Square Enix considering mergers, acquisitions
President Yoichi Wada believes that the company needs to join with others to face the future and increased competition.
At the end of November last year, Electronic Arts CEO John Riccitiello said that he believed consolidation opportunities within the industry were drying up. Two days later, Vivendi merged with Activision in an $18.9 billion deal. Yet more consolidation appears to be on the cards, as Electronic Arts itself slowly moves toward a potentially hostile takeover of Rockstar parent Take-Two Interactive.
And while French publisher Ubisoft has made it known that it is "not interested in big acquisitions," Japanese developer Square Enix believes that some sort of consolidation is definitely in its future. Reuters reports that, while speaking at the news service's Global Technology, Media, and Telecoms Summit in Tokyo, company president Yoichi Wada said, "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. We face competition not only from the Japanese video game companies, but from game companies worldwide. We also see some new players from outside the video game industry coming in."
The executive added that he had no fixed budget set aside for investing in companies. He also pointed out that the company is allowed to issue some 290 million extra shares (worth approximately ¥960 billion or $9.24 billion) without shareholders' approval, and that this approach could be used in part for such a plan. Wada also reiterated that he wants to boost Square Enix's sales overseas. Currently half the firm's revenue comes from Japan, and he indicated he would like to see overseas sales accounting for up to 80 percent of his firm's revenue.
Square Enix was formed in 2003 as a result of a merger between two companies: SquareSoft, the creator of the popular role-playing series Final Fantasy, and Enix Corporation, developer of Dragon Quest and Star Ocean. SquareSoft previously had a joint venture with Electronic Arts called EA Square, which it used to bring games like Chrono Cross and Parasite Eve II to North America.
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