Toad

Captain Toad

Banned
Mech_Warrior said:
Embracer Group would not have bought SE West if western games were not profitable.

I would argue that SE East will now spam FF titles and devalue the brand.
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We used to get three mainline numbered Final Fantasy games. NES 1-3, SNES 4-6, PS1 7-9, PS2 10-12.

It's gone downhill in quality since they started having one or two per generation.

They need to simplify what a Final Fantasy game is again. I feel like they're trying too hard now. Just make really solid fantasy JRPGs.
 
F

FStubbs

Member
CosmicComet said:
This is definitely not happening.

And I don't think it should. I don't think the current Cali Sony mixes well with SE's philosophsies in general.

I'd be more ok Nintendo or even MS buying SE than Sony right now.
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I think Nintendo wouldn't mind buying the Dragon Quest IP from Square Enix, but that would be about it.

Maybe the Bravely/Octopath IP.
 
KellyM

KellyM

Member
Tiago Rodrigues said:
I mean... final fantasy vii remake is still exclusive, ffxvi will be exclusive (supposedly timed), Forspoken will be exclusive.

The only thing this acquisition would change is the word "timed" at this point.

It does make sense though. Sony has a lot of the same businesses Square Enix has, including manga so...
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Some where I heard that Square was going to put Forspoken also on Xbox. Not sure if Forspokern would be a timed exclusive or it was some deal with Game Pass.
 
adamsapple

adamsapple

Or is it just one of Phil's balls in my throat?
CosmicComet

CosmicComet

Member
MasterCornholio said:
Microsoft is more American than Sony is. There would be wider cultural gap with them than Sony.
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Microsoft is very hands off right now and they own a very Japanese studio (Tango Gameworks) that released a very Japanese game (Ghostwire: Tokyo) just recently.

I really think MS would leave SE alone in their design decisions. Whereas I'm sure Hermen Hulst would inject himself heavily into SE. How I wish Shuhei was still over Sony 1st Party. Hermen sucks.
 
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CS Lurker

CS Lurker

Member
It's always like this. There's a major acquisition that nobody talked about before, and just after that these clowns start to """""""leak"""""" about a new acquisition that never happens to be true. They simply have no shame at all.
 
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James Sawyer Ford

James Sawyer Ford

Member
Pagusas said:
curious if Square sold off those other companies for cheap to make themselves more attractive (less head count/debt/offices).

I kinda like the idea of Square under Sony's umbrella, maybe they'd get the team resources and marking knowledge they so desperately need. Along with a giant NO when thinking about talking about any game more than 4 years out from release.
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This does seem like it’s the case. Shedding assets to make room for an acquisition.

If so, the deal is likely already done and the shedding of assets was a formality of the deal.

Though, I’m not sure why Sony wouldn’t pay 300M for those studios as well. The only thing I can think of is that adding payroll of 1,100 employees wasn’t their primary motive in the deal and those studios don’t fill a niche they don’t already have, I guess
 
Perrott

Perrott

Gold Member
Makes sense.

Square Enix market valuation has dropped from 7.4B in September of last year down to 5.6B in February and 4.8B just yesterday. With them getting rid of their NA studios, their overall worth will most likely continue to get lower and lower, and with arguably most of the fat out of the equation, Square Enix is now left (at least in the AAA scene) with the stuff that we've seen Sony invest so heavily over these last couple of years, especially in terms of console exclusivity: Final Fantasy (XIV, XVI, VIIR...), Kingdom Hearts and Forspoken, as well as beloved franchises such as Dragon Quest, NieR/Drakengard, and a legacy catalogue of iconic names such as Parasite Eve, Chrono or Xenogears. All of these are really hot platform-defining IPs that would massively drive interest from those fanbases towards the future of the PlayStation ecosystem, if they weren't a part of it already.

So back to the point about SE's market valuation, if Sony were to purchase them now and pay shareholders a 40% premium for each of their shares, then we'd be looking at a price tag of just a little over 7B for the acquisition - one with 1100~ less employees than last week, which may be of interest when it comes to lowering the operating cost of the subsidiary - something that would be a good and cost effective use of part of SIE's M&A budget. In reality, the price would probably be even lower than that, as I don't see SE breaking the downwards tendency of their stock anytime soon, especially with their CEO being an absolute moron and Final Fantasy XVI slipping into 2023.
 
Pagusas

Pagusas

Elden Member
James Sawyer Ford said:
This does seem like it’s the case. Shedding assets to make room for an acquisition.

If so, the deal is likely already done and the shedding of assets was a formality of the deal.

Though, I’m not sure why Sony wouldn’t pay 300M for those studios as well. The only thing I can think of is that adding payroll of 1,100 employees wasn’t their primary motive in the deal and those studios don’t fill a niche they don’t already have, I guess
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Those other studios could have had multiplatform deals in place that made Sony uncomfortable. I think it’s no coincidence Square was so willingly to just let the Avengers/MCU deal go.
 
Foilz

Foilz

Banned
Being SE sold off tomb raider and those other ips whata worthy at the studio now besides FF and kingdom hearts
 
remember_spinal

remember_spinal

Banned
CosmicComet said:
This is definitely not happening.

And I don't think it should. I don't think the current Cali Sony mixes well with SE's philosophsies in general.

I'd be more ok with Nintendo or even MS buying SE than Sony right now.
Click to expand...

How would they not mix when sony already bought exclusivity for most of their big games?

Nintendo games can’t even run most of Square Library and MS buying a japanese company is not happening for so many reasons
 
remember_spinal

remember_spinal

Banned
Foilz said:
Being SE sold off tomb raider and those other ips whata worthy at the studio now besides FF and kingdom hearts
Click to expand...

