Square Enix offload DEUS EX and TOMB RAIDER studios and IPs

Square Enix has announced an intent to sell several of its highest-profile studios and IPs to the Embracer Group. Under the mooted deal, Embracer would buy the studios Crystal Dynamics, Eidos Montreal and Square Enix Montreal (totalling 1,100 employees), along with IPs including Deus Ex, Tomb Raider, Thief and Legacy of Kain. Currently in-development projects, like a new Tomb Raider game, will continue under the new owners.

Japanese company Square Enix bought Eidos and Crystal Dynamics in 2009 to shore up their overseas development portfolio. Initially the deal seemed to go well, with Crystal Dynamics releasing a Tomb Raider reboot trilogy (Tomb Raider, Rise of the Tomb Raider and Shadow of the Tomb Raider) and Eidos Montreal releasing the well-received and high-selling Deus Ex: Human Revolution. However, subsequent releases seem to have underperformed, at least according to Square Enix's expectations. A Thief reboot in 2014 sold poorly and got mediocre reviews, whilst Deus Ex: Mankind Divided sold poorly in 2016, after a controversial attempt to leverage microtransactions in a single-player game. The Crystal Dynamics-developed Marvel's Avengers also underperformed in 2020, which seemed to impact on sales of Guardians of the Galaxy in 2021 (despite stronger reviews).

However, the long tail on these releases is often quite significant, with the Deus Ex and Tomb Raider games continuing to sell well long after their release. This has led to memes as fans criticise Square for cancelling projects too quickly and in a kneejerk fashion, despite them eventually working out.

The Embracer Group is a Swedish video game holding company and publishes games under the names Nordic Games and THQ Nordic. Embracer recently acquired Gearbox Entertainment, creators of the Borderlands franchise, and board game company Asmodee as a way into the physical gaming market.

What is remarkable is the price: Embracer will get their hands on some of the most popular and beloved IPs in gaming for $300 million, which seems very cheap, and may reflect Square Enix's decision to get out of the overseas market to refocus on their core Japanese brands.

If approved by all the relevant parties, the deal should complete in mid-2023. It's likely the first game released under the new deal will be a new Tomb Raider game, whilst Deus Ex fans will be crossing their fingers for a new game in that franchise.