Square Enix has clarified that money earned from the sale of its western studios Crystal Dynamics, Eidos Montreal, and Square Enix Montreal won’t go towards investments in NFTs or blockchain, following months of internet memes and speculation. The US $300 million (AU $417 million) sale will instead go towards strengthening the development potential of the company.
While a previous statement said the transaction would contribute to investments in ‘fields including blockchain, AI, and the cloud,’ it appears Square Enix has now walked back this intent. In the publisher’s financial results (per VGC), it has instead claimed the investment will service ‘solid IP’ and games creation.
‘Rather than using the proceeds from the divestiture in new investment domains such as NFT and blockchain, we intend to use them primarily to fund our efforts to foster solid IP and to enhance our development capabilities in our core Digital Entertainment segment,’ Yosuke Matsuda, Square Enix president said.
‘Our intention is to undertake fundraising efforts for our new investment domains separate from those for our core business, and we are considering various possibilities, including potentially establishing a CVC.’
CVC in this case refers to an investment fund designed for external startup companies – an indication that Square Enix is now looking to separate its core business of games creation from its interests in blockchain.
Read: Why are video game companies doubling down on NFTs?
Matsuda also stated in these financial results that the selling of its western studios was a direct result of a ‘reorientation’ of the Square Enix portfolio, with the company currently rethinking its investment plans.
Recent reports indicated a widespread disappointment with sales from games created by western studios, including Marvel’s Guardians of the Galaxy and Marvel’s Avengers – which is likely what inspired the decision to realign company investments.
‘We want to focus on creating new titles that align with our strategy, including ones that leverage new IP,’ Matsuda said. Just Cause was named as one of the major franchises the company was still keen on, although this was the only major title mentioned.
Given Square Enix is reportedly now looking for new studios to invest in, it appears the tide of video games will continue to flow. While early reports sparked fears the company would pivot heavily towards blockchain games, it appears that won’t be the case going forward. For now, Square Enix is focussed on a balanced portfolio, and on increasing its future games output.
