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Square Enix Looking to Sell Stakes in Its Studios to "Improve Capital Efficiency" [Update: Luminous Productions Merging With Square]

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calm_mongoose said:
Why should Nintendo sell off Retro Studios? The Donkey Kong games were fairly successful, right? And they're working on Metroid Prime 4. It's not their fault that the game has been in development for so long. Metroid Prime 4 will be the best selling Metroid game ever. According to google it could accomplish that will 3m in sales. Easy.
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Their last game was DKTF in 2014, its been 8 years since then, game studios costs a lot of money to keep.

I can see Nintendo thinking about closing them if it wasnt for Metroid Prime 4
 
Damage2 said:
Their last game was DKTF in 2014, its been 8 years since then, game studios costs a lot of money to keep.

I can see Nintendo thinking about closing them if it wasnt for Metroid Prime 4
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DKTF Switch port has probably sold enough to make Retro profitable during the Switch era. If Nintendo hasn’t made them become a support studio that means they are happy with the current direction of the studio we just have to wait for the results which they should come soon if the rumors of Prime 1HD being one of Nintendo’s holiday games this year is true. Nintendo already greenlighted the remaster of Prime 1 before giving them Prime 4 so I don’t think they were ever at risk of even repurposing
 
NdCube also had an interim period where the former head of Quest was in charge of it.
 
Diaochan said:
In US Dollars:

Bandai Namco - 295 millions dollars (very small for the size of Bandai Namco)
Konami - 4 millions dollars (very very small for Konami)
Koei Tecmo - 875k dollars (Koei Tecmo is a very small company but this has to be a joke from Nintendo)
Square Enix - 4 millions dollars ( very very small for Square Enix)
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Wow! Thank You for the numbers!
hmmmm would Nintendo invest so little in these companies to
be aware of future mergers or buyouts, perhaps?
 
Feels like a quick way to look for investor of same interest(gaming) to the company there. Considering how turbulent SE atm is doing i am not going to be surprised if this is a good way to generate money on short term with little risk of being take over as the investment is toward their division rather than the whole body of the company.
 
Diaochan said:
In US Dollars:

Bandai Namco - 295 millions dollars (very small for the size of Bandai Namco)
Konami - 4 millions dollars (very very small for Konami)
Koei Tecmo - 875k dollars (Koei Tecmo is a very small company but this has to be a joke from Nintendo)
Square Enix - 4 millions dollars ( very very small for Square Enix)



They should add Capcom as they are doing well



Was it bad news when Nintendo sold off Rare? You decide.

My opinions below:

Good news for Square Enix! Very smart! for the short term that is.

The one we should be worried about is Nintendo as they should sell off Retro Studios right now immediately.
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What does SE doing joint venture or selling shares of existing studios to outsiders have to do with Nintendo?

I swear you console warriors need to drag any platform holder into every discussion. Must be nice to leave rent free in your head.
 
Square opening new western studio?
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    • Video Games Chronicle is reporting that Square Enix may be in the process of establishing a new western studio named "Studio Onoma".

    The studio is the subject of a pending application that appeared on the Canadian Trademarks Database last week.

    According to the application, Studio Onoma will primarily design, develop and publish computer and video game software.
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    The trademark applicant is listed as Square Enix Newco Limited, a recently established company based in London, UK.

    According to Companies House, Square Enix Newco was incorporated on April 19, 2022. The nature of its business is listed as “publishing of computer games.”
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  • Index
    • fiendcode said:
    For those wondering Square Enix's Japanese (HD games) R&D Groups consist of:
    • Creative Business Unit 1 (FF, KH, SaGa)
    • Creative Business Unit 2 (DQ, Nier, Asano)
    • Creative Business Unit 3 (FFXIV, Ogre)
    • Creative Business Unit 4 (mobile, Mana)
    • Luminous Productions
    • Tokyo RPG Factory
    • Extreme Edges (localization)
    • Taito (amusement, selfpublishing)
    This doesn't include stuff like CGI, AI or mobile only/focused R&D.
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    Good luck finding any investors for these two trash heap studios.
     
    CBU 2 is going to get Nintendo investment till hell turns cold lol.
     
    Ogre's under CBU1 it turns out btw. I figured CBU3 might be doing Reborn since that's where most of the Quest staff ended up but apparently not.
     
    Meanwhile, Embracer's acquisition of Crystal Dynamics, Eidos-Montréal, and Square Enix Montréal is complete.

    On 2 May 2022, Embracer Group AB ("Embracer") entered into an agreement to acquire the development studios Crystal Dynamics, Eidos-Montréal, Square Enix Montréal, and a catalog of IPs including Tomb Raider, Deus Ex, Thief, Legacy of Kain and more than 50 back-catalog games from SQUARE ENIX HOLDINGS CO., LTD.

