Sony Corporation has sold off their entire portfolio of Square-Enix (SE) shares. For over a decade Sony’s gaming division, Sony Computer Entertainment, held a stake of 8.25% in Square-Enix, a stake which has now been sold in its entirety to SMBC Nikko Securities.
Square-Enix renowned for creating the Final Fantasy franchise (although technically Square were responsible for the birth of the famous RPG brand, as many of you may know) came to be when Square and Enix merged in 2003.
Last year Square-Enix business practices garnered some industry wide critique when the company stated how the reboot of Tomb Raider failed to meet expectations. A crazy notion, knowing that in the first month alone the game sold around 3.6 million copies. In the last two quarterly reports Square-Enix did manage to turn things around by showing a return to profitability. Even though the share price of the publishing giant improved over the last twelve months, Sony probably could have gotten a better deal if they would have sold their SE shares back in January when a share went for ¥2895 ($28.25) compared to ¥1685 ($16.44) now.
The PlayStation 4 is a huge success and with sales of the console just north of 7 million units it greatly exceeds the company’s estimations. The PlayStation brand is doing great, especially when compared to some other divisions at Sony. Normal business practices dictate the current restructure and realignment of interests.
Sony hasn’t issued out an official statement in regards to selling their Square-Enix shares but it most probably has a lot to do with the company’s need to free up resources. Sony parted ways with their 9.52 million Square-Enix shares for approximately ¥15.3 billion ($150 million), of which Sony will receive cash proceeds on a consolidated basis on April 21th 2014.
Did Sony lose faith in Square-Enix?
Since the news of this sale broke out, the internet began speculating about it; Why now? Sony abandons sinking ship, Final Fantasy XV exclusive on Xbox One, “give us a FF VII remake” etc.
Although technically speaking of a possibility, most of the examples above are just plain silly. However, this recent event might give us some insight in what we can expect from Square-Enix in the immediate future. Either Sony just sold their stake in SE to:
- Free up extra funds; focussing on a short term goal of staying in the black during the current fiscal year. This would mean Sony doesn’t believe Square-Enix will make a big splash this year, at least not enough to warrant keeping the SE shares.
- Sony decided that they no longer need those shares
- Sony indeed lost faith in Square-Enix.