Games

Square Enix Plans to Buy Others

Although they might not know exactly which ones...

By Calin Ciabai, Games Editor

20th of May 2008, 08:00 GMT

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Final Fantasy, one of the best known Square Enix franchises

Everything is crystal clear for a while now: the future of video games will be in the hands of three or four huge game developers created from mergers

and buy-outs (and tender/hostile takeovers, probably). One of the latest companies that seems to have understood that is Square Enix which, ironically, was formed as a result of a merger between two long rivals - Square Co. and Enix Corporation. However, even though the company knows that mergers and investments in other companies are the future, it has no plans at the moment (or, at least, it doesn't feel the need to talk about them now).

Yoichi Wada, Square Enix President, told Reuters that he is considering taking stakes in other game developers in order to combat rising competition from established companies and new firms entering the video game market. Adding that now competition comes not only from Japanese video game companies, but from new "players" as well, they have to change their strategy a bit if they want to be successful in the future.

"Economies of scale and breadth of scope is getting important. It may be a business alliance or it may be us taking a stake in others, but we need to go beyond traditional Square Enix", Wada said. "We face competition not only from Japanese videogame companies but from game companies worldwide. We also see some new players from outside the videogame industry coming in," he added.

Still, it seems that there are no clear plans at the moment regarding future investment in other companies: Wanda said that it is a CEO's job to continuously talk with other companies. However, plans for the future are on the way, since Square Enix plans to move to a holding company structure this fall in order to be able to respond more quickly to "investment opportunities". This partially means that sales in video game units across the ocean should rise to 80 percent in three years (compared to 50% now).

TAGS:

Square Enix | Plans | future | mergers | takeover

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