The sale announced Monday includes Crystal Dynamics, Eidos-Montreal and Square Enix Montreal studios, affects 1,100 employees.

Japanese video game company Square Enix will reduce its developer presence in the West with the sale of the studios behind the Tomb Raider, Deux Ex and Thief franchises to Swedish group Embracer for $300 million.

Square Enix Holdings Co., Ltd. announced on May 2 that it has signed a share transfer agreement with Embracer Group AB in Sweden regarding the sale of the group’s overseas studios and some IPs.

This time, “CRYSTAL DYNAMICS, INC.” And “EIDOS INTERACTIVE CORP” were transferred to Embracer Group AB. Along with this, IPs such as “TOMB RAIDER” series, “Deus Ex” series, “Thief” series, and “Legacy of Kain” series will also change. Square Enix has been actively localizing and selling these overseas studio development titles, but this transfer of shares will significantly change these overseas sales strategies.

The IPs of the “JUST CAUSE” series, “OUTRIDERS”, “Life is Strange” series, etc., which were developed mainly by other overseas studios, continue to belong to the Square Enix Group.

The purpose of this transfer of shares is to create a global business environment surrounding the Group based on the “optimization of business structure,” which is the business policy of the medium-term business strategy announced by the Square Enix Group on May 13, 2021. It is said that it is to allocate management resources more efficiently and accelerate the growth of core businesses and the launch of new businesses in preparation for major changes.

The Square Enix Group will review its business portfolio, further promote selection and concentration in the digital entertainment business area, realize further growth, promote investment in the areas of blockchain, AI, and cloud, and launch new businesses. I will accelerate it. With this contract as an opportunity, the overseas publishing function will be reorganized to review the current governance system and report line and promote group integrated management.

The latest in a series of video game industry deals, the sale announced Monday includes Crystal Dynamics, Eidos-Montreal and Square Enix Montreal studios, affects 1,100 employees and is expected to close in the July-September quarter. .

Square Enix, whose main franchises include Final Fantasy and Dragon Quest, said the proceeds will be used to invest in areas such as blockchain, artificial intelligence and the cloud.

The Tokyo-based company said last year that it was reviewing its portfolio to adapt to industry trends such as a focus on the metaverse, or the idea that consumers will spend more time in virtual worlds.

Embracer, which has a reputation for acquisitions and has a fund of 10 billion Swedish kronor ($1.02 billion), said the deal will give it a portfolio of more than 230 games, including 30 big-budget AAA titles.

“Embracer is gaming’s best kept secret: a massive, decentralized collection of entrepreneurs that we’re thrilled to be a part of today,” Square Enix America and Europe CEO Phil Rogers said in a statement.

The valuation of assets, including the long-running Tomb Raider series that has sold 88 million units and spawned a Hollywood franchise with its portrayal of archaeologist Lara Croft, surprised some industry watchers.

The price reflects “limited competition for asset acquisition, perhaps suggesting some post-pandemic softness in valuations in certain segments,” said Piers Harding-Rolls, head of gaming research at Ampere Analysis.

“Interest will be dampened by a lack of live service experience,” added Harding-Rolls, referring to games that offer continuous, up-to-date gameplay.

Titles like “Tomb Raider” are primarily single-player, and the best games of recent years can require an investment comparable to big-budget movie productions.