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Sony set to buy Square Enix

Bryank75

Banned
Cool, thanks.

Yeah, in the end Sony has more than enough means to acquire a company like Square Enix if they wanted to. Such a deal almost certainly wouldn't be cash anyways.

As for why Sony would want Square, as of late Sony's been very interested in properties that they can both make games and also TV shows/movies with. Not to mention their anime push. A company like Square or even Capcom would provide them with a treasure trove of IP they could mine for all of those purposes, so it wouldn't have to just be about the games. I've been saying Sony should make a move for Capccom for the longest time.

As for this rumor, there's nothing solid to back it up but there's still no harm in discussing the possibility.
I believe banks need a certain % of cash on hand to operate due to laws in most countries.... it is a % of the deposits on hand to guarantee that the bank remains liquid.

It doesn't mean that Short term investments cannot be changed to cash and used for an acquisition.

They have 44.6 Billion cash on hand.... whether you go to Yahoo charts, MacroTrends or any other financial site.


Also.. Sony has a tiny amount of debt (around 6 billion). They could literally buy Square and Capcom at the same time and it wouldn't really impact them in any way.

For example, they only need 51% to control each..... so call that an initial investment of 4.5 billion in Square and 4 Billion for Capcom....a total of 8.5 billion.

They could offer 4 billion in cash, 2 billion in debt and the rest in stock. (Various combinations could be used)

Then each subsequent year, they can offer a stock buyback when the stock value goes down..... and get all the outstanding stock at a decent price.
 

vivftp

Member
I believe banks need a certain % of cash on hand to operate due to laws in most countries.... it is a % of the deposits on hand to guarantee that the bank remains liquid.

It doesn't mean that Short term investments cannot be changed to cash and used for an acquisition.

They have 44.6 Billion cash on hand.... whether you go to Yahoo charts, MacroTrends or any other financial site.


Also.. Sony has a tiny amount of debt (around 6 billion). They could literally buy Square and Capcom at the same time and it wouldn't really impact them in any way.

For example, they only need 51% to control each..... so call that an initial investment of 4.5 billion in Square and 4 Billion for Capcom....a total of 8.5 billion.

They could offer 4 billion in cash, 2 billion in debt and the rest in stock. (Various combinations could be used)

Then each subsequent year, they can offer a stock buyback when the stock value goes down..... and get all the outstanding stock at a decent price.

Good post.

My own personal random prediction is that before the end of this gen Sony will have acquired:

Bluepoint
Housemaruqe
Kadokawa (the recent announcement involving anime makes me think they'll eventually pull the trigger to get that IP and it includes From, of course)
KojiPro (Kojima would be at home making games and movies, plus get a nice pay day for selling to Sony)
Square or Capcom

Plus they'll probably open a couple more studios internally. This is in addition to more of their studios transitioning to 2 teams,

I do believe in the rumors that there's some stuff going on between Sony and Konami as well, but whether that will eventually lead to some sort of acquisition of IP or the whole company is anyones guess. It could just be a license deal, but I think something's brewing there at least for Silent Hill and Metal Gear.


If Sony is getting exclusivity or timed exclusivity deals, why bother buying a company?

They get more profits from the sale of games than their current cut. They can also freely use the IP for whatever they want, like TV shows and movies. It can also be a defensive move to prevent someone else from acquiring them if Sony feels these titles are too important to lose for their platform. Any number of reasons.
 
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I believe banks need a certain % of cash on hand to operate due to laws in most countries.... it is a % of the deposits on hand to guarantee that the bank remains liquid.

It doesn't mean that Short term investments cannot be changed to cash and used for an acquisition.

They have 44.6 Billion cash on hand.... whether you go to Yahoo charts, MacroTrends or any other financial site.


Also.. Sony has a tiny amount of debt (around 6 billion). They could literally buy Square and Capcom at the same time and it wouldn't really impact them in any way.

For example, they only need 51% to control each..... so call that an initial investment of 4.5 billion in Square and 4 Billion for Capcom....a total of 8.5 billion.

They could offer 4 billion in cash, 2 billion in debt and the rest in stock. (Various combinations could be used)

Then each subsequent year, they can offer a stock buyback when the stock value goes down..... and get all the outstanding stock at a decent price.

