Published on: 04/05/2022

Square Enix sells off Tomb Raider, franchise studios

Square Enix, the Japanese publisher of the Tomb Raider video game series, sells the franchise, studios, and associated IPs on a “cash and debt-free basis, to be paid in full at closing,” for $300 million, according to reports.

On Monday, Square Enix announced that it would sell three game development studios to Embracer Group, a Swedish firm. These studios are Eidos Interactive, Crystal Dynamics, and Square Enix Montreal. Besides Tomb Raider, Embracer has acquired the rights to three other video game franchises, including Deux Ex, Thief, and Legacy of Kain.

Embracer, originally a comic book and video game retailer, has grown into one of Europe’s largest gaming groups after acquiring major studios like Gearbox, the Borderlands shooter franchise developer, and Koch Media.

Approximately 1,100 people will be transferred from the three studios and eight locations acquired as part of the deal. Embracer expects the deal to close in the second quarter of its 2022-23 financial year if it goes through.

Embracer will have more than 14,000 employees, 10,000 game developers, and 124 in-house studios once the agreement is finalized. The deal came a month after Crystal Dynamics announced it was developing a new Tomb Raider game on Unreal Engine 5.

Square Enix plans to invest in new technology.

Analysts claimed Square Enix’s Western assets sale price was low, but the company had been seeking a buyer for some time. According to Ampere Analysis’s head of games research, Piers Harding-Rolls, Square Enix has been trying to sell this section of the business to restructure and focus its efforts on investments.

To cut costs in a challenging global business environment, Square Enix sells assets and invests in new technologies such as blockchain.

People on social media reacted negatively to the company’s pledge to increase blockchain spending, the technology behind many cryptocurrencies. According to one user, it is like selling your home for magic beans.

NFTs—digital assets designed to represent the ownership of one-of-a-kind collectible items—have typically been viewed with skepticism by the gaming community.

The technology’s advocates claim that it can open up new gaming experiences. Still, many gamers are skeptical, believing that NFTs are merely a money-making scam.

Upcoming update

The new Tomb Raider game and upcoming Crystal Dynamics and Eidos Montreal games have been revealed by Embracer’s CEO.

Square Enix just sold Crystal Dynamics, Eidos Montreal, and many games to Embracer Group on May 2. During a roundtable discussion later that day, Embracer CEO Lars Wingefors said that both studios had “very large AAA experiences in the pipeline.”

Aside from beloved franchises, Wingefors revealed that these “AAA experiences” are based on original IPs. The CEO added that the two studios’ “very interesting pipeline” now falls under Embracer’s leadership.

After these two years, Wingefors says the pipeline will be broader, but “fewer big new games” will be coming out. Wingefors promises “amazing things” from both studios after a few years of silence.

For $300 million, Square Enix sold off Crystal Dynamics, Eidos Montreal, and a few other games. Embracer’s leadership said that they “saw an opportunity to invest” in Tomb Raider and Deus Ex, especially since a new Tomb Raider game was still in development. The last new Deus Ex game was released in 2016, and it appears that the recent acquisition could lead to a return to the series.