Tomb Raider, Deus Ex, Marvel … Square Enix’s complicated relationship with its western studios

Play news Tomb Raider, Deus Ex, Marvel … Square Enix’s complicated relationship with its western studios

On Monday, May 2, we were told that Square Enix sold its western studios, including Eidos, Crystal Dynamics and Eidos Montreal, to the Swedish group Embracer. On this occasion, the JV editorial staff invites you to take a look back at this tumultuous decade between the Japanese publishing house and its Western productions, which are considered “disappointing”.

Summary

  • A desire to open up a new market
  • A tumultuous decade for Square Enix
  • Too high expectations from the Japanese publisher?

This beginning of the year 2022 is certainly put 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 disrupt the video game sector. While the month of May has just begun, new information has once again changed the video game landscape. Thus, on Monday, May 2nd Square Enix announced that they had sold Eidos Montreal, Crystal Dynamics and Square Enix Montreal to the Swedish group Embracer for $ 300 million.. The deal is expected to close this summer.

A desire to open up a new market

Tomb Raider, Deus Ex, Marvel ... Square Enix's complicated relationship with its western studios

If the announcement had the effect of a small earthquake in the world of video games, it is also for the volume of this sale. $ 300 million for three studios with 1,100 employees and more than fifty licenses, it does not work out much., especially for prestigious franchises like Tomb Raider, Deus Ex, Legacy of Cain, Thief, Sleeping Dogs … This is all the more so when we compare these numbers with other acquisitions such as. Insomniac (Marvel’s Spider-Man, Ratchet) & Clank: Rift Apart …) by Sony in 2019 for 229 million or the $ 1.3 billion spent by the Embracer Group to get their fingers in Gearbox (Borderlands 3, Tiny Tina’s Wonderlands. ..). On the one hand, we must remember that Eidos and Crystal Dynamics have gone through some rather complicated times over the last decade.

Tomb Raider, Deus Ex, Marvel ... Square Enix's complicated relationship with its western studios

If we go back in time, it was in 2009 that Square Enix invested in Western development studies 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, the publisher described the sale as “favorable results”. Unfortunately, it is from the next game that it starts to go wrong. In 2012, it was IO Interactive’s turn to launch Hitman Absolution, which was a disappointment for Square Enix, as the title only sold 3.6 million copies per year. March 26, 2013, which is below original expectations. The same year after with Tomb Raider (2013), which sold 3.4 million copies worldwide, the franchise’s highest sales record, but which did not reach the goals the company had set.

A tumultuous decade for Square Enix

Tomb Raider, Deus Ex, Marvel ... Square Enix's complicated relationship with its western studios

The following years will improve, as Thief in 2014 will have a “favorable” sale despite its poor critical reception, while Rise of the Tomb Raider, launched in 2015, will perform very well because the commercial success of the game will be considered satisfactory by Square Enix. In addition to releasing Lara Croft’s new adventures, Microsoft also spent $ 100 million on making the title an Xbox exclusive for a year.. A sum that puts things in perspective when looking at Embracer Group’s takeover of these studies. Unfortunately, the following projects will have a harder time establishing themselves in the video game landscape. Whether it’s Hitman and its episodic formula or Deus Ex: Mankind Divided, the year 2016 will be considered disappointing for the Japanese publisher on the side of its western productions. If Shadow of the Tomb Raider manages to raise the bar with its more than four million copies sold by the end of 2018, the 2020s and the realization of the collaboration with Marvel will not have the expected effect.

Tomb Raider, Deus Ex, Marvel ... Square Enix's complicated relationship with its western studios

With Marvel’s Avengers launching in September 2020, Square Enix is ​​trying out western-like gaming services with a huge license to support its initiative. Unfortunately, the studio behind the project, Crystal Dynamics, does not specialize in this kind of productions. As a result, the title comes out in a complicated state and largely lacks content at launch, despite an effective main campaign and gameplay.. If a year and a half later the game is still in use, it still suffers 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 the sale of the game”was smaller 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 get the sale, which is considered disappointing by Square Enix.. Fortunately, the title has recently been the subject of a strong resurgence of public interest thanks to its release in the Xbox Game Pass.

Too high expectations from the Japanese publisher?

Tomb Raider, Deus Ex, Marvel ... Square Enix's complicated relationship with its western studios

After this little story, you will have understood that Square Enix never seems to be really happy with the sales of their western games. One of the reasons why this reaction can be explained is first and foremost the great hopes that the Japanese publishing house places in its western productions.. As evidence, Yosuke Matsuda, president of Square Enix since June 2013, even admitted that for Tomb Raider (2013), the company’s expectations were “extremely high“After reading that the sales of Western games are disappointing, players have become accustomed to the Japanese publisher never being happy with these titles. In this sense, the acquisition of Eidos, Crystal Dynamics and Square Enix Montreal by Embracer Group is not so surprising as this is also what happened to IO Interactive in 2017. After the disappointing results of Hitman (2016), Square Enix decides to part with the Danish studio, which is then bought by its executives to become independently, retain license rights and produce Hitman 2.

Tomb Raider, Deus Ex, Marvel ... Square Enix's complicated relationship with its western studios

To understand why Square Enix’s expectations are so high for its western game, 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 although we do not know the exact cost of the development, the director, Yoko Taro, had indicated that the developers did not have enough money to work on a significant DLC. So if it really is a double A production, then we can estimate that the budget was less than $ 50 million. This is inevitably a much more profitable project than a western AAA game that is struggling to sell several million copies quickly. Moreover, in more recent terms, Square Enix seems to be turning to this kind of production with more sensible budgets, often developed externally, such as Babylon’s Fall, Stranger of Paradise Final Fantasy Origin, Valkyrie Elysium etc … Thus, in case of commercial failure, the losses are less important to the publisher, rather than a AAA on which he would have relied heavily.

Tomb Raider, Deus Ex, Marvel ... Square Enix's complicated relationship with its western studios

The same with regard to the company’s mobile game, which is now one of its main sources of revenue. Content that is so much 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. Only recently was a new mobile free to play from the Mana / Senken Densetsu license launched with Echoes of Mana. And so, if Square Enix would try to create new service games, it is also trying to replicate the success of Final Fantasy XIV, which has continued to attract new players since its redesign in 2013, and which is a source of important revenue for the company thanks to its monthly subscription.

Since the acquisition of Eidos and its studios in 2009, Square Enix has been trying to release a Western AAA game every year. Despite numerous productions with significant sales such as Rise of the Tomb Raider, the Japanese publisher has never really been satisfied with the commercial reception of these titles, perhaps due to too high expectations. After an attempt in the service game world with Marvel’s Avengers, which was considered disappointing, the company finally decided to stop the cost of selling its studios to Embracer to invest in artificial intelligence, the cloud and the blockchain. A wish in accordance with the words of the President of Square Enix expressed during his New Year’s wishes. It’s now back to see 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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