Embracer Group has entered into an agreement to acquire Crystal Dynamics, Eidos-Montréal and Square Enix Montréal from Square Enix, along with a catalog of intellectual properties that also includes Tomb Raider, Deus Ex, Thief and more than 50 others.
The Embracer Group pays $ 300 million for these studies and associated IPs, and does so on a “cash and debt-free basis that must be paid in full upon closing,” according to the company. In total, this acquisition will result in approximately 1,100 employees from these three studios, spread across eight locations around the world, becoming Embracer Group employees. This acquisition is expected to close during the second year of Embracer’s financial year 2022-23, or in other words sometime between July and September this year.
“We are excited to welcome these studies into the Embracer Group,” Embracer Group co-founder and CEO Lars Wingefors wrote in a statement. “We recognize the amazing IP, world-class creative talent and track record of excellence that have been demonstrated time and time again over the past decades. It has been a great pleasure to meet with management teams and discuss future plans for how they can realize their ambitions and become a big part of Embracer. ”
Square Enix America and Europe CEO Phil Rogers writes in the release that Embracer is the best kept secret in gaming, being a “massive, decentralized collection of entrepreneurs that we are excited to be a part of today.” He calls the Embracer Group the perfect fit for Square Enix America and Europe’s ambitions, which are to “make high quality games, with amazing people, sustainably and develop our existing franchise to their best versions.”
As Embracer buys not only Crystal Dynamics but also Tomb Raider IP, it sounds like the next Tomb Raider game, announced just a few weeks ago as a title that will be fully developed in Unreal Engine 5, becomes an Embracer title. As for why Square Enix decided to sell these studios to begin with, which includes the studios behind Marvel’s Avengers and Marvel’s Guardians of the Galaxy, Square Enix cites “adaptation to the ongoing changes in the global business environment” and the emergence of blockchain. technology, cloud games, and artificial intelligence and its own investment in each.
“The transaction will help the company adapt to the ongoing changes in the global business environment by establishing a more efficient allocation of resources, which will increase the company’s value by accelerating the growth of the company’s core businesses in the digital entertainment domain,” writes Square Enix. in its own publication. “In addition, the transaction enables the launch of new business by moving forward with investments in areas such as blockchain, AI and the cloud.”
Reading a little between the lines, Square Enix has made it clear that it has at times been less than impressed with its Western studio output, calling Crystal Dynamicis-developed Marvel’s Avengers a disappointment back in November, stating that Eidos-Montreal’s Marvel’s Guardians of the Galaxy underwent its initial expectations despite strong reviews.
Going forward, Square Enix says its studios in Japan, Square Enix External Studios and Square Enix Collective will continue to make games, and the company will continue to “release franchises such as Just Cause, Outriders and Life is Strange.”
After this transaction closes later this year, the Embracer Group says the United States will be the country’s number one country by number of game developers, with Canada in second place for it.
“In total, after pending closures, Embracer will have more than 14,000 employees, 10,000 dedicated game developers and 124 in-house studios,” the release reads. Embracer’s upcoming content pipeline includes more than 230 games with more than 30 AAA games. This acquisition will bring further scale to Embracer’s current AAA segment, and Embracer will have one of the largest pipelines of PC / console game content across the industry. , across all genres. ”
The company says it believes there will be an ever-increasing demand for “high-quality content, including AAA single-player games,” over the next decade, and this transaction will help it meet that demand.
Embracer Group’s acquisitions join a number of other acquisitions that have largely defined gaming in 2022 so far. It started with Take-Two Interactive, the parent company behind the Grand Theft Auto series, announcing back in January that it had acquired mobile giant Zynga for nearly $ 13 billion. Then, a week later, Microsoft announced that it had acquired Activision Blizzard, the company behind Overwatch and Call of Duty, for a whopping $ 68.7 billion, and two weeks later, Sony revealed that they were buying Bungie for $ 3.6 billion. A few weeks later, Sony also announced that they had acquired Jade Raymond’s new studio, Haven Studios.
Despite the increase in acquisitions this year, the Embracer Group has increased the number of studies for years. For example, it bought the World War Z studio Saber Interactive back in 2020, and in 2021, the Embracer Group bought Perfect World Entertainment and Dark Horse Media.
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