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Unread 11-26-2002, 01:32 PM   #1
Studmaster
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With this blow, History has changed.

Quote:
TOKYO, Nov 26 (Reuters)
Japanese game software makers Square Co Ltd and Enix Corp (JP:9684) said on Tuesday they planned to merge in April to pool resources and technology to allow them to better compete in the rapidly changing video game industry.

The deal would be worth about 88.79 billion yen ($727 million) at current share prices.

Under the deal, one Square share will be exchanged for 0.81 share in Enix. Enix will issue 48.76 million new shares to swap existing outstanding shares in Square.

Square shares were up 8.28 percent at 2,040 at 0434 GMT. Enix shares were untraded at 1,821 yen with bids at 2,045.

Japanese video game software makers are facing rising development costs to create new games for advanced gaming systems in a heavily saturated domestic market.

Enix, known for its blockbuster Dragon Quest" games, and Square, creator of hit "Final Fantasy" role-playing games, enjoy solid sales from these million-seller titles but they also make profits vulnerable to sudden shifts in demand.

"In order to defy stiff competition in the game market and to survive for a long term, we thought it would be the best to join our forces," Enix director Tatsuo Tomiyama told Reuters.

Square, which lost 16.6 billion yen after an unsuccessful foray into movie-making last year, is now owned 18.6 percent by Sony Corp (JP:6758) , which makes the powerful PlayStation 2 game system.

Square spokesman Hideki Tsuchiya said the game creator expected to win approval for the merger from shareholders including Sony as the two companies have little duplication in their operations and the merger was expected to create synergy.

Enix and Square, along with another gamemaker, Namco (JP:9752) , agreed last year to collaborate on operations.

The company officials said the latest deal would not include Namco. ($1=122.06 yen)


There you have it folks. The bomshell of the year. Discuss
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Unread 11-26-2002, 01:36 PM   #2
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Thats pretty sweet, I mean.. they are going to rule the RPG market with an iron fist.. Lets just hope they meet the expectations of a company that large.
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Unread 11-26-2002, 01:38 PM   #3
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Here some more info for everyone to sink their teeth into.

Quote:
http://quote.bloomberg.com/fgcgi.cgi...mxNkR W5peCB0

Enix to Buy Square for $764 Mln to Add Video Games (Update5)
By Hiroshi Suzuki

Tokyo, Nov. 26 (Bloomberg) -- Enix Corp. agreed to buy Square Co. for 93.2 billion yen ($764 million) in cash and stock, combining the makers of ``Dragon Quest'' and ``Final Fantasy,'' Japan's most-popular role-playing video-game series.

Square has sold more than 42 million copies of the ``Final Fantasy'' games worldwide, while Enix has sold 30 million copies of ``Dragon Quest.'' Both are played on Sony Corp.'s PlayStation 2 video-game consoles.

Video game developers need to share costs to maintain their share of a $20 billion industry, where the combination of faster computer chips and jaded game fanatics demand Hollywood-style production techniques. Analysts say the typical budget for a hit game is 1 billion yen ($8 million).

``Game making is a hit-or-miss business, and they want to spend more money to produce attractive games that can become hits,'' said Jun Terasaka, who helps manage $163 million at Toyota Asset Management Co. and declined to say if he holds shares of Square or Enix.

Square President Yoichi Wada will head the new company, Square Enix, in which Enix shareholders will own a 55 percent stake.

Sony

Sony, the biggest maker of video-game consoles, holds 18.6 percent stake in Square through a game unit, Sony Computer Entertainment Inc., making it the second-largest shareholder. Sony Computer Entertainment will hold 8.4 percent stake in the new entity.

``The merged company will make better games for us and for the industry,'' said Kenichi Fukunaga, a spokesman at Sony Computer.

Square shareholders will get 0.81 of an Enix share and 30 yen in cash for each of their 60.2 million shares. That values Square at 1,548 yen a share based on yesterday's closing Enix share price. Nomura Holdings Inc. acted as a financial adviser on the transaction.

Enix shares rose 300 yen, or 16 percent, to 2,175 yen at the close of trading on the Tokyo Exchange. The shares were untraded in the afternoon as the number of investors wanting to buy them outnumbered those seeking to sell. They were allocated among investors by the exchange at the end of trading at 3 p.m. Square shares rose 6.4 percent, or 121 yen, to 2,005 yen.

Square Enix expects net income of 12 billion yen on sales of 61 billion yen in the year ending March 31, 2004, Square and Enix said in a press release.

``They are best-of-breed players in the role-playing game genre,'' said Zachary Liggett, an analyst at West LB Securities Pacific Ltd.

Square returned to profit in its fiscal first-half from a net loss a year ago as sales in the U.S. and Europe beat its expectations. Still, overall sales fell to 12 billion yen from 19.6 billion yen a year ago.

