A week after selling its Western studios, Square Enix says it will establish or buy new ones | VGC
The company further explained its reasoning behind the studio sales…
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VGC: "A week after selling its Western studios, Square Enix says it will establish or buy new ones"
- Thread starter AuthenticM
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I mean I don't know why this is such a big deal. They want studios that actually make money for them. Their western studios weren't making money.
Nailed it. With SE's current output they're definitely looking at small-sized studios rather than juggernauts like Crystal Dynamics and Eidos.
I think mostly because they originally said it was to build up their Japanese devs and then invest into the blockchain. Following the whole NFT crypto crash thing going on, this seems like a backdown. May not be how it actually played out but I think that's the narrative people are reacting to.
It's not. Most people don't read past the headline, leading to a severe lack of nuanced discussion on almost every topic.
I think the point still stands. They sold them because they didn't manage them well but turned right around and went "well maybe these other studios will be better" with what seems wasn't much self reflection.
Reminds me a lot of Capcom dumping Capcom
Vancouver and not thinking "maybe we failed them more than they did us"
I think consolidating to something smaller they can handle is fine but it still feels a bit odd when it's so clear cut. But who knows, CD is probably in better hands without square anyway.
yea as they are probably trying to focus their energy and investment in Japan instead of Western studios this time.
Probably be looking for smaller scale stuff, so not surprising really. They just freed up a lot of their budget.
all those people probably would have had to be relocated, which isn't an option for a lot of them
It's less about "managing them well" and more that Crystal Dynamics was, and still is, a cash black hole that was never going to turn a profit. They weren't making money as a single player developer and they bombed horribly at making live services. They've got no way to win, short of packing up and moving the entire company someplace where the cost of living isn't astronomical.
Square is trying to refocus on Japanese games and developers, which is in line with the CEO's comments about Japanese devs not needing to copy western devs. These new studios will be in Japan which will make them easier to manage and operate more in line with how square wants to make games.
It's not at all. We saw how much demand there was for those studios, clearly Square wasn't the only one who saw them as a risky investment going forward.
I don't think the problem was Square's management, they gave the studios big budgets and a huge license, but they didn't made money back
Unless there are devs saying something about Square I'm not aware of
Obsidian is what I would consider a medium - big studio and they are releasing 7 projects over 7 years. They just aren't trying to chase every trend and are making interesting things that don't need big open worlds or hundreds of hours
It's like everyone forgot the AA bangers of gen7
Right. They had a studio developing games in a franchise that was averaging about 13M copies sold per game (Tomb Raider) but they couldn't manage it to make that profitable. I fail to see how any new studios would change that. If you can't make money on sales like that, you've got a management problem.
Obsidian almost died multiple times and was basically living project to project before Microsoft bought them.
Or you have a studio making games in a city where the cost of living is too high to justify the kind of work you're doing.
I get this feeling they're gonna focus on acquiring mobile game developers. Or something like that.
Gotta make the money somehow.
Gotta make the money somehow.
Montreal is the biggest game dev hub in Canada, if smaller and indipendent studios can have dozens of employees there while Square Enix Europe is struggling it has more to do with the Management at the top than "expensive city" and on top of this the Montreal government provides extensive tax cuts to videogame developers.
They've been saying this about the western studios for years, even when they usually made money, it was always below expectations.
Never heard a peep about Balan Wonderworld though, legitimate trash fire game.
Seems like if the west studios aren't making FF money they're "underperforming"
I can see this blowing up in their face like it does with other companies that recklessly buy out other smaller studios, like EA. Big companies predicate their success not on individual dollars made but by GROWTH. That's often why many corrupt large companies in the VG industry go for an "ALL THE MONEY IN THE WORLD OR BUST" mentality. Stock traders don't want to see their investment pay off, but to see it continue to pay off in bigger amounts constantly.
So what will likely happen is that SE will get small studio that make small success, then will be incensed to make them grow because that will make them MORE money surely! But critical mass of game development will hit them like a truck and they will start to see these companies as failures for not producing even LARGER finances constantly and either axe them (like EA) or sell them off, like Crystal D and Eidos... AGAIN
Look at Crystal Dynamics' actual financials. They were BARELY breaking even year to year, with zero growth.
If they keep the same executives behind the latest 10 years of fuck-ups at Square Enix Europe they are going to fail another time.
Maybe I'm the only one looking at this differently but just because they want to acquire or establish western studios doesn't mean they want to try ALL OF THAT STUFF they did with their recently sold studios again.
For all we know they want to establish roots in the west and have those companies make titles for their existing IP's. Think: a GaaS action RPG in the FF universe but made by a western studio that understands that target demographic instead of taking wild stabs at the genre to some degree of failure via Eastern studios, despite Platinum helping.
I just don't think they're trying to trade their car in for a new one just like it. I think they maybe realize Eidos and CD just weren't good fits and maybe instead they should focus on that more, or use western studios for different projects? Spread themselves less thin when it comes to IP's?
For all we know they want to establish roots in the west and have those companies make titles for their existing IP's. Think: a GaaS action RPG in the FF universe but made by a western studio that understands that target demographic instead of taking wild stabs at the genre to some degree of failure via Eastern studios, despite Platinum helping.
I just don't think they're trying to trade their car in for a new one just like it. I think they maybe realize Eidos and CD just weren't good fits and maybe instead they should focus on that more, or use western studios for different projects? Spread themselves less thin when it comes to IP's?
If the new studios are established in Japan they might have an easier time managing them. They could also build the studio from the ground up to be inline with their plans. Its probably easier build a studio from scratch that is focused on making live service games than to take a studio that has only ever made single player games and get them to make one.
Look at the financials. Even when their games did well, they were below expectations because the studio cost so much money to run year to year.
Balan Wonderwhatever probably cost less to develop than Eidos and CD's building rent.
With 300 million big ones why not? Probably open up a dozen. Just so long as they're having fun, that's what's most important.
To be fair, Balan's budget was probably very low compared to games like Tomb Raider, Avengers or Guardians. Square's problem was always that they expected their western studios to replicate the success of, say, Sony's recent games or even higher considering they likely spend even more on them than Sony does. Shadow of the Tomb Raider cost between $110-135 million to produce, apparently.
Yeah when you look at that way, kinda makes sense why Square wanted them to work with a popular IP and a more profitable game structure (GaaS). As a way to move the studio toward profitability, it seems like an okay idea on paper even though it didn't pan out.
Sony gets a much larger cut from their games and can afford to subsidize them a bit for the sake of the larger platform. So SE games probably have to sell a lot better than Sony games just to match their financial performance.
I think SE just expect them to make some profit .
When you look at there financials they were not making money for years .
Plus ASP matter your game selling a few million but at $10 not as usefull as game selling less but at a higher ASP like $40
Absolutely. Square also can't bundle their games the way Sony can or use them to help boost their subscriptions. Add an even bigger budget and their expectations were always sky-high.
Yeah, that's true too. David Gibson said that both Avengers and Guardians were big money losers and both underperformed significantly.
I mean that does make sense except you end up in the same boat Microsoft is in now with 343i and that Square was in with CD. You have a studio that doesn't know how to do GAAS and you throw them to the wolves and expect them to pull magic out of their ass, and when they don't (in Square's case at least) you run them over with the worlds largest bus.