Embracer Group has entered into an agreement to acquire Crystal Dynamics, Eidos-Montréal and Square Enix Montréal from Square Enix, as well as a catalog including Tomb Raider, Deus Ex, Thief and more than 50 other intellectual property.
Embracer Group paid $300 million for the studios and related IP, and it was on a “cash and debt-free basis, paid in full at closing,” according to the company. Collectively, the acquisition will bring approximately 1,100 employees from the three studios, across eight locations around the world, to the Embracer Group. The acquisition is expected to close in the second year of Embracer’s 2022-23 fiscal year, or in other words, sometime between July and September this year.
“We are delighted to welcome these studios to the Embracer Group,” Embracer Group co-founder and group CEO Lars Wingefors wrote in a press release. “We recognize the outstanding intellectual property, world-class creative talent and track record of excellence that has been demonstrated time and time again over the past few decades. It was a pleasure meeting the leadership team and discussing their future plans for realizing their ambitions and becoming a valued part of Embracer.”
Square Enix U.S. and Europe CEO Phil Rogers wrote in a press release that Embracer is the best-kept secret in gaming because it’s “a large, decentralized collection of entrepreneurs, and we’re excited about it. Be a part of it today.” He called Embracer Group a perfect fit for Square Enix’s Americas and Europe ambitions to “produce high-quality games with great people in a sustainable manner and grow our existing franchises to the very best version.”
Since Embracer acquired not only Crystal Dynamics but also the Tomb Raider IP, it sounds like the next Tomb Raider game (announced a few weeks ago to be developed entirely in Unreal Engine 5) will be the Embrace title. As for why Square Enix decided to sell the studios, which include the studios behind Marvel’s Avengers and Marvel’s Guardians of the Galaxy, Square Enix cited “adapting to the changing global business environment” and district The rise of blockchain technology, cloud gaming, artificial intelligence and their respective investments.
“This transaction will help the company adapt to changes in the global business environment by establishing a more efficient allocation of resources, which will enhance company value by accelerating the growth of the company’s core business in digital entertainment,” Square Enix wrote. in its own version. “Furthermore, the deal enables new businesses to be launched by advancing investments in areas such as blockchain, artificial intelligence and cloud.”
Reading between the lines, Square Enix made it clear that it was sometimes underwhelmed by the output of its Western studios, calling Crystal Dynamcis-developed Marvel’s Avengers a disappointment in November, and saying Eidos-Montréal’s Guardians of Marvel Despite the rave reviews, the Galaxy fell short of initial expectations.
Going forward, Square Enix said that its studios in Japan, Square Enix external studios and the Square Enix Collective will continue to make games, and that the company will continue to “publish Just Cause, Outriders and Life is Franchise like Strange.”
After the deal closes later this year, Embracer Group said the U.S. will be its number one country for game developers, with Canada in second place.
“Overall, after the pending closure, Embracer will have more than 14,000 employees, 10,000 participating game developers and 124 internal studios,” the release reads. “Embracer’s upcoming content pipeline includes more than 230 games and 30+ AAA titles. This acquisition will bring greater scale to Embracer’s current AAA segment, which will have the largest PC/console game in the industry One of the content pipelines, covering all genres.”
The company said it believes there will be a growing demand for “high-quality content, including AAA single-player games,” over the next decade, and the deal will help meet that demand.
The Embracer Group acquisition joins a lineup of other acquisitions that have so far largely defined the game in 2022. It started with Take-Two Interactive, the parent company behind the Grand Theft Auto franchise, which announced in January that it would buy mobile giant Zynga for nearly $13 billion. A week later, Microsoft announced it was buying Activision Blizzard, the company behind Overwatch and Call of Duty, for $68.7 billion, and two weeks later, Sony announced it was buying Bungie for $3.6 billion. A few weeks later, Sony also announced the acquisition of Jade Raymond’s new studio, Haven Studios.
Despite an uptick in acquisitions this year, Embracer Group has been increasing its studio count over the years. For example, it acquired World War Z studio Sabre Interactive in 2020, and then in 2021, Embracer Group acquired Perfect World Entertainment and Dark Horse Media.
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