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Embracer Group acquires Eidos, Crystal Dynamics, Square Enix Montreal, and several IP

Embracer Group has made a massive acquisition of Eidos, Crystal Dynamics, Square Enix Montreal, and a bunch of IP including Tomb Raider.

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Embracer Group has acquired Square Enix Montreal, Eidos, and Crystal Dymanics and several IP including Tomb Raider for $300 million. The company is set to host a stream about the deal right now.

”We are thrilled to welcome these studios into the Embracer Group. We recognize the fantastic IP, world class creative talent, and track record of excellence that have been demonstrated time and again over the past decades. It has been a great pleasure meeting the leadership teams and discussing future plans for how they can realize their ambitions and become a great part of Embracer,” says Lars Wingefors, Co-founder and Group CEO, Embracer Group.

”Embracer is the best kept secret in gaming: a massive, decentralized collection of entrepreneurs whom we are thrilled to become a part of today. It is the perfect fit for our ambitions: make high-quality games, with great people, sustainably, and grow our existing franchises to their best versions ever. Embracer allows us to forge new partnerships across all media to maximize our franchises’ potential and live our dreams of making extraordinary entertainment,” says Phil Rogers, Square Enix America and Europe CEO.

The deal is not just for the studios, but Embracer Group has also acquired a catalogue of 50 games including Tomb Raider, Legacy of Kain, Deus Ex, and Thief.

The acquisition is expected to close as early as July of this year. Embracer Group is taking on debt to finance this deal, but they own so many amazing studios that at this point it is hard to be surprised by the size and scope of their deals. Embracer will be forking over $300 million for this deal, and adds a ton of games and studios to their conglomerate. 

A slide from the presentation that shows how Embracer funded and expects to close this deal.
A slide from the presentation that shows how Embracer funded and expects to close this deal.

Embracer Group's CEO Lars Wingefors did say that the company will continue its acqusition spree just two weeks ago, and they still have more liquidity to be able to score some more deals.

Wingefors provided a more detailed breakdown of the deal during the press conference:

  • The total purchase price amounts to $300 million on a cash and debt free basis, to be paid in full at closing
  • Acquisition includes development studios Crystal Dynamics (HQ: San Mateo, CA, US); Eidos Montreal (Montreal, CA); and Square Enix Montreal (Montreal, CA)
    • In total, represents ~1,100 employees across three studios and 8 global locations
  • Acquisition includes catalogue of iconic IPs including Tomb Raider, Deus Ex, Thief, Legacy of Kain, and others
  • More than 50 back-catalogue games
  • The transaction is subject to various regulatory and other external approvals and expected to close during the second quarter of Embracer's financial year (July-September 2022

We will be sure to add a link to the press release once Embracer Groups' website stops crashing.

Luminary

Asif Khan is the Luminary and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

From The Chatty
    • reply
      May 2, 2022 12:07 AM

      That's a lot of embracing.

    • reply
      May 2, 2022 12:13 AM

      Wowie that’s a big grab. So it’s not a squeenix subsidiary anymore?

    • reply
      May 2, 2022 12:27 AM

      Oh shit, if this means that Eidos Montreal makes the next Deus Ex game instead of farting about with Marvel wank, I'll be a happy man!

      • reply
        May 2, 2022 12:33 AM

        Let’s just hope whatever they make doesn’t end up a piece of shit like Mankind Divided.

        • reply
          May 2, 2022 12:51 AM

          Aww c'mon, DX:MD was definitely flawed, but it was far from a piece of shit. I really enjoyed my time with it, especially the DLC.

          • reply
            May 2, 2022 12:59 AM

            I always thought Square Enix was making a mistake to try and run Western studios. Some good games were produced, but mostly many good IIs languished or weren’t very well treated.

            It pains me to say it, but Squenix is just not a AAA publisher anymore. They’re better off selling off their Japanese studios and IP as well.
            😪

            • reply
              May 2, 2022 1:01 AM

              Credit where it's due, squeenix did a fantastic job with FFVII:R.