Square exited the movie business last year after its first feature-length film flopped. Square's ``Final Fantasy: The Spirits Within'' was a computer animated movie based on the ``Final Fantasy'' game series. The film failed to recoup its $135 million in development costs.
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Unread 11-26-2002, 01:40 PM   #4
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Scary... those two have been competitors forever. I thought that Square and EA had merged a few years ago. Is that wrong? ^^
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Unread 11-26-2002, 01:41 PM   #5
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I just hope Square doesn't mess up Enix's stuff.

Good possibility: More collaborative works between teams like Chrono Trigger.

Bad possibility: Enix follows Square's trend and starts making only Dragon Quest games and spinoffs.

And yes, Square merged with EA back in 1998 I believe...

Last edited by Recca-kun : 11-26-2002 at 01:45 PM.
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Unread 11-26-2002, 01:42 PM   #6
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Was talking about this thismorning. Final Fantasy + Dragon Quest. Could you have any greater hold on the rpg market. Although it does worry me what direction they will go in.
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Unread 11-26-2002, 01:43 PM   #7
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Quote:
Originally posted by Celine
Scary... those two have been competitors forever. I thought that Square and EA had merged a few years ago. Is that wrong? ^^
No, you are right, Square and EA merged in the US market to form Square / Electronic Arts.
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Unread 11-26-2002, 01:43 PM   #8
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Square and EA didn't exactely merge. They have had a joint partnership/ventureship that was to be used to help distribution in both markets for each country. (Two of the strongest brandnames in their home turfs) The joint venture was called Square EA.

However, this will end in 3/2003, and with this bomshell, it may not be renewed.


Edit: I thought you meant Square and Enix
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2004 has just begun. Are you ready to seize this new year, and grasp things never thought possible. Let go of the past, and the pain it may have bought. It is time to make the best of the present, to secure the future.

The 2004 Studmaster World Tour as of 11/25/03: Katuscon, Philly Gaming Classic (Satuday only), Anime Boston, Animazement Anime Next , Anime Expo, Otakon, Dragon*Con, Nekocon? Anime USA?, MagFest 3.0?

Last edited by Studmaster : 11-26-2002 at 01:46 PM.
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Unread 11-26-2002, 01:44 PM   #9
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Why is it a blow? Don't you want Tifa and Kitty-N to battle it out in Bust-A-Move? ^__^ v
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Unread 11-26-2002, 02:07 PM   #10
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Quote:
Originally posted by Rey-Rey
Why is it a blow? Don't you want Tifa and Kitty-N to battle it out in Bust-A-Move? ^__^ v
He makes a very good point. ^^
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Unread 11-26-2002, 02:11 PM   #11
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This is good news... The underdog buys out thier #1 contender. To me, the company should be called Enix Square. And now they're mergin with Namco? Whoa....

Thoughts:

Expect Cloud, Sepiroth, and Squall in Soul Calibur 3. =)
Tekken Fantasy RPG. =)
Extended 8-bit Theater. =)
Dark Lord Chaos and the Dragonlord in a new RPG... Dragon Final Quest Fantasy. =)
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Unread 11-26-2002, 02:19 PM   #12
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Nope. Namco isn't invovled in the merger, persay, however they are very friendly with the new company that will be formed (i.e. They will share resources if need be)

However, anything is possible at this point.

As for it, being a blow, I will explain later.
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2004 has just begun. Are you ready to seize this new year, and grasp things never thought possible. Let go of the past, and the pain it may have bought. It is time to make the best of the present, to secure the future.

The 2004 Studmaster World Tour as of 11/25/03: Katuscon, Philly Gaming Classic (Satuday only), Anime Boston, Animazement Anime Next , Anime Expo, Otakon, Dragon*Con, Nekocon? Anime USA?, MagFest 3.0?
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Unread 11-26-2002, 02:31 PM   #13
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In the details it states that Square still holds the majority of power in the merger. So we aren't going to see a sudden cancellation of key projects or anything.
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Unread 11-26-2002, 02:32 PM   #14
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Quote:
Originally posted by Ranma Saotome
This is good news... The underdog buys out thier #1 contender. To me, the company should be called Enix Square. And now they're mergin with Namco? Whoa....

Thoughts:

Expect Cloud, Sepiroth, and Squall in Soul Calibur 3. =)
Tekken Fantasy RPG. =)
Extended 8-bit Theater. =)
Dark Lord Chaos and the Dragonlord in a new RPG... Dragon Final Quest Fantasy. =)
LOL. Mishima Zaibatsu is the evil corporation in the next Final Fantasy. But yeah, Namco wasn't part of the merger directly.
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Unread 11-26-2002, 02:42 PM   #15
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Am I the only one who's nervous about this? It seems that post FF:SW, Square has been cutting corners to pull more profit (Read: FFX-2), and perhaps now they'll have a much larger operating budget, so they can take more risks again.

But -- there's also the possiblity that Enix will now be putting their 2 cents into ever Square game made ... and the overall quality of both franchises will diminish, only to have Square-Enix bought out by Sony, and forced into slave labor for one system.

Nervous,
MugenH.
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