I think that it’s likely more than just reserve balance requirements. A quick research of Japanese insurance and banking laws shows that there are strict limits on what types of businesses these companies can have as subsidiaries or be invested in. The only relevant posting that I could find on conglomerates was financial conglomerates, much like how the US has allowed banks to have banking and investment banking segments. I don’t see much talk about considerations of conglomerates in financial and non-financial industries. I’m not an attorney, let alone experienced in Japanese finance industry laws. So, I can’t say for certain what they can and cannot do. However, based on what I see in their financials as well as some Japanese laws, I doubt they would easily be able to use those funds for a non financial industry acquisition.
 
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Dabaus

Banned
Didn’t buddy walk it back saying that Sony would acquire a large stock amount and not a full on purchase? I’d like to know who in SE or Sony management is out there leaking these kinds of things to Twitter randos and you tubers. That’s why I think it’s fake. I’d like for it to be real but consider the source here.
 

Bryank75

Banned
I think that it’s likely more than just reserve balance requirements. A quick research of Japanese insurance and banking laws shows that there are strict limits on what types of businesses these companies can have as subsidiaries or be invested in. The only relevant posting that I could find on conglomerates was financial conglomerates, much like how the US has allowed banks to have banking and investment banking segments. I don’t see much talk about considerations of conglomerates in financial and non-financial industries. I’m not an attorney, let alone experienced in Japanese finance industry laws. So, I can’t say for certain what they can and cannot do. However, based on what I see in their financials as well as some Japanese laws, I doubt they would easily be able to use those funds for a non financial industry acquisition.
I just wouldn't understand why they wouldn't be allowed use....lets take for example the investment they made in M3 inc. That investment was made before 2016 (as I mentioned to you before) and is now worth 22 or so Billion alone and is included in their short term assets / investments.

Why would they suddenly not be allowed to turn that to cash and use it for anything they want?

Those shares were bought with Sony corp money and not Sony Financial holdings money and just because Sony bought a bank, doesn't mean that suddenly becomes off-limits to them....even if it is managed by SFH.

I think we are both speculating a lot here and neither of us has enough info. However it really doesn't make sense that assets would become unusable when they own a bank unless we are talking about Bank reserve cash.
 
Bluepoint
Housemaruqe
Kadokawa (the recent announcement involving anime makes me think they'll eventually pull the trigger to get that IP and it includes From, of course)
KojiPro (Kojima would be at home making games and movies, plus get a nice pay day for selling to Sony)
Square or Capcom

Plus they'll probably open a couple more studios internally. This is in addition to more of their studios transitioning to 2 teams,

I do believe in the rumors that there's some stuff going on between Sony and Konami as well, but whether that will eventually lead to some sort of acquisition of IP or the whole company is anyones guess. It could just be a license deal, but I think something's brewing there at least for Silent Hill and Metal Gear.
I agree that Sony is likely to make a couple big purchases soon. Buying Kadokawa, KojiPro, and the Metal Gear/Silent Hill IPs from Konami all make sense to keep them out of Microsoft's hands. As far as the bigger players are concerned, I think it boils down to a combination of whether Sony would prefer to keep Dragon Quest or Monster Hunter off of the Switch and whether it's more worried of Final Fantasy or Resident Evil going to Xbox. I think Capcom is more likely in that regard, since Monster Hunter has more growth potential in the West than Dragon Quest and since Resident Evil is a more plausible Xbox exclusive than Final Fantasy. Final Fantasy is unimaginable as a Switch or Xbox exclusive franchise, so Sony doesn't need to drop a couple billion to secure it - setting aside the fact that it's a franchise in secular decline due to Square's mismanagement.
 
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Bryank75

Banned
Good post.

My own personal random prediction is that before the end of this gen Sony will have acquired:

Bluepoint
Housemaruqe
Kadokawa (the recent announcement involving anime makes me think they'll eventually pull the trigger to get that IP and it includes From, of course)
KojiPro (Kojima would be at home making games and movies, plus get a nice pay day for selling to Sony)
Square or Capcom

Plus they'll probably open a couple more studios internally. This is in addition to more of their studios transitioning to 2 teams,

I do believe in the rumors that there's some stuff going on between Sony and Konami as well, but whether that will eventually lead to some sort of acquisition of IP or the whole company is anyones guess. It could just be a license deal, but I think something's brewing there at least for Silent Hill and Metal Gear.




