5 questions for Embracer's Square Enix studio acquisitions

Embracer Group shook up the gaming world with its purchase of Eidos, Crystal Dynamics, and Square Enix Montreal and we naturally have some questions we'd like to ask.


The week has just begun, but the video game world has already experienced a seismic shift. Square Enix appears to have mostly bowed out of Western gaming on Sunday night with the sudden announcement that Embracer Group AB has purchased a bulk of the publisher's North American studios and their catalog of IPs. That's over 50 IPs that have now shifted from Square to Embracer. The immediate question that comes to mind is, what does this all mean?

That's a loaded question. What does the Embracer Group acquisition of Eidos, Crystal Dynamics, and Square Enix Montreal mean for gaming? What does it mean for the consumer? There's a lot to break down, but here are a few immediate questions that come to mind.

1. Is Square Enix done with North American gaming studios?

Let's look at what exactly the Embracer Group has purchased. According to the announcement on the Embracer Group website, the publisher has officially come to terms on the purchase of Crystal Dynamics, Eidos Montreal, and Square Enix Montreal. That's pretty much the entirety of Square's North American presence, though it should be noted that Square is still working with Deck Nine Games, the main architects of the Life is Strange series.

It's one thing to sell off studios that Square considered to be underperforming (put a pin in that idea, by the way, because we'll be visiting that one a lot), but it's that Square also sold off all of the IPs within those studios. They could have easily held on to Tomb Raider, Deus Ex, Thief, and however many other properties had been developed by the North American development teams. They could have maybe passed along Tomb Raider to Luminous Studios whenever they get done with Forspoken or seen what one of the other Japanese studios could have done with something like Deus Ex. The fact that Square washed its hands of most of its North American studios and their IPs is a big indicator that they don't want to dive any deeper into Western gaming.

That's probably a win-win for everybody. Square Enix still has a lot of games coming down the pipe in 2022, including the aforementioned Forspoken, The Diofield Chronicle, and Valkyrie Elysium, just to name a few examples. Final Fantasy 16 is allegedly almost finished. An entirely new chapter of Kingdom Hearts is in development. Oh, there's also the matter of Final Fantasy 7 Remake, which still has more than a few chapters left to go. Nobody cry for Square. They'll be just fine.

More than anything, this is a chance for these North American studios to breathe a sigh of relief. They don't have to worry about releasing something like Tomb Raider, Deus Ex, or Marvel's Guardians of the Galaxy to critical and consumer acclaim, only for the perfectionist parents at Square Enix Japan to whip their riding crops and publicly bellow about underperforming sales. These studios are in new hands now with Embracer. Now let's see what they can do with this new start, one that may likely include an all-new Deus Ex.

2. What does this mean for Square Enix's Marvel catalog?

There are two big Marvel-based titles under the Square Enix umbrella: Marvel's Avengers and Marvel's Guardians of the Galaxy. It is no secret that Square Enix all but washed their hands of these games due to what they cited as disappointing revenue numbers, most recently stating that Marvel's Guardians of the Galaxy missed sales targets. However, there's now new ownership at Eidos Montreal and Crystal Dynamics. What does mean for these games' potential futures?

The Embracer Group post-conference call Q&A danced around any Marvel questions, so there was nothing to get from there. With that said, this is where it should be noted that the titles featuring these characters were licensed out by Marvel. If approached by Marvel down the road, would Square Enix have wanted to give these licenses another shot? Clearly, past rhetoric indicated that Square had its fill of superheroes. However, this is an entirely new scenario for Embracer Group.

Every publisher has different standards and what amounts to disappointing revenue to Square could be a resounding success to Embracer. With that in mind, the odds for Marvel's Guardians of the Galaxy getting a sequel are suddenly much better than they were a week ago. This is especially true with the game finding a new audience on Xbox Game Pass.

As for Marvel's Avengers, that's a much more complicated question. Crystal Dynamics proved to be in over its head with the game's various launch issues and initial reviews from consumers and critics alike. The studio had a grand plan for post-launch support, but that hasn't panned out, for the most part. Crystal Dynamics certainly hasn't given up, recently teasing Jane Foster's Thor for the game's 2.5 update later this year. Whether Embracer Group wants to pick up the ball and run with it or quietly let Marvel's Avengers limp into the sunset will be a story worth watching.