All those IP and those studios don’t even make nearly as much money as FFXIV alone. It’s a much better deal without the middling western division attached.

People are just so enamored with the idea of Tomb Raider being this big legacy IP but it isn’t that relevant in 2022.
 
SteelCurtain 59

SteelCurtain 59

Member
If true this would be the ideal "big" acquisition that Sony could make as far as I'm concerned, it would benefit the games and studios they make so Sony and Square Enix fans would be happy, and basically nothing I remotely care about would become exclusive to Playstation
 
Ezquimacore

Ezquimacore

Banned
Right now square enix is dead or alive, their best games are the 2.5 D ones. Even Koie Tecmo is getting better results than them... So I don't know man. Now without the western ips their only thing of value is FF and even that is not as hype anymore, so I guess Sony could get them cheap.

Also Jeff grub is full of shit and reminds me of the kid that always had info from his uncle at Nintendo.
 
CatLady

CatLady

Selfishly plays on Xbox Purr-ies X
CosmicComet said:
This is definitely not happening.

And I don't think it should. I don't think the current Cali Sony mixes well with SE's philosophsies in general.

I'd be more ok with Nintendo or even MS buying SE than Sony right now.
Click to expand...

Nintendo buying S/E would be great. I'm also fine with Sony buying them, actually I'm good with anyone just as long as it's NOT Xbox.
 
Topher

Topher

Gold Member
ZehDon said:
They just shed Eidos, Crystal Dynamics and SE Montreal, and with them, the only reasons I'd care. Their back catalogue is extremely potent, agreed, but their current efforts aren't really anything I care about. Sony could spend their money better elsewhere.
Click to expand...

All reasons why I think this isn't happening.
 
Fredrik

Fredrik

Member
Tiago Rodrigues said:
I mean... final fantasy vii remake is still exclusive, ffxvi will be exclusive (supposedly timed), Forspoken will be exclusive.

The only thing this acquisition would change is the word "timed" at this point.

It does make sense though. Sony has a lot of the same businesses Square Enix has, including manga so...
Click to expand...
Yeah it’s now the least interesting acquisition I can think of, Sony already treat FF like an exclusive IP.
Tomb Raider was the real thing to be properly concerned about, I’m so glad Embracer stepped in and bought Crystal Dynamics and Tomb Raider.
 
K

Kenshin775

Member
They should do it.. It would be a smart move for the future. I do believe Sony will pivot to Day 1 games on PS Plus and having all those FF14 Subcribers merged into their service would be big.

Not trying to List War but damn Destiny, Ff14 and other Final Fantasy games, Spiderman, Wolverine, God of War, Dragon Quest, Bungie new IP, Kingdom Hearts, Uncharted. LoU, Demon Slayer, Ghosts of Tsushima, Gran Turismo, Horizon plus other big IP I am probably forgetting. This is some strong and well known IP that can carry a service.
 
Heisenberg007

Heisenberg007

Gold Journalism
It'll be a good purchase, especially in the long-term, but I feel Sony has better options at the moment.

Whatever is left for SquareEnix, Sony already has a major stake in it: Final Fantasy XVI, Final Fantasy VII Remake Part 2, Forspoken, Final Fantasy XIV are all PlayStation exclusives anyway. Just pay for Kingdom Heart's and Dragon Quest's exclusivity, and you already have all the output locked to PlayStation.

Then invest the acquisition money somewhere else: Capcom, WarnerBros, Ubisoft, etc, and get that output for PlayStation's as well. That can give them a bigger competitive advantage.
 
OsirisBlack

OsirisBlack

Banned
Perrott said:
Makes sense.

Square Enix market valuation has dropped from 7.4B in September of last year down to 5.6B in February and 4.8B just yesterday. With them getting rid of their NA studios, their overall worth will most likely continue to get lower and lower, and with arguably most of the fat out of the equation, Square Enix is now left (at least in the AAA scene) with the stuff that we've seen Sony invest so heavily over these last couple of years, especially in terms of console exclusivity: Final Fantasy (XIV, XVI, VIIR...), Kingdom Hearts and Forspoken, as well as beloved franchises such as Dragon Quest, NieR/Drakengard, and a legacy catalogue of iconic names such as Parasite Eve, Chrono or Xenogears. All of these are really hot platform-defining IPs that would massively drive interest from those fanbases towards the future of the PlayStation ecosystem, if they weren't a part of it already.

So back to the point about SE's market valuation, if Sony were to purchase them now and pay shareholders a 40% premium for each of their shares, then we'd be looking at a price tag of just a little over 7B for the acquisition - one with 1100~ less employees than last week, which may be of interest when it comes to lowering the operating cost of the subsidiary - something that would be a good and cost effective use of part of SIE's M&A budget. In reality, the price would probably be even lower than that, as I don't see SE breaking the downwards tendency of their stock anytime soon, especially with their CEO being an absolute moron and Final Fantasy XVI slipping into 2023.
Click to expand...
Source?
 
Chukhopops

Chukhopops

Member
Once they port the Pixel Remasters to consoles there’s nothing to salvage out of SE’s bloated corpse anyway, makes sense that they would sell and make NFTs of their Golden Age.

Crazy how Blizzard / Bioware / Squaresoft was once my favorite trio and now they are just IP puppets begging for a corporation to shove a hand in their ass to make them move.
 
S

StealthGoblin

Banned
When I thought about SE as the acquisition candidate it was always the Western arm that I thought would be the biggest issue for Sony as they just seemed poorly managed and all over the place.

SE as they are now seem a lot easier to oversee (I don’t think they’ll be exclusive, more like a publisher with autonomy like Bungie). There would still be some parts of the Japanese business that would need to be streamlined - just looking at their subsidiaries is a major shock because they are all over the place.
 
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