Sony announced today in a press release that it would sell its stake in Final Fantasy developer Square-Enix for $47 million. The stock Sony owned in Square Enix Holdings amounted to 9.52 million shares according to the translated press release by The Wall Street Journal.
Sony originally purchased an 18.6% percent stake in Square Enix in October, 2001. At the time Square Enix was forecasting a 10 billion yen net loss when the forecast was for 700 million yen profit and needed an influx of cash.
Fans of the company will remember that was the year of the disastrous Final Fantasy: The Spirits Within which saw the rise and fall of Square Enix Pictures with its $137 million dollar production and the resignation of Final Fantasy creator Hironobu Sakaguchi. Square also did not have many big releases in 2001 other than Final Fantasy X and wouldn’t release another big title until Kingdom Hearts in March of 2002.
Even though Sony was the second largest shareholder, they did not have the ability to restrict Square Enix from releasing games on competing systems such as the Xbox from Microsoft or the Nintendo GameCube. The relationship between Sony and Square was very strong regardless as the PS2 and PS3 saw many Square Enix exclusive titles. Apart from Final Fantasy XI, the Xbox console would not see a dedicated Final Fantasy game until Final Fantasy XIII.
Sony would go onto sell part of their stock in Square Enix to where they were the third largest share holder with an 8.25% stake in the company which is what Sony has announced they are selling off this week. The irony is how the situations have reversed for the two companies.
The PlayStation 2 would go on to be the best selling console to date and would continue in production for 13 years. However the PlayStation 3 would prove to be a hard lesson in hubris for the tech giant as it struggled to keep up with the Xbox 360. In addition to the fragmented business model, Sony became an wieldy giant and began to collapse under its own weight. Today, Sony is in the midst of a major restructuring efforts. Some of these efforts have included the sale of major office buildings, retails stores and the termination of redundancies in the electronics division. In February, Games Industry reported on the lay off of over 5,000 employees.The infusion of $47 million will be a welcome “other income” on the financial results for the first quarter of the current fiscal year which ends on March 31, 2015.
Square Enix, on the other hand, has shown a return to profitability on the back of Final Fantasy XIV: A Realm Reborn as well as strong sales on console and handheld systems with surprising successes such as the traditional RPG Bravely Default for the Nintendo 3DS.
When Sony sells the Square-Enix stock, the stocks will be sold to SMBC Nikko Securities Inc. and is expected to be completed by Thursday.
Image Source | Square-Enix