3. What happens to Outriders?

We certainly know what Square Enix has lost, but what does this mean for the non-Japanese titles still under its purview? There's a big one still out there and it's Outriders. Outriders was not developed by Square's North American studios, but it also wasn't put together by Square's Japanese developers. This was put together by People Can Fly and when it first launched, it got something that the North American studios never really got: praise from Japan. Yes, Square was so happy with Outriders that it went so far as to call it the company's next major franchise.

Since then, Outriders has been mostly out of sight, out of a lot of minds. The video game globe kept on turning and chatter about Outriders largely died out. That doesn't mean the party's over, though. People Can Fly has a full-blown Worldslayer expansion ready to roll out in June, coming on the heels of some major free updates that have revamped how the game is played.

The Outriders topic comes up because it feels like a sort of antithesis to Marvel's Avengers. People Can Fly weathered a rocky launch, laid out a roadmap, largely stuck to it, and the game seems to be trending upwards. While Square looks like it will mostly operate with its Japanese developers going forward, People Can Fly could prove to be an exception and an Outriders 2 may very well be a possibility in the distant future.

4. What does this mean for Square Enix Montreal's mobile catalog?

The most obvious change here is that Square Enix Montreal, the architects of some outstanding mobile games, will probably have to change its name.

All jokes aside, Square Enix Montreal has been an unsung hero for years, developing some wildly engaging mobile titles based on some of the most recognizable franchises from Square's Western catalog. The Hitman games (Hitman GO and Hitman Sniper, specifically) have been a breath of fresh air, showing the potential for mobile gaming as a satisfying experience at a relatively low cost.

During the Embracer call, Square Enix Montreal Studio Head Patrick Naud noted that the team was looking to dive further into free-to-play titles based on its AAA portfolio and would release a new batch of games later in 2022. It does not appear that Embracer will get in the way of the studio's vision, so the best way to sum this up is that Square Enix Montreal (whatever name it takes on) will operate as usual.

5. What other IPs could be revived under Embracer Group?

Let's end on a fun question. Square Enix has been sitting on a massive catalog of dormant IPs. Embracer Group has just picked up over 50 of them and has promised "new installments of beloved franchises." Beyond a new Tomb Raider and teases for Deus Ex's future, little is known about what Embracer could want to bring back.

Embracer has not put out a full list of what new IPs it now owns. The only ones listed by name have been Tomb Raider, Deus Ex, Thief, and Legacy of Kain. However, this list may very well extend beyond games developed by the purchased studios. I'm talking about games like Sleeping Dogs, which Square clearly never had any further intention of using.

Square has not named what non-Japanese IPs it has retained with the exception of Life is Strange, Outriders, and Just Cause. Because of that, the answer to this question is largely up in the air. However, this is where it should be noted that whatever IPs Embracer has picked up, there are a lot of studios that could be freed up to work on any of them. Embracer's subsidiaries include Gearbox, THQ Nordic, Koch Media, and more. There's a possibility that a game you never expected to see again (maybe Sleeping Dogs, maybe not Sleeping Dogs) might suddenly get a new lease on life. After all, Embracer didn't buy dozens of franchises in bulk with the intention of letting them collect more dust. Many of these IPs are going to come back and they may come back in a big way.

We're just getting started on what all of this means for the future of gaming. What does Embracer have planned for Eidos, Crystal Dynamics, and Square Enix Montreal in the future? We're excited to find out and we'll be watching this story unfold here at Shacknews.

Senior Editor

Ozzie has been playing video games since picking up his first NES controller at age 5. He has been into games ever since, only briefly stepping away during his college years. But he was pulled back in after spending years in QA circles for both THQ and Activision, mostly spending time helping to push forward the Guitar Hero series at its peak. Ozzie has become a big fan of platformers, puzzle games, shooters, and RPGs, just to name a few genres, but he’s also a huge sucker for anything with a good, compelling narrative behind it. Because what are video games if you can't enjoy a good story with a fresh Cherry Coke?

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