Japan is moving more and more towards mobile and F2P.
True. Also happening in the rest of the world, but it's particularly true in Japan.
Investing billions of dollars into Square Enix's languishing IP makes zero sense. They don't have the talent and interest is waning.
Square Enix's results show this is wrong. They have been growing their main KPIs in the last 5 or 10 years.
Chrono Trigger came out almost 30 years ago and we're still talking about it because Square Enix hasn't done anything worthwhile with the IP since and that includes Chrono Cross.
Yes, I think Chrono Trigger is a valuable asset. I think there's potential there to make:
- Anime tv series adaptation of the first game
- High budget big ass remake, almost FFVIIR level, with Toriyama style cel shading
- After it, a sequel with that engine bringing back most of the main characters and ignoring Chrono Cross
Dragon Quest is worthless in the West and Final Fantasy is diminished as a brand.
Dragon Quest XI sold over 6M copies on its first 3-4 years and we know FF performed very well with FFXIV, FFXVI and FFVII remakes. Both IPs are in good shape.
Their market cap is 4.44 billion dollars, their actual price would be significantly higher.
Yes. Considering their assets, projection of their KPIs, etc. and the premium paid in recent big gaming market acquisitions, I'd say to acquire SE pretty likely would cost minimum something around $10B-$12B.
That they're canceling projects and still suffering operating losses despite releasing their major game releases FF16 and FF7 Rebirth back to back should tell you everything you need to know about their pipeline and their profitability.
If Sony Pictures released a Spider-Man movie and posted a loss for that fiscal year, that would be devastating to them.
The value of Square Enix is only going down from here. If Sony actually wanted to buy Square Enix the smartest thing to do would be to wait for the market cap to bottom out and then buy them. Note they're down 25% in the last year.
This is not how companies work. The most recent big release(s) of a company isn't that important for them, they have a way wider picture:
Companies earn revenue with these big releases but also with minor ones and catalog titles (meaning, released in previous fiscal years). That money gets mostly reinvested in future projects, sometimes generating loses for that year but the idea of reinvesting it is that is going to transform in way more money in the long term.
I mean, let's say a big game recoups its investment and generates "$400M" in profit. Instead keeping them in the bank and posting them as profits that year, the company reinvest that money in the devenlopment of two similar games more without posting that money as profit, with the idea of in the future get "$400M" from each one of them, a total of "$800M".
As a result of this, companies who perform well keep increasing their revenue over time, even if their profits posted are relatively low and don't worry about them unless the company is generating huge loses.
This is the main reason of why when valuating a company investors care way more about seeing a huge and growing revenue than seeing profits. But hey, if there are growing profits too, that's better, but not that important. Because having huge and growing revenue it's way easier to increase profits when desired by optimizing some costs by cutting some fat.
Square releases way too much AA trash. Most of it Switch-exclusive and no one buys them. Weird how nobody is blaming Nintendo for these low sales. All the attention is on the few Sony exclusives (that do sell in the millions).
They better keep that money for something else. Like more AAAs with Sony
I agree, if I was Square-Enix I'd focus on reducing quantity to increase quality:
- Big ass AAA new numbered FF, Dragon Quest, Mana, Crono Trigger, Nier Automata
- Big ass AAA remakes in the reimagined way of the FFVIIR titles
- Next gen, highly improved "2D-HD" remakes of old classics keeping the original gameplay 1:1
- Optimize their mobile and arcade business maybe combining them, and take a better advantage there of Taito's classic IPs
- New IPs like Forspoken and Foamstars didn't work out, so I'd stop making new IPs for a while (maybe 5-7 years)
Meaning, other than downports of the 2D-HD titles and port of the mobile games I'd ignore Nintendo, to focus on the big ass games for PS and PC.