    All conditions for the transaction, including regulatory approvals, have now been fulfilled and the transaction may be completed. Embracer has, therefore, today completed the acquisition.

    The companies will form the 12th operative group under the leadership of Phil Rogers and his management teams.

    Further information will be given by the companies and Embracer Group at a later date.
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    ILikeFeet said:
    SIE would be a premo purchaser for Luminous, unironically
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    Yeah, even if Forspoken falls flat the core team still has an impressive legacy track record going back (FFXV, FFXIII, Type-0, Dissidia, Crisis Core, etc). They seem like an easy investment opportunity for SIE and unlike most JP studios (and the rest of SE bar possibly cash-cow CBU3) they align with San Mateo's priorities.
     
    More comments on co-ownership of studios
  • Index
    • President Yosuke Matsuda provides some insight into what Square's "new capital structure" for select studios will involve on page 8 of the company's annual report:

    By "a more diversified capital structure of our studios," I refer to not fixating on full ownership and instead making various patterns of the studios' capital structure that enables sharing development risk with partners. Such a strategy would allow us to grow our studio portfolio as a whole while exposing ourselves to ess risk. Specifically, we would diversify the capital structure of our studios by not only owning some studios outright, but also by welcoming third parties to take stakes in some of our studios or by our taking stakes in studios outside the Group. In this way, we would create a studio portfolio that spans a continuum from studios that we own outright to those that are equity-method affiliates or less. Under such a strategy, we would also engage in M&A activities, for example, and work to achieve a balance between growth and financial stability.
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  • Index
    • frog said:
    Do they mean something like Sony investing in the Final Fantasy studios or Nintendo with DQ, etc?
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    It sounds like that's one option(I assume fishing for an investment in Luminous tbh) but also minority stakes in external developers and joint ventures.
     
    Only tangentially related, but I remember back when Square designed and debuted a new character, and put the call out to other studios to pitch ideas for games based on their concept trailer.



    I don't think that went anywhere in the long run. I wonder if they'll ever try anything like that again as part of this new co-ownership venture.
     
    Luminous Productions being merged into Square Enix
  • Index
    • Following the release of Forspoken, Luminous Productions is now being merged into Square Enix. Judging by the announcement, Square Enix still values the studio's technical capabilities and feels it will enhance the overall Square Enix group's ability to develop HD games.

    Tokyo, Japan (February 28, 2023) - SQUARE ENIX HOLDINGS CO., LTD. (headquartered in Shinjuku, Tokyo; President and Representative Director Yosuke Matsuda; hereinafter the “Company”) announces that it will merge its wholly owned subsidiary Luminous Productions Co., Ltd. into its wholly owned subsidiary SQUARE ENIX CO., LTD. effective Monday, May 1, 2023.

    The merger is part of the Company’s efforts to further bolster the competitive prowess of the Group’s development studios, a goal set forth under its current medium-term business strategy. SQUARE ENIX CO., LTD. has developed numerous AAA high-definition (HD) games and possesses a wealth of intellectual property (IP) and content. Luminous Productions Co., Ltd. is meanwhile equipped not only with AAA title development capabilities but also technical expertise in areas such as game engine development. Combining the two entities will further enhance the Group’s ability to develop HD games.
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    Announcement link.

    A quick summary of what Luminous Productions is/was:
    • Luminous Productions is the team that developed Final Fantasy 15
    • In March 2018, Square Enix spun it off into its own external company
    • Luminous was going to "bring innovative game and other entertainment content to a global audience"
    • Then, in November 2018 Square Enix announced that Luminous's focus would shift to just AAA game development
    • Around this time, studio head and FF15 director Hajime Tabata left Luminous and all remaining FF15 DLC was cancelled
    • Development of Forspoken began in 2019
    • Luminous ramped up to 150 employees (as of June 2020) to work on the game

    • In May 2022, Square Enix announced that it was selling its entire Eidos group and IPs to Embracer, leaving them with $1.4 billion in cash and zero debt
    • In August 2022, it was revealed that this was part of a larger effort to "improve capital efficiency" at Square Enix
    • As part of this effort, Square would retain ownership of some of its studios, share ownership of others, and sell others off entirely

    • In January 2023, Forspoken was released to lukewarm reviews
    • As of today (Feb 28, 2023), Square has decided to assimilate the Luminous Studio staff into the parent company
    • Square believes Luminous's technical proficiency will aid the overall parent company in the development of HD games

    Note: this news has its own separate thread here, but I also wanted to include it as part of this thread so we have a consolidated archive of everything going on with Square's approach to its studios.
     
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