Square Enix has long been a vocal supporter of blockchain and NFT-based games in the gaming industry, but now the company is putting its money where its mouth is. Today, the Japanese company revealed that it would sell studios and essential franchises, including Tomb Raider, to help fund new business ventures, including blockchain.
Square Enix has agreed to pay Embracer Group $300 million for Tomb Raider, Deus Ex, Legacy of Kain, Thief, and game developers Crystal Dynamics, Eidos-Montréal, and Square Enix Montréal. In total, roughly 1,100 people are employed by the three studios.
Square Enix attributed the sale to the necessity to “[adjust] to the changes ongoing in the global business climate by establishing a more efficient allocation of resources,” according to a press release. It also mentioned the “start-up of new firms,” with blockchain featured among technologies like artificial intelligence and cloud computing.
Square Enix still has its long-running role-playing game franchises like Final Fantasy, Dragon Quest, and Kingdom Hearts and newer IPs like Life is Strange and Just Cause. However, the transaction appears to have resulted in a reduction in the company’s entire game production operations.
Embracer Group will also acquire the rights to more than 50 previous Square Enix games. Nordic Games and THQ Nordic were the earlier names for the Swedish publisher, which was created in 2011. It rose to prominence due to a succession of previous acquisitions, including Borderlands creator Gearbox Entertainment and Dark Horse Comics.
Square Enix first entered the crypto gaming space in 2020, spearheading a $2 million fundraising round for The Sandbox, an Ethereum-based metaverse game. In addition, Square Enix announced intentions to put its legendary Dungeon Siege franchise into The Sandbox’s gaming environment, which allows players to own virtual land plots sold through NFTs, just this past March.
Outside of The Sandbox, though, Square Enix has its vision. Following a successful test run selling NFT trading cards based on the video game and anime franchise Shi-San-Sei Million Arthur in Japan, the publisher announced intentions to offer its own NFT collectibles and NFT-powered games in November.
Square Enix president Yosuke Matsuda reiterated the company’s growing interest in cryptocurrency in January. He drew a distinction between people who “play to have fun” and those who “play to contribute,” implying that the latter is conceivable in blockchain games, where users own NFT assets and can earn token incentives based on their actions.
“Blockchain games, which have grown out of their infancy and are now entering a growth phase,” he wrote, “are built on the assumption of a token economy and hence possess the potential to enable self-sustaining game growth.”
An NFT is a blockchain-based deed of ownership for a digital item, such as artwork and collectibles, and video game avatars, creatures, weapons, and apparel. The overall NFT industry grew to $25 billion in 2021, with gaming accounting for a large portion of that increase. For example, the Ethereum-based game Axie Infinity alone surpassed $4 billion in NFT trade volume.
Square Enix isn’t the first game publisher to embrace NFTs; Ubisoft, in particular, is heavily committed to the space and has released in-game NFT products on the Tezos network. On the other hand, many gamers have loudly opposed the technology, citing the environmental impact of some blockchain networks, as well as scams and apparent greed on the part of game producers.