They get more profits from the sale of games than their current cut. They can also freely use the IP for whatever they want, like TV shows and movies. It can also be a defensive move to prevent someone else from acquiring them if Sony feels these titles are too important to lose for their platform. Any number of reasons.
They'll need to consider things carefully...

Square is massively dependent on Sony but they have about 5 thousand staff.... that is the same amount as PlayStation. Square also have 1 billion cash, so if they were a wholly owned subsidiary, that would become Sony's cash and would refund a large chunk of the investment.

Capcom has just below 3 thousand staff but are a bit less dependent on Sony, they make a good amount from Nintendo.... so it might be worth just buying a large or majority stake and let them continue making money from other sources while strategically organizing exclusives to win back the Japanese audience etc.

There are a lot of factors...
 

Bryank75

Banned
I agree that Sony is likely to make a couple big purchases soon. Buying Kadokawa, KojiPro, and the Metal Gear/Silent Hill IPs from Konami all make sense to keep them out of Microsoft's hands. As far as the bigger players are concerned, I think it boils down to a combination of whether Sony would prefer to keep Dragon Quest or Monster Hunter off of the Switch and whether it's more worried of Final Fantasy or Resident Evil going to Xbox. I think Capcom is more likely in that regard, since Monster Hunter has more growth potential in the West than Dragon Quest and since Resident Evil is a more plausible Xbox exclusive than Final Fantasy. Final Fantasy is unimaginable as a Switch or Xbox exclusive franchise, so Sony doesn't need to drop a couple billion to secure it - setting aside the fact that it's a franchise in secular decline.
Agree with Capcom being more at risk.

But nobody can buy everyone... if they buy or protect Capcom and Square.... Sega could get swiped.
 
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Agree with Capcom being more at risk.

But nobody can buy everyone... if they buy or protect Capcom and Square.... Sega could get swiped.
Would Sony necessarily care if Sega got swiped? I'm probably missing something, but Yakuza and Persona are obviously not viable as Xbox exclusives. Unless you think Nintendo would pick them up?
 

Bryank75

Banned
Would Sony necessarily care if Sega got swiped? I'm probably missing something, but Yakuza and Persona are obviously not viable as Xbox exclusives. Unless you think Nintendo would pick them up?
They are not viable but they are losses to PlayStation if they don't release there.... that and the classic titles and Sonic games might be enough of a reason for Microsoft.

My approach would be to sign a longterm contract for Persona and Yakuza, if I were Sony. Persona in particular though!

That way even a buyout isn't much of an issue.
 
They are not viable but they are losses to PlayStation if they don't release there.... that and the classic titles and Sonic games might be enough of a reason for Microsoft.

My approach would be to sign a longterm contract for Persona and Yakuza, if I were Sony. Persona in particular though!

That way even a buyout isn't much of an issue.
Agreed that Sony should lock down Persona and Yakuza, though I think they have more to worry about from Nintendo on both counts than Microsoft. Persona in particular is a franchise seemingly custom made for the Switch (graphically unimpressive JRPG that does most of its sales in Japan). I'd be shocked if Persona 5 didn't get a Switch port soon considering that SMT5 is a Switch exclusive.
 
I just wouldn't understand why they wouldn't be allowed use....lets take for example the investment they made in M3 inc. That investment was made before 2016 (as I mentioned to you before) and is now worth 22 or so Billion alone and is included in their short term assets / investments.

Why would they suddenly not be allowed to turn that to cash and use it for anything they want?

Those shares were bought with Sony corp money and not Sony Financial holdings money and just because Sony bought a bank, doesn't mean that suddenly becomes off-limits to them....even if it is managed by SFH.

I think we are both speculating a lot here and neither of us has enough info. However it really doesn't make sense that assets would become unusable when they own a bank unless we are talking about Bank reserve cash.