              • reply
                May 2, 2022 7:18 AM

                It took everything they had to do it. By not being AAA, I mostly mean the resources, although obviously there are management issues too at the top.

              • reply
                May 2, 2022 7:27 AM

                Eh. There's a lot of good there, but the last three hours is everything that's been wrong with FF for years and makes me far less interested in continuing.

            • reply
              May 2, 2022 1:45 AM

              I’m kinda sad that they bought the old U.K. publisher Eidos (where I worked in QA briefly ages ago) and this is what they ultimately did with its games.

              • reply
                May 2, 2022 7:30 AM

                I was shocked when they bought them.

                I’m not shocked they’ve sold them back off.

                I guess that sums it up. :(

                I’m happy Legacy of Kain finally has a chance again, at least. The Embracer studios culture could take on various IP very well, including Deus Ex, Thief, maybe even dare we say Anachronox?? I think this is one takeover that may turn out well for the future of the classic IP, for once.

                • reply
                  May 2, 2022 7:32 AM

                  I loved the Legacy of Kain games I played, although the last one very firmly wrapped it up. Also very much PS1-2 era games. It would take something special to revive without feeling dated.

                  • reply
                    May 2, 2022 7:50 AM

                    Oh seriously, the last game was a giant cliffhanger setup for me. The minute I finished Defiance, I was dreaming of the epic game of the final battle for Nosgpth and maybe even Kain finding a way to bring Raziel back to life.

                    Spoilers! 😂

                    • reply
                      May 2, 2022 7:52 AM

                      You think so? It was a long time ago that I played it!

                      • reply
                        May 2, 2022 7:54 AM

                        That was the first thought as soon as credits rolled. I’ve been seriously invested in that series from the very beginning. Fucking love the world and characters. I’ve been calling it the best series with shit gameplay for decades. ❤️

                • reply
                  May 2, 2022 8:14 AM

                  I'd be super surprised to see anyone ever give Hall money for more Anachronox.

                  Which is sad, as it's quirky scifi RPG gameplay would work really well in the modern console space.

          • reply
            May 2, 2022 8:04 AM

            So was Guardians of the Galaxy

        • reply
          May 2, 2022 3:11 AM

          It was a fantastic game. Sure, it took me, I think, four tries to finally get into it, but once I got into the flow I loved the game. I really don't get the hae as it was just like Human Revolution, just with better graphics and less piss yellow on the screen.

        • reply
          May 2, 2022 4:21 AM

          MD was a great game

    • reply
      May 2, 2022 1:27 AM

      I’m no expert but $300m seems cheap for all that talent and IP compared to other recent acquisitions.

      • reply
        May 2, 2022 3:39 AM

        Agreed, their Guardians of the Galaxy game is great but according to Square it underperformed, they clearly didn’t know how to deal with their western studios and IPs

        • reply
          May 2, 2022 4:09 AM

          Yeah. They thought licensing Marvel IP... without the movie likenesses would print money. Also insisted on F2P bullshit in The Avengers game which was clearly originally just single player. Just brain dead publisher decisions then they blame the studios on the games under-performing.

    • reply
      May 2, 2022 1:32 AM

      So square Enix just does publishing and final fantasy now? And where does embraces get the money, they’re not exactly pumping out massive hits.

      • reply
        May 2, 2022 1:34 AM

        I also wonder if Microsoft got a shot at them when they were shopped around, quite possible.

        • reply
          May 2, 2022 3:00 AM

          I'm sure they did but I expect Microsoft isn't going to move on anything until the Activision deal is done.

          • reply
            May 2, 2022 5:56 AM

            Yeah I’ve seen that comment elsewhere too, makes sense now you mention it.

            • reply
              May 2, 2022 7:53 AM

              MS financial year ends June 30. Summer Showcase is June 12th. It wouldn't surprise me if that they use the showcase to announce the deal is closed and then announce a few smaller acquisitions.

              • reply
                May 2, 2022 8:19 AM

                I think the only real hurdle left for the Activision deal are the regulatory agencies in the US and Europe approving the purchase.

                • reply
                  May 2, 2022 9:24 AM

                  did the MS board vote yet? I know the AB one did.

