It’s been (another) big week for gaming news. On a humble Monday morning, the industry learned that Square Enix had agreed to sell Tomb Raider, Deus Ex, Lara Craft Go – along with the studios that make the games – to Embracer Group.
Although Square Enix will retain some of its Western IP – namely Just Cause, Life Is Strange and Outriders – it’s clear that the publisher has been keen to ditch many of its most notable brands. And it makes sense; Square Enix has publicly belittled its western studios in recent years. It almost felt like a disappointed parent moaning about their children in front of the other parents at the school gate.
Whether it was Tomb Raider, Deus Ex, Marvel’s Avengers, or Guardians of the Galaxy, Square Enix (loudly) issued releases that they called “sales disappointments” or talked about how unimpressed it is with the performance of the live services aspect the games. In 2013, the Tomb Raider reboot sold 3.4 million copies in just four weeks – and that was still a failure in Square Enix’s eyes. Esch.
But after Embracer Group’s agreement to buy the three major studios (Eidos Montreal, Square Enix Montreal and Crystal Dynamics) from Square Enix, the investment company shared a timeline of the Tomb Raider franchise alongside a lot of IP. Complete with some sales information we’ve never seen before.
Since launching the first game in 1996, Tomb Raider has sold 88 million units. A significant portion of that number – roughly 38 million sales – is attributed solely to the reboot trilogy, which began with Tomb Raider (2013) and went on to spawn both Rise of the Tomb Raider and Shadow of the Tomb Raider.
TL;DR? It’s a popular series with a lot of potential. So why was Square Enix so keen to outsource it – and so cheaply? Allow Chris Dring, friend of VG247 and gaming industry veteran, to put it in easy to understand terms.
In football, a club in financial difficulties will often sell its best player at a cheaper price if it can get him paid up front. It frees an expensive player from the payroll and gives him an instant cash injection. I hope this helps explain the price of Square’s western studios
— Christopher Dring (@Chris_Dring) May 3, 2022
Square Enix, it seems, is looking to rid itself of a slew of expensive studios — while getting a nice, fat cash injection. It’s been clear for some time that the Japanese publisher is a bit at a loss as to what to do with these studios, so getting Embracer to pay a nice big sum to acquire them is kind of a win-win for all sides. or?
Axios’ Stephen Totilo is also getting involved. Note that in 2021, Embracer paid more than twice what Square Enix paid for more than 50 intellectual property rights and three studios… for a mobile games company called Easybrain.
Last year, Embracer paid more than double that for a mobile gaming company called Easybrain https://t.co/uoCSMDfppq
— Stephen Totilo (@stephentotilo) May 2, 2022
Given that Square Enix notes that its studios generated about $200 million in revenue last year (but less than $8 million in operating income), it’s easy to see why the publisher chose to sell those studios to Embracer wanted to outsource — a company that clearly has enough money to invest in these companies in a way that Square Enix seems reluctant to do.
The long and short of it? Square Enix struck a deal with Embracer for $300 million — small compared to megaton deals like Sony’s $3.6 billion acquisition of Bungie. Especially considering Embracer is also acquiring the rights to the Tomb Raider films (three already exist and we’ll see about a fourth), Lara’s status as a cultural icon, and the potential of an upcoming Deus Ex film.
In reality, that’s a lot of money, but Embracer really has hit a gold mine here, thanks to Square Enix looking for a quick cash injection. And if everything goes according to plan for the company, we might even see some other legacy game series coming to modern consoles as well.
https://www.vg247.com/tomb-raider-lifetime-sales-embracer-square-enix Tomb Raider has 88 million lifetime sales, so why did Square Enix sell it so cheap?