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Acquisitions in the Gaming Industry - Discussion, Evaluation and Predictions
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Licensing the IPs makes complete sense. It's been 7 (!) years since the last Batman game. It's not smart to have an IP as lucrative as that one rest for that long. They will have to let other publishers make games with their IPs since WB have so few studios themselves.
This makes sense I don’t see Discovery wanting a game studio around & would rather prefer other people handle the quality control of games.
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bidding war's gonna be insane if all these parties are interested, and wasn't WB asking 4BI one year ago for the entire game division without the IP's? i'd imagine the price skyrockted after all recent acquisitions, Bungie , ABK etc
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From what I understand, that 4 billion number was greatly overestimated what anyone was willing to actually pay.
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Management/executives that crapped the bed while having a large amount of shares (Kotick, Guilemot, Todd), do not care about anyone else and want to cash out millions as a reward for ruining the company.
Zenimax had revenue issues iirc, ABK has had serious talent leave and executive management issues, Ubisoft has had executive management issues alongside a series of disappointments, WB deal was leveraged on a high amount of debt....
CDPR isn't doing too well as well.
Inflation is making money worth less everyday, so anyone with cash is probably looking to move it and get something out of it. Gaming is probably one of the best bets at the moment.
Some indie devs are probably next. The IP race is going to be huge in the next years. I wonder if the Mario movie does well, will Nintendo buy some animation studio? Partnering with Ilumination makes sense since they dont have the capacity to do it on thier own, but it doesnt make sense to keep splitting revenue.
Some indie devs are probably next. The IP race is going to be huge in the next years. I wonder if the Mario movie does well, will Nintendo buy some animation studio? Partnering with Ilumination makes sense since they dont have the capacity to do it on thier own, but it doesnt make sense to keep splitting revenue.
As @enpleinjour said but also Zenimax had scandal issues as well. Also just classics behavior from execs when they don’t give a shit anymore.
Regardless this was probably going to happen but it has been accelerated due to scandal & management issues. You saw it happening with Netease, Nordic, & Embracer with smaller companies & ips. We also see Tencent investing in lots of companies with people like the Saudi Prince (Fck him lots) buying a game company.
Judging from the tweet it sounds like they are separate.
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I doubt IP is a part of it, I think they are trying to go the Disney route where they will license out the IP without all the risk of being a Gaming Publisher
I imagine studios with big games coming soon from WB will be sold after those games are released in order to maximize value. That leaves us with TT (supposedly the Lego license is running out) and NR for now (I believe their next game should be announced soon though).
Then we have their mobile studio Warner Bros Boston and support studios Warner Bros games: New York, San Francisco and San Diego. Still, sad to see what its happening with the industry.
Yup just like Bethesda & ABK in that regard.
For the support & mobile studios either they’ll be closed or sold off in a pittance.
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Well, isn't MK almost the only IP their internal studios still make games for that isn't based on another media property that pre-exists outside of video games?
That's kinda always been WBIE's biggest problem, that they don't have enough sellable game IP that anyone considers worth buying and any that are are multimedia franchises that have more value in other media spaces.
I imagine a lot of the interest from publishers is them looking to buy Rocksteady or Monolith and task them to make something other than a AAA game with a multimedia license, which explains why they have some nibbles compared to the last offer WBIE tried to float, but I doubt Netherrealm would go anywhere without MK, unless the IP is on the table to go with them (with WB retaining indelible movie rights, of course).
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I get the inflation angle, but I'm still hesitant about the bolded notion. At least with Bungie, besides the Destiny IP, Sony got top-of-the-line expertise which was in line with their current strategy. With ABK Microsoft would get one of the biggest video game IPs under their roof. Output-wise, WB Games have been on similar coast away as Ubisoft for the past ~half a decade or more. Ignoring the headcount, the major difference between the aforementioned two is that the buyer (at least according to the murmurs) needs to pay for making the new Batman, the new MK, etc. which made the $4B asking price a bad deal two years ago and it still sound like one.
I kind of want to see that game now. Big 180 certainly from the 90s.
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TT games, Rocksteady, NetherRealm and Monolith are incredibly talented studios.
Its like saying I don't see a point buying Bungie, or Respawn because they don't have the Halo or COD IPs. Meanwhile, Bungie created Destiny which outsold any Halo game possibly by two times and is now one of the biggest multiplayer games ever and Respawn has made Titanfall, Apex and SW JO.