      • reply
        May 2, 2022 1:38 AM

        They are using debt to finance this deal.

        • reply
          May 2, 2022 1:41 AM

          That makes more sense, thanks. It’s certainly a huge play - SE has been openly critical about its western studio’s release performances for a while, yet they’re clearly capable and established dev studios, which don’t grow on trees or form quickly.

      • reply
        May 2, 2022 2:19 AM

        Square are saying the sale will allow them to invest in the blockchain, cloud and AI ... They're done.

        • reply
          May 2, 2022 3:12 AM

          Just more pandering to investors with buzzwords. Pretty laughable, surprised they missed off metaverse.

        • reply
          May 2, 2022 7:31 AM

          Maybe the AI can come up with a better RPG.

        • reply
          May 2, 2022 9:18 AM

          They thought tomb raider and guardians of the galaxy underperformed, wait till they try NFTs

    • reply
      May 2, 2022 3:04 AM

      But now who are Square going to release press releases about lower than expected sales for games that sell millions of units?

      • reply
        May 2, 2022 6:28 AM

        Sqex complains Hitman underperforms, sqex lets Io goes private, Io instantly performs, almost.... almost as if it's the sqex overhead that makes the studios not perform.

    • reply
      May 2, 2022 3:08 AM

      If so many great IPs went for this cheap I have to wonder why didn't Sony snatch it up.

      • reply
        May 2, 2022 3:16 AM

        I don't think IP's are worth what people think they're worth in general. Studios get bought because of the infrastructure/personal to produce content. Square has been criticising their Western studios for years now, you have to wonder in terms of wage structures and lack of investments how much has been leaking out of those studios.

        • reply
          May 2, 2022 3:38 AM

          To put this in perspective, Microsoft paid 100 million just for the temporary exclusivity of one Tomb Raider game.

          • reply
            May 2, 2022 3:46 AM

            Fair but the work had already been done, they're not just paying for the IP they're paying for a fully funded and produced product. Why hasn't anyone bought up Konami? They have amazing IP's but no studios to produce those IPs.

            • reply
              May 2, 2022 3:48 AM

              No idea, maybe they don’t want to sell or the price offered is not ideal to them. In the meantime they are churning pachinko machines with their IP haha.

            • reply
              May 2, 2022 10:18 AM

              Konami needs someone else in charge of their IPs for sure. So many classics.

              • reply
                May 2, 2022 10:30 AM

                While this is true from our point of view. I think gamers place more importance on IPs than what studios do. If you buy a studio just for it's IPs you then have to create a studio to developer those IPs. And studios that produce games for significant profit is what everyone is looking for.

                This is why Square Enix sold these studio's "cheap". Their profit margins are super low, even if from a gamers perspective we'd say they've produced good games. Profits were around 3% and less than 1%.

                • reply
                  May 2, 2022 10:33 AM

                  Well duh I wasn’t expecting them to just buy the IP and do nothing with it. I mean you have things like Castlevania, Contra, Metal Gear, etc.

      • reply
        May 2, 2022 7:36 AM

        Sony will probably buy the Japanese IP.

    • reply
      May 2, 2022 3:37 AM

      They always said these studios games underperformed, man one would think just Tomb Raider alone is worth a lot of money and these guys sold 3 studios plus a bunch of IPs for just 300 million.

      • reply
        May 2, 2022 6:41 AM

        I loved how they would trash respectable performances from games like Tomb Raider and Deus Ex but pour money into development hell Final Fantasy games.

    • reply
      May 2, 2022 3:46 AM

      [..] the Transaction enables [..] investments in fields including blockchain, AI, and the cloud.

      https://www.hd.square-enix.com/eng/news/pdf/20220502%20A_Press%20Release_fin.pdf

      oh dear

    • reply
      May 2, 2022 4:21 AM

      Damn, that's very very cheap

    • reply
      May 2, 2022 5:05 AM

      When devs go for Walmart bargin-bin prices, lol

      • reply
        May 2, 2022 7:44 AM

        They’re only selling 1,100 employees. Single studios have more employees than that nowadays on one project. I get the feeling many primary members of these teams already left long ago. For just the IP and back catalogue, I think that’s a medium sized price, not a bargain basement cheap price.

