Square Enix Says Selling Embracer Will Help It Fund Its Blockchain Investment

Square Enix has shed some light on its decision to sell its Western game development studios and IPs to Embracer Group, as the Japanese company says the deal will further help it invest in blockchain and other technologies.

The deal – which is valued at $300 million – will see Crystal Dynamics, Eidos-Montreal and Square Enix Montreal also join Embracer Group’s portfolio of studios. Sale IPs include Tomb Raider, Two Ex, and Legacy of Kain, among others.

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“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 improve the value of the company by accelerating the growth of the company’s core businesses. in digital entertainment,” said Square Enix. in an official statement via Business Wire.

In addition to investing in blockchain, Square Enix also plans to explore areas of AI and cloud, a move it says aims to optimize its business structure as part of a medium-term business strategy. unveiled last year.

Square Enix President Yosuke Matsuda last month expressed interest in creating more blockchain games with play-to-win elements, as he explained that the traditional video game business model would not be enough to ensure the future of business. In a letter, Matsuda wrote of his belief that blockchain games “have the potential to enable autonomous growth of gaming” by pushing the concept of play-to-win further.

“I realize that some people who ‘play for fun’ and currently form the majority of gamers have expressed reservations about these new trends, and that’s understandable,” Matsuda explained. “However, I believe there will be a number of people whose motivation will be to ‘play to contribute’, by which I mean to help make the game more exciting.”

It’s worth noting that Square Enix has seen massive growth from its Japanese studios that have created MMOs and mobile games, areas where blockchain, cloud, and AI technology have proven particularly useful. While its Western studios generated corporate profits, Square Enix generally viewed these returns as disappointing relative to the costs of running these groups and funding the games.

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