The M3 investment, which was previously consolidated until Sony sold shares to no longer have 50.1% ownership in the 2013 20-F, is not in their short term investments, it’s on their balance sheet in non-current assets under Affiliated companies. If you look at the breakdown of Net Income with and without Sony Financial Services, you’ll notice that their portions of income/losses from affiliated companies is very small compared to the non Financial Services segment. Therefore, also knowing that it used to be fully consolidated and is not an insurance or banking company, M3 would not have been a subsidiary of Sony Financial Services and would not be limited like the Financial Services segment. You have to read their actual financials and laws to know the details. Just knowing about certain investments won’t give you the full picture. We are both speculating; however, my speculation is much more grounded in their financial filings and the statements in them.

To your point about not being able to use the funds from Sony Financial Holdings, they sure can if they sell the division. I saw a lot of articles that thought that Sony should have sold that business rather than make an offer for the outstanding shares.
 
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Komatsu

Member
I doubt it.

Sony purchased a 18.6% stake in Squaresoft Co. in 2001, which eventually amounted to 15% in Square Enix, only to completely divest itself of all Square Enix shares it had in 2014, about six years ago. It's cheaper and more cost-efficient for them to keep investing on exclusivity deals than to sink the cash on a full-on purchase of the company.

Additionally, I doubt either the Fukushima or the Miyamoto families would be willing to give up control.
 
I doubt it.

Sony purchased a 18.6% stake in Squaresoft Co. in 2001, which eventually amounted to 15% in Square Enix, only to completely divest itself of all Square Enix shares it had in 2014, about six years ago. It's cheaper and more cost-efficient for them to keep investing on exclusivity deals than to sink the cash on a full-on purchase of the company.

Additionally, I doubt either the Fukushima or the Miyamoto families would be willing to give up control.

Their past stake in SE doesn't really mean anything. They're under completely new leadership and that was also during their restructing phase under Hirai.
 
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Their past stake in SE doesn't really mean anything. They're under completely new leadership and that was also during their restructing phase under Hirai.

I totally agree. The question for me is what would be the best target to acquire. Is it really SE or would they be better off acquiring Capcom or Sega (considering that brings them Atlus)?
 
I totally agree. The question for me is what would be the best target to acquire. Is it really SE or would they be better off acquiring Capcom or Sega (considering that brings them Atlus)?
I think Capcom is the clear winner. It's a better run company than Square and its core franchises make more strategic sense to secure for the PlayStation ecosystem, plus it has a ton of viable franchises floating around in its back catalog that Sony could do plenty with. I don't think Sony wants to saddle itself with the task of figuring out how to turn the sinking ship of Final Fantasy around or how to make traditional JRPGs take off in the west again. Buying Sega just to get Yakuza and Atlus doesn't make sense to me either - if Sony wants to reconquer Japan it makes more sense to focus on Monster Hunter (or even Dragon Quest).
 

Bryank75

Banned
The M3 investment, which was previously consolidated until Sony sold shares to no longer have 50.1% ownership in the 2013 20-F, is not in their short term investments, it’s on their balance sheet in non-current assets under Affiliated companies. If you look at the breakdown of Net Income with and without Sony Financial Services, you’ll notice that their portions of income/losses from affiliated companies is very small compared to the non Financial Services segment. Therefore, also knowing that it used to be fully consolidated and is not an insurance or banking company, M3 would not have been a subsidiary of Sony Financial Services and would not be limited like the Financial Services segment. You have to read their actual financials and laws to know the details. Just knowing about certain investments won’t give you the full picture. We are both speculating; however, my speculation is much more grounded in their financial filings and the statements in them.

To your point about not being able to use the funds from Sony Financial Holdings, they sure can if they sell the division. I saw a lot of articles that thought that Sony should have sold that business rather than make an offer for the outstanding shares.

34%


They sold some a few years back too.

Would still be in short term assets.
 

Bryank75

Banned
I think Capcom is the clear winner. It's a better run company than Square and its core franchises make more strategic sense to secure for the PlayStation ecosystem, plus it has a ton of viable franchises floating around in its back catalog that Sony could do plenty with. I don't think Sony wants to saddle itself with the task of figuring out how to turn the sinking ship of Final Fantasy around or how to make traditional JRPGs take off in the west again. Buying Sega just to get Yakuza and Atlus doesn't make sense to me either - if Sony wants to reconquer Japan it makes more sense to focus on Monster Hunter (or even Dragon Quest).
and less staff...easier to manage, less expenses etc.

