For many, the purchase of Crystal Dynamics, Eidos Montréal and Square Enix Montreal by the Embracer Group was something totally unexpected, but for others, the real surprise was seeing that these three studios were acquired for only $300 million dollars. Although at the moment it is unknown why this “so low” price was chosen, an analyst reveals various reasons for this.
Considering that the latest studio purchases in the video game industry have run into the billions of dollars, many were surprised to learn that three studios and several famous properties were sold for $300 million. In this regard, Daniel Ahmad, an analyst at Niko Partners, mentioned that this is due to the fact that these teams have had a lower than expected commercial performance. This was what was said about it:
“For reference, Crystal Dynamics has posted a 3.6% profit margin in 2021, while Eidos Montreal has posted a 0.65% profit margin in 2021. Square Enix as a whole had a 14.2% revenue margin for the year last”.
For reference, Crystal Dynamics had a profit margin of 3.6% in 2021 while Eidos Montreal had a profit margin of 0.65% in 2021.
Square Enix as a whole had an operating income margin of 14.2% last year. pic.twitter.com/2F5mGmu4Ln
— Daniel Ahmad (@ZhugeEX) May 2, 2022
In this way, the sale of the studios comes at a time when the three teams have become a burden for Square Enix. Compared, the division focused on mobile games and MMOs has generated more and better revenues in the same period of time. It is clear that the value of the properties is not in their legacy, but in their profitability, something that did not meet the expectations of the Japanese company.
On related topics, here’s what Square Enix plans to do with the money from the purchase. In the same way, here we tell you who the Embracer Group is.
Editor’s note:
Admittedly, compared to the mobile division, MMOs, and Japanese projects, sales of their Western games failed to meet production costs. However, it is sad to see that Embracer Group paid double for a studio tasked with making mobile games a couple of months ago.
Via: Daniel Ahmad
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