Embracer Group to buy Crystal Dynamics, Eidos Montreal and IPs including Tomb Raider for $300 million

Embracer Group has agreed to acquire a large part of Square Enix’s western development arm for $300 million.

The deal will see Embracer Group acquiring Crystal Dynamics, Eidos Montreal, Square Enix Montreal and a catalogue of IPs including:

• Tomb Raider
• Deus Ex
• Thief
• Legacy of Kain

It will also include “more than 50 back catalogue games” from Square Enix. This will also potentially include Square Enix’s Marvel games, Avengers and Guardians of the Galaxy, subject to the licence holder’s agreements.

The total acquisition includes around 1,100 employees across three studios in eight locations around the world.

According to Embracer, the total purchase price will be $300 million, “on a cash and debt free basis, to be paid in full at closing”. The deal is expected to close in the second quarter of this financial year (between July and September 2022).

In a press release Square Enix said the deal “enables the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud”.

It added: “Going forward, the Company’s development function will comprise its studios in Japan, Square Enix External Studios, and Square Enix Collective. The Company’s overseas studios will continue to publish franchises such as Just Cause, Outriders and Life is Strange”.

In a separate statement, Square Enix America and Europe CEO Phil Rogers said: “Embracer is the best kept secret in gaming: a massive, decentralized collection of entrepreneurs whom we are thrilled to become a part of today.

“It is the perfect fit for our ambitions: make high-quality games, with great people, sustainably, and grow our existing franchises to their best versions ever. Embracer allows us to forge new partnerships across all media to maximize our franchises’ potential and live our dreams of making extraordinary entertainment.”

Embracer co-founder and group CEO Lars Wingefors added: “We are thrilled to welcome these studios into the Embracer Group. We recognize the fantastic IP, world class creative talent, and track record of excellence that have been demonstrated time and again over the past decades.

“It has been a great pleasure meeting the leadership teams and discussing future plans for how they can realize their ambitions and become a great part of Embracer.”

Crystal Dynamics announced last month that the next Tomb Raider game has entered development using Unreal Engine 5.

In a January 2021 video outlining its plans for the franchise’s 25th anniversary last year, Crystal Dynamics revealed that Lara Croft’s next adventure will “unify” the timelines in Core Design’s original Tomb Raider games and its own reboot trilogy, but warned fans not to expect it any time soon.

The president of Square Enix stated last month the company’s Japanese studios shouldn’t try to make games aimed specifically at western players.

In an interview with Yahoo Japan, Yosuke Matsuda explains that while it’s vital that Square Enix’s games sell well on a global scale, it would be a mistake if its Japanese developers tried to imitate the western style of games.

Wingefors reportedly told the Financial Times last month that he plans to make a number of acquisitions in the coming months and years. Since the start of 2020, the Swedish company has made 62 acquisitions at a cost of $8.1 billion (not counting the deal announced today).

Further reading

Square Enix’s president says its Japanese studios shouldn’t try to imitate western developers

Matsuda says the world recognises and appreciates Japanese games

When the deal is completed, Embracer, which also owns such companies as THQ Nordic, Koch Media/Deep Silver, Saber Interactive and Gearbox Software, will have 124 internal game development studios.

Its largest acquisition was the €2.75 billion purchase of French board game company Asmodee in December 2021.

Last year it acquired Borderlands developer Gearbox for up to $1.4 billion, and in 2020 it purchased World War Z and Witcher 3 port developer Saber in a deal that could rise to $525 million.

In March, Embracer acquired Dark Horse Media, one the leading US comic book publishers, for an undisclosed sum.