It's nearly half the size in terms of employees.
 
and less staff...easier to manage, less expenses etc.

It's nearly half the size in terms of employees.
And it releases big, graphically intensive AAA games within reasonable development time and budget parameters. Sony wouldn't have to deploy an army of executives and producers to whip them into shape, whereas one look at Final Fantasy's development history since like 2005 makes it clear that something is seriously, fundamentally, potentially unfixably wrong at Square.
 
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Dabaus

Banned
I totally agree. The question for me is what would be the best target to acquire. Is it really SE or would they be better off acquiring Capcom or Sega (considering that brings them Atlus)?
Yes absolutely sqaure would be the best publisher for Sony to get.

Final fantasy
Kingdom hearts
Dragon quest
Tomb raider
Chrono series
Nier
Legend of mana
Tactics jrpgs

Plus the endless spin-offs associated with each. And the thing is most of those games are irrelevant on Xbox as is even with Xbox marketing deals and what not. A single final fantasy 7 spinoff, assuming it’s good, could easily be a 5-6 million seller and that’s just from ff7 alone not mention all the remakes and new ideas you could use with just that IP alone.

As far as capcom or square question goes. What would theoretically be easier to replicate if you HAD to, final fantasy or resident evil? Resident evil no doubt is easier to replicate. There are a few monster hunter clones out there too. For what it’s worth sales data came out and like a majority of capcom revenue and profit comes from PlayStation so of anyone was going to buy them they’d have to pay an outrageous price probably. And capcom games (monster hunter) does extremely well on Nintendo hardware as well. To keep capcom from Sony and Nintendo you’d basically be killing the company and I’m sure everyone involved would know, especially capcom.

Sega is irrelevant compared to capcom or SE.
 
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34%


They sold some a few years back too.

Would still be in short term assets.

Yes, they’ve sold shares several times. 2013 was the big year as it was no longer consolidated in their results. They say that equity method investments, which M3 is, are investments in affiliated companies, looking at that on their balance sheet, it’s not in current assets.
 

Bryank75

Banned
Yes, they’ve sold shares several times. 2013 was the big year as it was no longer consolidated in their results. They say that equity method investments, which M3 is, are investments in affiliated companies, looking at that on their balance sheet, it’s not in current assets.
Interesting... do you have a link to that note?

I wonder if they are going to expand in the medical area...
 
I totally agree. The question for me is what would be the best target to acquire. Is it really SE or would they be better off acquiring Capcom or Sega (considering that brings them Atlus)?

I suppose you have to look at what their goals could be. Outisde of just having a bigger amount of first party studios I mean.

If they were to aquire any of them I'd imagine they'd remain independent managment wise. It'd just make it easier to work together and you'd still get some switch games and xbox games. Square Enix, Capcom or Sega would just be another division alongside Worldwide Studios

If they were looking at Konami I think they'd be more interested in the mobile gaming expansion more than anything, but there's alot of additional baggage in Konami, and I don't think they could just aquire Konami's entertainment division on its own since that's their main money maker.

SE > Capcom > Sega > Konami in terms of likely to least likely imo
 
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Varteras

Gold Member
I totally agree. The question for me is what would be the best target to acquire. Is it really SE or would they be better off acquiring Capcom or Sega (considering that brings them Atlus)?
I don't think Sega has nearly the strength in its IP, even with Atlus, to be worth taking over SE or Capcom. Persona consistently scores high but it doesn't sell anything like the games from the other two. We're talking Tomb Raider, Final Fantasy, Dragon Quest, Kingdom Hearts, Resident Evil, Street Fighter, Devil May Cry, Monster Hunter, and a huge log of legacy content that is more likely to find an audience today than most of what Sega has. The real debate then comes to SE or Capcom. As much as I think Square Enix is the best fit for Sony, Capcom would likely show the biggest returns on investment. If I were Sony I would outright buy one and take controlling stock in another with the intent on owning them within the next 5 years.
 
Interesting... do you have a link to that note?

I wonder if they are going to expand in the medical area...


Note 2, page F-16, Basis of Consolidation. Note 5, page F-29-F-30 talks about the Financial Statements of affiliated companies. You’re required to provide some basic info on their Financials since they are not consolidated in yours. M3 is specifically mentioned on the top of page F-30. Affiliated companies are under the Investments and advanced section of the Balance Sheet on page F-6.


