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Square Enix is ​​reportedly looking to sell a stake in its partially wholly-owned development studio, saying Crystal Dynamics and Eidos Montréal were sold because they were “cannibalizing” from the wider group.

reporter Game Industry Analyst David Gibson During Square Enix’s latest earnings call, the publisher reportedly viewed the unexpected sales of Crystal Dynamics, Eidos Montréal and Square Enix Montreal as “phase one” of its business transformation.

In the second phase, Square Enix will apparently review the portfolio of its own studios and decide whether to retain full ownership or allow other companies to buy stakes in those businesses. The benefit, according to Gibson, is to allow Square Enix to move resources between studios more easily, apparently to be able to “allocate resources primarily to Japanese games.”

Gibson expects the likes of Sony, Tencent and Nexon to be interested in buying Square Enix’s studios, and management reiterated its interest in acquiring new developers to add to its portfolio.

During the conference call, Square Enix reportedly explained that it decided to sell its high-profile Western developer because companies such as Crystal Dynamics “cannibalized” the rest of the group, which seemed to drain resources Harder to distribute across the entire development portfolio – presumably due to high development costs like Marvel’s Avengers.

IGN has reached out to Square Enix for a statement regarding these announcements.

Square Enix’s remaining development studios include its four creative business units (making Final Fantasy, Kingdom Hearts, and more recently the “HD-2D” franchise), Luminous Productions (Forspoken), Tokyo RPG Factory (I’m Setsuna), Square Enix Enix London Mobile (Tomb Raider Reloaded) and more.

Like most gaming companies post-pandemic, Square Enix’s latest earnings report showed a year-over-year decline in net sales for its gaming division, despite the incredibly successful Final Fantasy 14 bucking the trend again, seeing Net sales rose due to an increase in the number of monthly subscribers.

Joe Skrebels is IGN’s executive news editor.follow him Twitter. Is there a tip for us? Want to discuss a possible story?Please send an email to

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