Square Enix to create new studios after selling its old ones

Tomb Raider box art
Embracer is buying the studios behind Tomb Raider and Deus Ex for $300 million (pic: Square Enix)

The latest financial results for Square Enix give insight to its plans, including making new studios to replace the ones it’s selling.

It’s only been over a week since Square Enix announced that it will be selling its Western studios to Embracer Group, and yet it’s already talking about establishing entirely new studios in their place.

As part of its financial results for the recent fiscal year, Square Enix talks about its future business strategy. Aside from cultivating its franchises and creating new ones, it wants to ‘boost game development capabilities by establishing new studios.’

It doesn’t specify where any prospective studios would be based, but it would be odd to establish new studios in the West when it just sold the ones it had because they weren’t making enough money.

Crystal Dynamics’ Avengers live-service game has routinely struggled since it launched in 2020 and even Square Enix has described it as a disappointment.

Eidos Montréal’s Guardians Of The Galaxy game fared far better critically and was a hit with players, but Square Enix says it underperformed at launch.

In fact, sales of premium releases like Guardians Of The Galaxy and Nier Replicant declined compared to the previous fiscal year, according to this financial report.

On the flip side, its online multiplayer title Final Fantasy 14 has only been more successful thanks to the release of the Endwalker expansion and a rise in monthly subscribers.

Square Enix’s results also reiterate its commitment to blockchain games and NFTs despite the backlash from its audience. However, according to analyst David Gibson, the company explained in a results call that it would not be funding its NFT plans with the money it will make from selling Crystal Dynamics and Eidos Montréal.

This is despite the fact the original announcement said the sale would help Square Enix enable ‘the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud.’

In that same results call, the company added that it will be focusing particularly on the Final Fantasy franchise, since this year marks its 35th anniversary, and will have news to share in the coming months.

No doubt it’s referring to Final Fantasy 16, which is apparently close to completion. Fans suspect it could release by the end of this year and Square Enix has admitted that a new trailer for it exists.

It didn’t say when the public will get to see it, only that it has high expectations for the game.

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