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Martin the Warrior
November 26th, 2002, 08:41 PM
I think it's about time to officially declare this a weird year for video gamers. First, Square and Nintendo patch things up. Then, Rare leaves Nintendo for Microsoft. Now Enix buys Square? Unbelievable.


Japan game software firms Square, Enix to merge

By Yuka Obayashi

TOKYO, Nov 26 (Reuters) - Japanese game software makers Enix Corp <9684.T>, known for its blockbuster "Dragon Quest" series, and Square Co Ltd <9620.T>, maker of "Final Fantasy", said on Tuesday they would merge to help fight off intense competition.

Enix and Square said the deal would be worth about 89 billion yen ($727 million) based on Enix's pre-announcement share price.

The pact comes as Japanese video game software makers are facing rising development costs to create games for advanced systems such as Sony Corp's <6758.T> PlayStation 2 and Microsoft Corp's <MSFT.O> Xbox in a heavily saturated market.

With Sony and Microsoft both gearing up online game services, software publishers are also feeling pressure to develop costly network games to pave the way for future growth.

"We're going on the offensive with this merger. This will make our strengths complement each other," said Square President Yoichi Wada, who will become president of the new firm.

Wada told reporters that Square had a leading position in the online game market as well as strong name recognition in Europe and North America, while Enix had been successfully operating network games for personal computers in Asia.

The stock market gave the deal a high score, but analysts had mixed views. Enix shares, which stood at 1,821 yen by midday, shot up by their daily limit of 300 yen or 16.0 percent to 2,175 yen, while Square shares rose 6.42 percent to close at 2,005 yen.

"The merger is seen as a positive move for both companies as it will provide ample funds to cash-strapped Square while helping to smooth wide earnings swings at Enix, which depends solely on Dragon Quest sales," said Takeshi Tajima, analyst at BNP Paribas.

To summarize, Enix has bought Square. The new company will be called "Enix Square" to capitalize on Square's name recognition and will be headed by current Square Pres., Yoichi Wada.

This could be the biggest video game story of the year, as suddenly a single company will control a sizable chunk of the RPG market. Strange times ahead.

It'll be interesting to see how this affects Square's primary support of the PS2, as Sony's 18% interest in the company will now only amount to roughly 8% (according to the figures I've seen).

Are we ready for a Dragon Warrior with "Square" on it, though?

The Red Badger
November 26th, 2002, 10:06 PM
Crazy times. :cool: This sounds like it would open up more avenues, though, not close them like the Rare/Microsoft deal did. How long before FF characters show up in Dragon Quest, though, and vice versa? How about an Erghez (or whatever) style game with said characters?

I believe in the world of business, this is known as, *ka-CHING*

Slagar the Cruel
November 27th, 2002, 06:14 PM
Slagar here, reporting LIVE from my Aunt's house! ;)

Originally posted by The Red Badger
Crazy times. :cool: This sounds like it would open up more avenues, though, not close them like the Rare/Microsoft deal did. How long before FF characters show up in Dragon Quest, though, and vice versa? How about an Erghez (or whatever) style game with said characters?Ca-razy times indeed. I hope that the characters will stick to their respective series...es... though, because that's one boundary I'd perfer unblurred.

Martin the Warrior
November 27th, 2002, 07:58 PM
I honestly can't help but see them poking fun at their old tombstone joke ("Here lies Erdrick" was it?).

Red Draco
November 28th, 2002, 06:36 PM
What surprises me is that Enix bought Square, not the other way around. I'd heard that Square was in some trouble after the Final Fantasy movie flopped, but wow.

It's not a bad thing, though. Enix makes some very good RPG's. If I'm not mistaken, both companies worked on Chrono Trigger, which was a fine game indeed.