Rocksteady and Monolith Productions have been struggling quite a lot. It's been ~5 years and ~7 years since Shadow of War and Arkham Knight were released. At the earliest Suicide Squad will be released in 2023. With Wonder Woman there isn't a release year given so who knows when that will be shipped. There are a lot of expectations that both of their upcoming games redeem the lengthy and costly development. I wouldn't bet money on this, but maybe that's just me.
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I would definitely bet my money on Netherrealm, TT games, Rocksteady and Monolith. Netherrealm have the second best selling fighter, TT games are a very rare studio in creating quality family games that have sold very well, Rocksteady have made some of most acclaimed open world/city games of all time and SQ is looking fantastic, and Monolith were/are a real talent house. Creators of cult classics like FEAR, Condemned and I heard SoM was good as well.
Even Avalanche may have a breakout hit with Harry Potter critically and commercially.
That Twitter preview is bound to give a heart attack to some people xD
Anyway, gonna be fun when Microsoft ends up buying Embracer Group.
Still, $300m seems rather cheap, especially as it's not just the studios but the IPs too.
Anyway, gonna be fun when Microsoft ends up buying Embracer Group.
Still, $300m seems rather cheap, especially as it's not just the studios but the IPs too.
I think people thought it would be one of the bigger players and for more money.
Embracer is one of the bigger players, but yeah that price is surprisingly low.
Reading the SE press release, it seems that they will keep control of a few IPs. It'd be nice if they released a list of all IPs included in this transaction, but I can't find any. Maybe it's just the IPs that were developed externally, as they list Just Cause, Outriders and Life is Strange as remaining at SE.
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Those IP's also likely perform well enough for Square Enix to warrant keeping them. Life is Strange especially since that usually sold well and has a much smaller budget compared to Tomb Raider or Deux Ex.
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Here I wake up and rush to my PC to check whether the Xenoblade 3 Collector's Edition is finally up for pre-order (as I've been doing anxiously for the past week, thanks Nintendo :/), only to find out that the next mega acquisition took place ... except you wouldn't know from the ridiculous low sum involved.
300 mio for Tomb Raider?! And Deus Ex, Thief and others on top? WTH?! Getting ahold of the most iconic female video game character with that cheap price just feels wrong. And I don't think you can point to Crystal Dynamiacs/Eidos only making about 100 mio in revenue last year, a properly handled Tomb Raider-game will easily make more, and Deus Ex is one of the most interesting scifi-rpg franchises out there.
I can't see th is as anybody but bad for gamers. Embracer might not be a Chinese firm (which brings a whole other slew of negatives, like anti-LGBT or silly anti-ghost rules), but a Swedish company buying up all these long-standing gaming companies can't be good either. At some point they'll try something dumb like announcing their own streaming service and all their games are exclusive to that service, or something like that :/
300 mio for Tomb Raider?! And Deus Ex, Thief and others on top? WTH?! Getting ahold of the most iconic female video game character with that cheap price just feels wrong. And I don't think you can point to Crystal Dynamiacs/Eidos only making about 100 mio in revenue last year, a properly handled Tomb Raider-game will easily make more, and Deus Ex is one of the most interesting scifi-rpg franchises out there.
I can't see th is as anybody but bad for gamers. Embracer might not be a Chinese firm (which brings a whole other slew of negatives, like anti-LGBT or silly anti-ghost rules), but a Swedish company buying up all these long-standing gaming companies can't be good either. At some point they'll try something dumb like announcing their own streaming service and all their games are exclusive to that service, or something like that :/
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I'm okay with Embracer buying as it provides more competition to the what was once the big 4 (Activision, EA, T2 and Ubisoft) but is now just 2. The gaming sector needs more diversified control of IPs now more than ever!
But I cannot believe SE actually sold their iconic IP and very talented dev teams.
But I cannot believe SE actually sold their iconic IP and very talented dev teams.
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On another thought:
What do you guys think, does this make an acquisition of SE by Sony more likely?
Without the Western baggage, SE is now a purely Japanese publisher. Probably easier to swallow up for Sony. But is it worth it to lose sales from Nintendo-systems?
What do you guys think, does this make an acquisition of SE by Sony more likely?
Without the Western baggage, SE is now a purely Japanese publisher. Probably easier to swallow up for Sony. But is it worth it to lose sales from Nintendo-systems?
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Don't bet on it. If they're casting off what they consider to be weighing them down and only have internal Japanese studios, it speaks to me that they are meeting the moment and re-doubling their Japanese release efforts without the financial burden of Western AAA development.
