All this talk of Square Enix acquisition without acknowledging how Yuji Horii has the power to put a kibosh on such a deal is just... wow.
As
@fiendcode handily illustrates, a huge volume of SQE revenue comes out of Japan, and I'll give you 1 guess to figure out which IP is the most responsible for that. I'll give y'all a hint: it's the one Square Enix isn't the sole rights holder to.
As I mentioned in the SQE business strategy thread when this came up last time, any acquisition of SQE has 3 major roadblocks:
- They need to get Yasuhiro Fukushima (founder of Enix and the largest single shareholder) on board for the deal to ever be possible
- They need to either:
- Get Armor Project, Bird Studio and the estate of Koichi Sugiyama unanimously on board or they'll lose Dragon Quest, which is responsible for potentially as much as 30% of SQE's entire market cap, thus any deal without them would involve drastically over-paying
- Get SQE to relinquish all trademarks and copyrights for Dragon Quest to the 3 mentioned parties prior to the deal and accept a much lower valuation
- They need every relevant division of Sony Group on board to readily absorb SQE's other business ventures, some of which Sony Group has never been in before (because Sony Group doesn't exist just to dump excess business ventures into that SIE doesn't want to or can't operate, y'know), lest they have to sell divisions at a loss (because any subsidiaries/divisions sold after an acquisition are sold at a loss since everyone recognizes it's the new parent company off-loading undesirable business ventures)
#1 could be achievable, but #2 & 3 are perhaps most important and are highly unlikely to be resolvable in a way that Sony would accept.
Even if we set aside DQ for a hot second, what is more likely to happen is that Sony would make an offer after internal deliberation on what SQE divisions they can absorb and make the proposal for sale only after SQE divests in the business areas Sony cannot or will not absorb (likely Taito and its amusement centre business, if we're being real, but quite possibly more). SQE just recently shed IP that may have been of interest to SIE with the sale of SQE Europe to Embracer Group, which prompted this discussion the last time. But if we are to see an acquisition, it's exceptionally likely you'd see even more shedding over at SQE to make them a far more acceptable acquisition target. But to do that, you'd need to find a way to do it that doesn't invoke the wrath of shareholders by keeping share price at the same level or higher while doing so.
And that's when we come back to DQ. Any relinquishing of IP rights or trying to adjust the company's valuation with the loss of DQ in mind would mean that any price per share outlined in an acquisition deal would likely be too low for a shareholder to accept. So in the end, you NEED Yuji Horii on board, or the whole thing falls apart.
If SIE is after Square Enix for Final Fantasy, Kingdom Hearts and their associated talent (which seems to be what everyone argues is most valuable to them), the far simpler solution instead of just buying Square Enix is getting Square Enix Holdings to put the staff in Creative Business Units I & III and Luminous Productions into a separate shell company along with the IP those teams primarily develop (FF, KH) with its own valuation and just sell that to SIE, while leaving Yuji Horii and the rest of their business ventures alone. It'd be cheaper and easier than any proposed alternative.
Damn, I had no idea JP 3rd party publishers relied that heavily in the JP market.
Looks like the current strong dollar will mostly benefit Nintendo (and probably SIE) by far.
Anyone who suggested otherwise was lying to you.
Now imagine how these numbers are based on the
current configuration of the industry; Japan's percentage of revenue was probably a lot larger when 3rd-party publishers were releasing their biggest IP on hardware that Japanese people owned in huge numbers. So anyone saying that the West will save Japanese publishers has been fooling themselves; lower-budget games on market-leading hardware that sell large numbers of copies in Japan have been subsidizing AAA sales performance at home and overseas for the better part of a decade now.