        It might seem cheap to us old folks, because there are some of our most beloved titles in there, but a new company would have to do some very strategic conceptualizing and budgeting to bring them back to life successfully for new audiences. It’s not an ace in the hole type of acquisition.

    • reply
      May 2, 2022 5:24 AM

      Getting all these is one billion less than what embracer spent on gearbox. And like all these studios make better games then gearbox. Impressive

    • reply
      May 2, 2022 5:27 AM

      Square Enix said the sale to Embracer "enables the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud".

      *sigh*

      FF16 is going to require NFT limit breaks, aint it?

      https://www.eurogamer.net/square-enix-sells-off-western-studios-and-ip-including-tomb-raider-and-deus-ex

    • reply
      May 2, 2022 5:46 AM

      Wow, I would have bet on Sony going after them.

    • reply
      May 2, 2022 6:06 AM

      I'm not sure how to feel about this one. It's totally possible these studios could get new life with a new owner. It could also go the other way where these IPs are exploited in a way that ain't cool. Interesting for sure.

    • reply
      May 2, 2022 6:14 AM

      Honestly, I wish MS had done this deal instead of the Activision deal. At 300 million this seems like a massive bargain. Plus you get none of the baggage.

      • reply
        May 2, 2022 6:43 AM

        Considering MS is using Crystal Dynamics to work on the new Perfect Dark I would be shocked if they weren't approached.

        That baggage is why MS is buying Activision since it depressed the price.

    • reply
      May 2, 2022 6:16 AM

      maybe they'll help square embrace making decent ports and remasters

    • reply
      May 2, 2022 6:28 AM

      *Microsoft buys embracer group for 2 billion*

      • reply
        May 2, 2022 6:40 AM

        Heh, yeah quite possible they try next year after Acti closes. Why not?

      • reply
        May 2, 2022 6:51 AM

        lol, embraced paid 1.3 billion for gearbox

    • reply
      May 2, 2022 6:39 AM

      One day we will ask, "Where were you when you were embraced?"

    • reply
      May 2, 2022 7:25 AM

      Well, at least we won't hear Square talk about how disappoint TR or DX sales are again.

      • reply
        May 2, 2022 7:36 AM

        Yeah that must have fucking stung for all the developers putting years of effort into what were usually good games.

        • reply
          May 2, 2022 7:39 AM

          Good games that often had fine or even good sales numbers.

    • reply
      May 2, 2022 9:01 AM

      <Ubisoft has entered the Chatty>

    • reply
      May 2, 2022 9:28 AM

      Dang. I thought they would be scooping up Ubisoft. Perhaps they still will.

      • reply
        May 2, 2022 1:01 PM

        Ubisoft is going to be many billions. Their Montreal studio along is thousands of devs, and they have studios all over the world seemingly mostly dedicated to Assassin's Creed games

    • reply
      May 2, 2022 9:59 AM

      hopefully someone over at Embracer likes Deus Ex as much as I do.

    • reply
      May 2, 2022 9:59 AM

      Soul reaver remaster!

      • reply
        May 2, 2022 5:41 PM

        I look forward to playing a new Soul Reaver and Thief game with my first Social Security check.

    • reply
      May 2, 2022 10:02 AM

      Surprisingly cheap?

    • reply
      May 2, 2022 1:08 PM

      https://www.youtube.com/watch?v=z-BkrwO_Dck sheeeeeeesh!!!!!!!!!!!!!!! This is massive news and positive news, I really hope the IPs are in a safer overlord now that will take care of them, let them grow and protect and love them \m/ :) \m/!!!!!!!!!!!!!!!!!!!!!!!!!!

      Bring on the new Deus Ex open world!!!!!!!!!!!!!!!!!!!!!!!!!!!! + keep those rad Tomb Raider games flowing!!!!!!!!!!!!!!!!!!

    • reply
      May 2, 2022 4:44 PM

      Bring back some of the 3do classics!

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