So in terms of SIE buying them, speaks to me of the opposite, actually, as SIE doesn't seem to have much interest in the Japanese market right now and this move looks like trying to focus more attention on products for that market, so the value of SQE in SIE's eyes will have diminished with this deal.
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Don't think so personally. There are probably arguments for both sides but I think Eidos, CD and especially would have been valuable if you were courting acquisitions.
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I don't think so.
Here is my reasoning: if those studios really only added $300 mill USD to the bill that's not much more when Sony would be spending billions.
Sony is already getting 2 of SE's biggest games exclusively. FF16 and Forspoken. They already have FF14 and FF7R exclusively (xbox versions yet to materialise although it seems more likely that the latter would come sooner).
Square Enix does not own two of the biggest IP they work on, Kingdom Hearts and Dragon Quest, so Sony would mainly be buying them for FF (other franchises are much smaller) and they already have that franchise on lock without spending billions or taking on the overheads of 5.5k more employees. And SE still has a manga and book publishing, and merchandising business that Sony may have not any interest in.
It's not impossible of course but it doesn't seem like it makes a lot of business sense to me.
And the rest of SE is doing well overall.
Honestly, SE was probably a more attractive buy to PlayStation when Eidos came with them.
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But what makes this even more non-sensical to me: For the past 2 years, we've been looking at an industry that keeps doing acquisitions and consolidations. And here we have Square Enix, a reasonably big player, and they suddenly sell of two renowned studios including some of the most popular franchises in gaming. Why? What are the advantage of downsizing in this day and age? If a game or two underperformed, you'd do a proper, honest evaluation of the projects and see what went wrong. Tomb Raider and Deus Ex are strong franchises, any underperformance issues lie elsewhere, but not with the ip. But simply selling these off, only makes SE smaller. And there's no way they'll easily find replacements for both the developers man power and the lost ips' pull.
That is what really makes me think they've given up already and started preparing the sell-out to Sony. Sony's interest has always been in SE' Japanese ips (Final Fantasy, Kingdom Hearts, Dragon Quest, Nier, etc.), that's what Sony kept moneyhatting. Maybe SE ceos made that 300 mio deal for some quick cash or making the company more "lean" before making Sony an offer. But whatever way, selling these studios and ips doesn't strike me as the business move of a healthy company.
That is what really makes me think they've given up already and started preparing the sell-out to Sony. Sony's interest has always been in SE' Japanese ips (Final Fantasy, Kingdom Hearts, Dragon Quest, Nier, etc.), that's what Sony kept moneyhatting. Maybe SE ceos made that 300 mio deal for some quick cash or making the company more "lean" before making Sony an offer. But whatever way, selling these studios and ips doesn't strike me as the business move of a healthy company.
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Well it wasn't a healthy company because those Western studios were losing them money so they cut them loose lol. Was that down to mismanagement? Probably, the fact is profit margins were razor thin and the studios were in debt it seems. The press release mentions that the transaction will be debt free upon completion.
And again Sqaure Enix does not own Dragon Quest or Kingdom Hearts.
When those franchises (and ff prior to 16) were exclusive it wasn't cos Sony had money-hatted they were de facto exclusives back then.
Nier is more popular but there's a big gap between that and the popularity or FF.
I don't think SE as a whole is in the red or in a position where they need to consider selling.
If SE wanted to make themselves more "lean" for Sony they would have sold off their manga and book publishing, merchandising and arcade business, not the one thing Sony might actually have wanted LOL.
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Idk I still doubt the idea of Sony acquiring Square after this. This seems to me to be a shrewd move to cut out parts of the company that was not as profitable and earn some quick cash in the process. Square Enix as a whole is still very profitable and I don't see them selling in the immediate future. Honestly, the loss of the Western Studios might even make the sale harder as I struggle to see Sony investing in a purely Japanese publisher without any sort of Western presence. Square still just seems too diverse to me, even the IPs you listed are all multiplatform except for Final Fantasy so the idea of Sony just swooping them up seems unlikely, especially considering how important Dragon Quest is in Japan. I expect Sony to invest more in Western studios and GAAS going forward, not into whatever Square is doing these days.
Yes, this exactly. If SE had wanted to make themselves a leaner and more attractive acquisition target for Xbox, PlayStation, Tencent, etc, you'd think they offload divisions like Amusement (Taito) or Manga (Gangan) rather than their set of AAA EU studios who've delivered 5-10m sellers like Tomb Raider and Deus Ex.