Page F-32 of the 2013 20-F describes the M3 share sale, deconsolidation, and the subsequent measurement of the investment under the equity method.

I honestly wouldn’t be surprised if they got more into the medical area. There’s a lot of money to be made and the future is bright in that area with aging populations. Tele/video medicine is a big part of the future too.
 
I don't think Sega has nearly the strength in its IP, even with Atlus, to be worth taking over SE or Capcom. Persona consistently scores high but it doesn't sell anything like the games from the other two. We're talking Tomb Raider, Final Fantasy, Dragon Quest, Kingdom Hearts, Resident Evil, Street Fighter, Devil May Cry, Monster Hunter, and a huge log of legacy content that is more likely to find an audience today than most of what Sega has. The real debate then comes to SE or Capcom. As much as I think Square Enix is the best fit for Sony, Capcom would likely show the biggest returns on investment. If I were Sony I would outright buy one and take controlling stock in another with the intent on owning them within the next 5 years.

I think Capcom is the best return on investment too. I just don’t know the Japanese market well enough to knows sales of the three publishers. I agree that SE has more IP than Sega, just was’t sure in terms of freshness if Atlus IP is moving in the better direction.
 

Varteras

Gold Member
weird to carry on this thread when the source is unreliable and a nobody like rey.

why people don't ever learn from fud clickbaiters like mlid and geordiemp geordiemp 🤷‍♀️
Never stopped the Microsoft/Sega buyout rumor from continuing to be brought up and people carrying on when Wednesday comes and goes. I mean, the most recent time was an article that got started because someone named Xbox Ragnar on Twitter made vague claims and then Sega split its company. People are just talking about possibilities right now. If it could happen, should it happen, how would it happen. That kind of thing.
 

longdi

Banned
Never stopped the Microsoft/Sega buyout rumor from continuing to be brought up and people carrying on when Wednesday comes and goes. I mean, the most recent time was an article that got started because someone named Xbox Ragnar on Twitter made vague claims and then Sega split its company. People are just talking about possibilities right now. If it could happen, should it happen, how would it happen. That kind of thing.
think it was bradsams who refuelled MS buying someone big
 

Cornbread78

Member
Interesting.... this is the gaming industry right now..

QarBXti.gif
 
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If true, I think SqaureEnix management should run the entire Sony Japan gaming operation from software to hardware sales. Let someone else try to get things right in Japan. Sony's internal studios would benefit from any migration of talent and new bosses.
 
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Bryank75

Banned
Good post.

My own personal random prediction is that before the end of this gen Sony will have acquired:

Bluepoint
Housemaruqe
Kadokawa (the recent announcement involving anime makes me think they'll eventually pull the trigger to get that IP and it includes From, of course)
KojiPro (Kojima would be at home making games and movies, plus get a nice pay day for selling to Sony)
Square or Capcom

Plus they'll probably open a couple more studios internally. This is in addition to more of their studios transitioning to 2 teams,

I do believe in the rumors that there's some stuff going on between Sony and Konami as well, but whether that will eventually lead to some sort of acquisition of IP or the whole company is anyones guess. It could just be a license deal, but I think something's brewing there at least for Silent Hill and Metal Gear.




They get more profits from the sale of games than their current cut. They can also freely use the IP for whatever they want, like TV shows and movies. It can also be a defensive move to prevent someone else from acquiring them if Sony feels these titles are too important to lose for their platform. Any number of reasons.
Ah, I knew I recognized you from somewhere... just realized where! haha
 

Kev Kev

Member
Yet that’s what happening with FF16 so...?
It’s not enough, I want the whole damn studio to go under and be rebuilt 🤣

jk..... kind of.

I hope it’s good, but it’s still square and I’m sure it’s still most of the same people making the decisions. Would rather a completely new company who has nothing to do with square making it to be honest. They just suck at making video games now, imo
 

sublimit

Banned
Aside from seeing and laughing by the reactions and backpedalling this (very unlikely) acquisition would have had on some people personally i don't think i would have wanted that to happen.
I prefer big publishers/developers like SE to act independently (both in terms of bussines as well as in terms of creativity) rather than following the "orders" and "whims" of a platform holder.
 
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