Two unnamed intermediaries made headlines yesterday when they spoke with CTFN, a Connecticut-based news outfit, and revealed the bombshell of the year: famed game developer Square Enix is selling their company and several buyers have already expressed interest. Bloomberg Japan covered the scoop and the news practically circulated overnight. Gamers decried the sudden change in management and speculated on the identities of the buyers. Many assumed Microsoft and Chinese tech company Tencent are involved. And why wouldn’t they? No executive worth his salt would shy away from appropriating a major conglomerate like Square Enix — or in this case, any of its corresponding assets — should the opportunity present itself. And any video game company up for grabs is easily worth procuring. Plus, the news originated from a reliable source. CTFN is the proverbial authority when it comes to anything M&A (mergers and acquisitions) and is tried and trusted in the industry for its relatively on-the-nose reportings. Not this time, though.
Square Enix was quick to debunk the rumors, and posted an official response the same day. Yosuke Matsuda, president and representative director of Square Enix, writes: “Bloomberg has reported today that there is interest from several buyers to acquire Square Enix. However, this report is not based on any announcement by SQUARE ENIX HOLDINGS CO., LTD. We do not consider selling off the company or any part of its businesses, nor have we received any offer from any third party to acquire the company or any part of its businesses.” Square Enix’s shares skyrocketed overnight — a staggering 1.3% increase — as investors drew up plans to annex the video game behemoth for themselves. The pandemic has done little to slow the company down last year, with profits up by 46.3% during its first quarter. Square Enix’s digital gaming division accounted for 72% of total sales in the last half of its fiscal year, which probably explains why the bankers had previously reported the game department to be up for sale.
Square Enix is responsible for several hit franchises, having developed Final Fantasy, Dragon Quest, and Kingdom Hearts, and is widely regarded as the godfather of Japanese role-playing games. The company has a long and storied history, with several regional units worldwide. It branched out into arcade gaming when it acquired Taito in 2005 and action-adventures when it purchased Eidos Interactive in 2009. Both mergers led to a greater variety of genres, including Tomb Raider, Deus Ex, Hitman, Thief, and Just Cause. Square Enix also came close to buying Tecmo, best known for Ninja Gaiden, Dead or Alive, and Fatal Frame, but the latter rejected the takeover. Suffice it to say, when it comes to acquisitions, it’s Square Enix that does the procuring, not the other way around. The company also sells popular merchandise and publishes manga under its subsidiary, Gangan Comics.
With two sequels, an original, and one remaster on the way, 2021 is a big year for Square Enix. The sequel to the Nintendo DS classic The World Ends With You, titled Neo: The World Ends With You, will be made available on the PlayStation 4, Nintendo Switch, and PC on July 27. Bravely Default II already released worldwide on the Nintendo Switch last February. Same goes for Balan Wonderworld and the SaGa Frontier remaster, which came out March 26 and April 15, respectively. Four games are already in production — Babylon’s Fall, Final Fantasy XVI, Forspoken, and Project Triangle Strategy — with a 2022 release date.