Game News Tomb Raider, Deus Ex, Marvel… Square Enix’s complicated relationship with its Western studios
Published on 08/05/2022 at 10:25
Monday, May 2, we learned that Square Enix was selling its Western studios including Eidos, Crystal Dynamics and Eidos Montreal to the Swedish group Embracer. On this occasion, the editorial staff of JV invites you to take a look back at this tumultuous decade between the Japanese publisher and its Western productions deemed “disappointing”.
Summary
- A desire to open up to a new market
- A tumultuous decade for Square Enix
- Too high expectations from the Japanese publisher?
Decidedly, this beginning of the year 2022 is placed under the sign of redemptions. After Take Two which recovers Zynga, Microsoft which gets its hands on Activision-Blizzard-King and finally Sony which becomes the owner of Bungie, there were already enough acquisitions to upset the video game sector. While the month of May is just beginning, new information has once once more changed the video game landscape. Thus, Monday, May 2, Square Enix announced that it had sold Eidos Montreal, Crystal Dynamics and Square Enix Montreal to Swedish group Embracer for $300 million.. The transaction is expected to be finalized this summer.
A desire to open up to a new market
If the announcement had the effect of a small earthquake in the world of video games, it is also for the amount of this sale. 300 million dollars for three studios with 1,100 employees and more than fifty licenses, that doesn’t seem like much.especially for prestigious franchises like Tomb Raider, Deus Ex, Legacy of Kain, Thief, Sleeping Dogs… This is all the more the case when we compare these figures to other takeovers such as that of Insomniac (Marvel’s Spider-Man, Ratchet & Clank : Rift Apart…) by Sony in 2019 for 229 million or the 1.3 billion dollars spent by Embracer Group to get their hands on Gearbox (Borderlands 3, Tiny Tina’s Wonderlands…). On the one hand, we have to remember that Eidos and Crystal Dynamics have gone through some pretty complicated times over the past decade.
If we go back in time, it was in 2009 that Square Enix invested in Western development studios with the acquisition of Eidos, which also included Crystal Dynamics and IO Interactive. Following this acquisition, the first title to come out of this collaboration is none other than Deus Ex : Human Revolution in 2011, the return of a big name in the immersive-sim signed Eidos Montreal. With its 2.18 million copies sold worldwide in November 2011, pushing the publisher described sales as “favorable results”. Unfortunately, it’s from the next game that things start to go wrong. In 2012, it was IO Interactive’s turn to launch Hitman Absolution which is a disappointment for Square Enix as the title has only sold 3.6 million copies as of March 26, 2013, which is below initial expectations. Same thing the following year with Tomb Raider (2013) which sold 3.4 million copies worldwide, the franchise’s highest sales record, but failed to meet company targets.
A tumultuous decade for Square Enix
The following years will get better since in 2014 Thief will have “favorable” sales despite its poor critical reception, while Rise of the Tomb Raider launched in 2015 will do very well because the commercial success of the game will be deemed satisfactory by Square Enix. In addition to publishing Lara Croft’s new adventure, Microsoft also spent $100 million to make the title an Xbox exclusive for a year.. A sum that puts things into perspective when you see the takeover of these studios by Embracer Group. Unfortunately, the following projects will have a harder time establishing themselves in the video game landscape. Whether it be Hitman and its episodic formula or Deus Ex : Mankind Divided, the year 2016 will be judged as disappointing for the Japanese publisher on the side of its Western productions. Yes Shadow of the Tomb Raider manages to raise the bar with its more than four million copies sold at the end of 2018, the 2020s and the realization of the collaboration with Marvel are not going to have the expected effect.
With Marvel’s Avengers Launched in September 2020, Square Enix is trying its hand at Western-style game-service with a huge license to support it in its initiative. Unfortunately, the studio behind the project, Crystal Dynamics, is not specialized in this kind of productions. As a result, the title comes out in a complicated state and is sorely lacking in content at launch, despite an effective main campaign and gameplay.. If a year and a half later the game is still in service, it continues to suffer from a lack of activity which prevents it from attracting a new audience. In November, Square Enix acknowledged that Crystal Dynamics “did not have the necessary skills to work“on this kind of productions, which explains this”disappointing result“and the fact that sales of the game”were less than we expected and did not fully offset the amortization of game development costs“. Despite its radically different formula and the positive reception from the press and players, Guardians of the Galaxy will also have sales deemed disappointing by Square Enix. Fortunately, the title has recently been the subject of a strong resurgence of interest from the public thanks to its release in the Xbox Game Pass.
Too high expectations from the Japanese publisher?
After this little history, you will have understood that Square Enix never seems really satisfied with the sales of its Western games. One of the reasons that may explain this reaction is first of all the great hopes that the Japanese publisher places in its Western productions. As proof, Yosuke Matsuda, president of Square Enix since June 2013, himself admitted that for Tomb Raider (2013), the company’s expectations were “extremely high“. By dint of reading that the sales of Western games are disappointing, players have become accustomed to the fact that the Japanese publisher is never satisfied with these titles. In this sense, the acquisition of Eidos, Crystal Dynamics and Square Enix Montreal by Embracer Group is not so surprising, since that is also what happened with IO Interactive in 2017. Following the disappointing results of Hitman (2016), Square Enix decides to separate from the Danish studio which is then bought by its managers to become independent, keep the rights of the license and produce Hitman 2.
To understand why Square Enix’s expectations are so high for its Western games, you have to take a look at its Japanese productions. When we see that NieR Automata exceeded 5 million sales in December 2020 while the title only benefited from an AA budget, it is the jackpot for the company. And even if we do not know the exact cost of development, the director, Yoko Taro, had indicated that the developers did not have enough money to work on a significant DLC. So, if it is indeed a double A production, then we can estimate that the budget was less than 50 million dollars. Inevitably, this is a much more profitable project than a Western AAA game which is struggling to sell several million copies quickly. Moreover, in recent times, Square Enix seems to be turning to this kind of production with more reasonable budgets, often developed externally, such as Babylon’s Fall, Stranger of Paradise Final Fantasy Origin, Valkyrie Elysium etc… Thus, in the event of commercial failure, the losses are less important for the publisher, rather than a AAA on which he would have bet a lot.
Same thing with regard to the company’s mobile games which are now one of its main sources of income. Content that is all the more profitable because it costs little to maintain and relies on strong franchises like Final Fantasy, Dragon Quest, Kingdom Hearts SaGa, or even NieR. Just recently, a new mobile free-to-play from the Mana/Senken Densetsu license was launched with Echoes of Mana. And then, if Square Enix wanted to try to create new games services, it is also to try to repeat the success of Final Fantasy XIV which continues to attract new players since its redesign in 2013 and which constitutes an important source of revenue for the company thanks to its monthly subscription.
Since the acquisition of Eidos and its studios in 2009, Square Enix has attempted to release a Western AAA game every year. Despite several productions with substantial sales such as Rise of the Tomb Raider, the Japanese publisher has never really been satisfactory with the commercial reception of these titles, perhaps because of too high expectations. After an attempt in the world of service games with Marvel’s Avengers deemed disappointing, the company finally decided to stop the costs to sell its studios to Embracer to invest in artificial intelligence, the Cloud and the blockchain. A desire consistent with the words of the President of Square Enix expressed during his New Year wishes. It now remains to be seen what Embracer will do with the recently announced Tomb Raider or a possible Deus Ex 3 that has been rumored for several years.
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Par TheXsableJournalist jeuxvideo.com
