Square sell Eidios and all IP, then use that cash to fund more games from thier Japanese side, which is where the success has been coming from
I don’t think their issue is with funding their Japanese games, but getting them out the door in a reasonable timeline. This is where potentially more development teams (or support studios) could come in handy. Which is exactly what Eidos and CD could be assigned to if Square finds it necessary.
Insomniac was not a publicly traded firm. Its owners could accept any offer they wanted with no repercussions. Public firms play by a different ruleset, with fiduciary responsibility to their shareholders. If they refuse a higher offer they better have a damn good reason or they will be hit with lawsuits and perhaps regulatory scrutiny.
I’m not saying it’s impossible to accept a (slightly) lower offer, but it is rare. With good reason.
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I think there’s probably two levels here:
- This is about a de-investment in Avengers. I don’t know what kind of minimum guarantee Square Enix gave Disney for the Avengers license, but I baselessly speculate that it was in the neighborhood of $150m or more. They made the deal during the lead up to Infinity War / Endgame, when the Avengers was the hottest IP in entertainment, and I’m guessing Disney made them pay through the nose. In order to justify that kind of minimum guarantee (on top of the development and advertising costs), Square Enix needed to commit (internally, if not externally) to a Destiny-like long term plan for that game such that regular major content drops would keep people coming back to spend more on MTX, which could then be used to recoup development / advertising, pay the MG to Disney, and create profits for SE. But I think about a year ago SE decided that Avengers was a total write-off. So while they’ll nominally support the game going forward, I’m guessing they’ve massively scaled back the scope of that support. And because they’d committed hard to a multi-year support plan, they didn’t have a project queued up for the team. So then they connect with MS, and MS says “hey, we’ll bankroll most of the studio for a couple years supporting our game, while you figure out and do pre-production on your next project.” And SE couldn’t be happier, because after taking a gigantic loss on Avengers the last thing they want to do is have their expensive development team sit on their hands.
- But the door is wide open for an acquisition in a way that it wasn’t previously. What has always kept me from seriously entertaining a sale of the SE West studios is that SE is in the video games business. Not in the “selling assets” business. Generally speaking, a company doesn’t want to dispose of its business assets or business units unless they want to use the proceeds from the sale (or the budget for funding that business unit in the future) pay down debt or invest heavily in other lines/areas of business. So it’s a bit difficult to for them to ever sell those studios, lose the revenue they produce, and kinda not have anything to do with that money. But now? Now the CD team is on hiatus, while it figures out a new project and Eidos is coming off Guardians. Maybe this is the time to say “hey, if CD isn’t going to be making a game for SE for the next couple years, maybe we can use this interim time to refocus and invest more deeply in the kinds of Japanese developers/games that have been more successful than our big-budget western games? And we can use the proceeds of the sale of CD/Eidos to really, really ramp up that investment.” Doing this wouldn’t make sense if it were putting them two years behind the ball where they’d be if CD were already ramping up on their next project. But now? Maybe.
Like, prior to this news I’d have put the odds of MS buying SE West at like 5%. But now? I wouldn’t be surprised if MS and SE weren’t already discussing what an acquisition of CD / Eidos “might look like” and they started to bang out a deal after the release of Guardians of the Galaxy.
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MS have a long history with both devs, theyd be perfect for XGS. Deus Ex as well, so much potential
I’m thinking Eidios Montreal come on board as well.
FWIW, Crystal Dynamics is opening a studio in Austin TX, likely to take over development of Avengers. My guess is that the main CD teams are handling that transition while part of CD is going to assist TI on Perfect Dark. We don’t know what percentage of CD is going to which project.
https://gamerant.com/crystal-southwest-dynamics-new-studio-austin-texas/
Regardless, this personally makes me even more excited for Perfect Dark, and the future of Xbox.
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I would be excited for SE west and having Lara Croft becoming an MS mascot. the character may not be as popular as when Angelina Jolie played her in the movies but she is still a very recognizable figure in gaming and non gaming media.
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I didn’t realize that Crystal Dynamics had three sperate studios.
I’d be cool with this from a business standpoint but from a jaded xbox gamer standpoint I’m still like eh. It would be ironic that Xbox money isn’t good enough for SE to make all their games multi-plat but it would be good enough to bail them out when shit hits the fan 
Just saw the news . Square Enix back on the menu boys !
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It was none other than Phil Spencer.
na he is right . I think the studio head ( dont quote me on this ) made a tweet with his daughter sitting with him and he said that she is playing perfect dark ( it was not revealed to be perfect dark at that time tho ) .
Maybe just buying Crystal Dynamics off Square Enix?
On the news, at first it seemed odd, but on reflection it makes sense.
Square Enix’s business plan was for CD to be working on Avengers as a GAAS for years to come. It flopped. Now they have a massive team and no project.
Microsoft founded the Initiative to make a big scope AAA game but the studio hasn’t reached the staffing level where they can deliver it.
MS probably intended to use lots of different contracted developers to support TI to deliver Perfect Dark, but if the stars align and there is an experienced large team available, surely that’s an ideal opportunity. Much cleaner and less chaotic.
Edit: add to this that the studio head used to run CD and knows the team and how they work and it’s kind of a golden solution.
As the first sentence said, SE have seemed nonplussed with CD for a while, bitching about Tomb Raider sales even though they sold well. Wouldn’t be surprised if at the end of the contract SE sold them to MS.
Merge them with the Initiative to make The Crystal Initiative or something.
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Wasn’t there a rumour that SE want to sell off their western division? 
So if Perfect Dark ends up being CD’s best reviewed game and they have a blast collaborating with the old guard they’re just going shake hands and say had fun collaborating and return to what ever license Square Enix gives them next huh?
This is stage one of the acquisition.
Just swap out IO Interactive for Crystal Dynamics and you’ve got yourself a peak into the future.
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Who is in their Western Division besides Crystal Dynamics and Eidos Montreal?
It was Drew Murray’s kid.
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Cool. That seems like a pretty reasonable acquisition expectation then and not too chaotic to integrate.
I wouldn’t get too excited about news soon though. Even if true, would expect them to see how the CD/Initiative project panned out first.