Square Enix Worth - Can Sony, Microsoft Buy The Final Fantasy Devs? Acquisition Scenarios Explained (UPDATED)
UPDATE: Square Enix denied the M&A interest rumors with an official statement. Original story below.
On April 16 early morning JST, CTFN published a report mentioning Square Enix has received Merger&Acquisition interest, the CTFN report was also cited by Bloomberg Japan (Thanks, Yahoo Japan), the Square Enix stock worth at the Tokyo Stock Exchange has been increasing rapidly, showing the market definitely bought into these M&A rumors, and “スクエニ買収” “Square Enix acquisition” is trending in Japan. Which company could buy Square Enix, and is it possible for a non-Japanese company like Microsoft or Tencent to do it?
Square Enix or Square Enix Holdings?
According to the reports, it’s unclear whether the possible M&A deals concern Square Enix, or Square Enix Holdings as a whole. This is a very important detail.
Because it’s crucial to note that like many other Japanese brands such as Sega or Konami, games are ultimately only one of the many sectors Square Enix Hodlings operates in. With its subsidiary Square Enix.
Square Enix Holdings as a whole isn’t a games company, but an Entertainment company. This points out to video games, but also mobile, arcades, cloud gaming, or manga.
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Square Enix and manga
Square Enix has its own manga editing house, Gangan, which is one of the biggest in Japan right after mastodon like Shueisha and Kodansha. Through Gangan, Square Enix published popular manga titles such as Full Metal Alchemist, Seto no Hanayome, Soul Eater, Goblin Slayer. High Score Girl, The Apothecary Diaries, or Eiyuu Kyoushitsu. Manga adaptations of all Square Enix games, like the Kingdom Hearts series, are published by Gangan too.
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Worth, analyzing who could buy the Final Fantasy devs
According to Bloomberg, Square Enix’ digital entertainment business accounted to 72% of its total sales at the end of the fiscal year of March 2020. And that while mobile is a huge part of Square Enix, and that the mobile market is huge, its growth is currently decelerating. Lastly, the Covid-19 pandemic has obviously affected Square Enix in 2020 as well. Lastly, Square Enix has a net worth of $1.3 billion.
Taking all the above into account, if Square Enix Holdings as a whole is under Merge&Acquisition talks, it’s very likely to be acquired by another Japanese company such as Sony.
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Sure, Square Enix Holdings doesn’t own a casino in South Korea like Sega, or tons of gyms in Japan like Konami. But it still seems legally nearly impossible to me for a non-Japanese company like Microsoft to take over Square Enix Holdings as a whole, from arcades to manga. If Square Enix alone, the video games section, is sold though, that’s another story.
Right now, Square Enix is working on Final Fantasy 7 Remake Intergrade, along with several other projects, including Final Fantasy XVI, FF7 Remake Part 2, The NieR Replicant remaster, or Dragon Quest games.