It looks as though Square Enix isn’t quite done with reshaping its portfolio of development studios just yet. According to a conference call held today and reported on in VGC, the publisher has been discussing its latest financial results. In turn, industry analyst David Gibson has shared some insight into the publisher’s current situation and likely future plans.
In Gibson’s view, the financial call confirmed that the surprise sale of a substantial chunk of Square Enix’s Western development studios earlier in the year “was driven by concerns that the titles cannibalized sales of the rest of the group and so it could improve capital efficiency.” Essentially this move formed the first part of a two-pronged plan, the second part of which will be to review its current portfolio of studios. This will be done to realign Square Enix’s current state of operations with the publisher’s desire to concentrate its resources more fully on its Japanese studios, as opposed to those developing games in Europe and the US.
Gibson also explains that this move is in line with the publisher’s need to be more efficient with its resources, thanks to the rising costs of game development across the board. Bringing things further in-house or at the very least, closer to home, is one way of improving spending efficiency and potentially keeping development costs down for Square Enix. In terms of where the prospective shares may end up, Gibson suggests that companies such as Chinese gaming giant Tencent and of course Sony would be the most likely parties to want to snap up Square Enix’s outgoing studio stakes.
Square Enix is clearly on a roll with its plan to follow a different direction in terms of its future development and publishing goals. We’ll just have to wait and see how its plan to sell stakes in its remaining Western development studios pans out.