Rebirth Tokyo 1986

Chapter 316 Acquisition of Square
The development of the world is not subject to anyone's will.

After the mourning, whether true or false, is over, everyone continues to live their lives as usual.

The same naturally happened to Masato Takeshita, who continued to attend various parties and dinners.

After being busy for several days, he finally had some free time and began to implement his plan.

It was a simple private dinner for two. As the host, Takeshita Masato greeted them with a smile: "Welcome, welcome, Senior Miyamoto, let's sit over here."

"You're welcome, junior. I'm sorry to bother you then."

"No, it's me who disturbed you by inviting you suddenly."

After some simple courtesies, the two began to chat while eating.

Together, they complained about the messy clubs at Waseda University and all the weird things that happened during their student days. As they criticized their alma mater in various ways, the two naturally became more familiar with each other.

Seeing that Takeshita Masato was still hesitant to speak, Miyamoto Masashi took the initiative to ask, "Takeshita-san, you suddenly came to me this time. Is there something important you need to discuss?"

"I do have something I want to trouble you with, but I don't know if it's appropriate."

"I will definitely help if I can, just say so."

The young man quickly said, "Thank you. Then I will ask directly. Senior, have you resigned from your official position at Square and delegated the management power?"

"Yes, I think the gaming industry is too influenced by the platform and it is difficult to have a great future."

Masashi Miyamoto is not optimistic about the long-term development of third-party game companies because the ceiling is too low.

It can be used as a money-making machine, but it cannot be regarded as the focus of your career.

"That's it."

Masato Takeshita felt secretly delighted, knowing that his chance had come.

But he didn't show it on his face, instead he sighed softly.

"I didn't expect that my senior brother is not optimistic about the development of the gaming industry."

Masashi Miyamoto shook his head. "It's not that I'm not optimistic. I just think that if a game company doesn't develop a console, its ceiling will be obvious."

Square Enix has grown a lot, and Final Fantasy 6, launched this year, has sold nearly 8 million copies in 300 months.

The profit is just very slim, and the bulk of the money is earned by Nintendo and the game cartridge production, transportation, and sales alliance controlled by Nintendo.

As the game developer, Square Enix only got less than 20% of the profits in the end.

Because of this, Masashi Miyamoto chose to delegate power to his subordinates and focus more on running the family company Denyousha.

Third-party game companies are just puppets of game platforms.

In comparison, Star Ocean Games was much more comfortable. Thanks to Soviet Cube and its president Rogers, they got very good conditions.

Not only can we produce the cassettes ourselves, but the sales commission is also not that high.

Other companies take a 40% commission, but Star Ocean Games only takes 25%, so the gross profit is about 45%.

This is roughly the sales distribution ratio that can only be achieved due to the rise of Sony's PS series of game consoles and the fierce competition among multiple console companies.

"Nintendo's cut from ordinary companies is indeed a bit high."

The cassette issue was outrageous, and the sales alliance they formed was even more outrageous.

There is no sales channel that can take almost 40% commission.

Nintendo's greed has offended almost all third-party game companies.

A large number of game companies in North America have already risen up in resistance with the help of Sega game consoles, while the situation in Japan is still brewing.

"Yeah, it's too high. But even so, games are still very profitable. Games that cost millions or tens of millions to make have the chance to make tens or even hundreds of billions."

Having said that, Miyamoto Masashi paused slightly and couldn't help but look at the young man with envy.

The games he was talking about were Soviets and Street Fighter 2.

Especially "Soviet Tribe", which had almost no research and development costs but made tens of billions of yen.

Of course, Street Fighter 2 is generating more profit right now.

But the R&D investment is also high, so judging from the multiplier alone, it is not as good as "Soviet Cube".

Masato Takeshita nodded in agreement, "Yes, this has always been the case in industries that test creativity."

The creative industry is the easiest industry to make a big profit with a small investment.

The simplest thing is the pattern design, a Hello Kitty with a full sense of girlishness, which helps Sanrio earn a lot of money every year.

Games are also a creative industry. There is a lot of money to be made by designing clever and classic games.

"I also think that the upper limit of making games alone is very low, but the console industry is too difficult to enter, so I chose to develop horizontally. Combining games, music, movies, animation and other related industries together will make more profits."

The console industry is really difficult to get into. Giants like Panasonic and NEC are jealous of the profits from console games and have tried to enter, but all ended in failure.

There are also a large number of third-party companies in the gaming industry that have tried, Namco and SNK are typical examples, but they didn't create any sparks.

Relatively speaking, horizontal development can produce good results.

For example, Enix later achieved quite good results in the comics field.

The company's most well-known comic, "Fullmetal Alchemist", has sales of over 7000 million, which is a sales volume that can only be achieved by first-tier works.

"Forget it. I don't have that much energy. This is good enough for now."

Masashi Miyamoto doesn't have high demands on Square. As long as it doesn't lose money every year and can make him stable profits, everything will be OK.

"Yeah, the Electric Friends Club alone is busy enough. I'm pretty much in charge, and I basically leave the gaming affairs to Rogers."

The two chatted about the game for almost two hours.

Seeing that an expression of impatience began to appear on Miyamoto Masashi's face, Masato Takeshita stopped beating around the bush.

"It's like this. I met with Senior Brother Miyamoto today because I have something small to discuss."

"Well, you said."

Masashi Miyamoto did not rush to express his opinion and pretended to continue listening.

The young man was also very straightforward and directly stated the purpose of the banquet.

"We, Xinghai Entertainment, are ready to flourish in the entertainment field."

“For example, in the animation industry recently, we have acquired six or seven production companies.”

“In terms of books, comics, and movies, we are actively acquiring Tokuma Shoten.”

“We are not making big moves in the music sector, but we are also planning to acquire several artist agencies and small record companies.”

"As for games, Square Enix is our most promising target. We at Xinghai Entertainment want to achieve controlling stake in the company. What does that mean, Senior Brother?"

"Holding Square Enix."

Masashi Miyamoto had already expected this, but when he suddenly heard his junior say this, he couldn't help but frown.

He still has a lot of feelings for the company he founded and hopes it will remain in his hands forever.

However, thinking about the nature of the gaming industry, he became hesitant.

Companies in the creative industry can grow very quickly, but can also decline very easily.

Not to mention foreign countries, just Japanese game companies. Taito, which first rose to prominence with "Space Invaders", is now basically living off its past glory.

If no more popular games appear, it will be acquired or go bankrupt sooner or later.

He doesn't want Square to become like Taito and Hudson in the future.

Having made up his mind, Masashi Miyamoto bit his lip and raised his head.

"Okay, I'm willing to give up the controlling stake. But if Square wants to raise funds, it must get my consent."

He was worried that Xinghai Group would use its financial advantage to overthrow him and turn him into an insignificant minority shareholder.

The young man readily agreed, "No problem."

Masato Takeshita only wanted to gain control, and never thought of going all the way. Square Enix was not worth sacrificing the goodwill he had accumulated over the years.

Even if it's Nintendo or Sony, it won't work either.

A person's reputation is valuable. It is valuable while he is alive, and even more so after he is dead.

“Also, I hope to retain the company’s management.”

"That's no problem. Square's management is doing a great job, and we won't get involved in the day-to-day management."

As long as you don't get involved in the film industry, everything will be fine.

Square Enix currently only has two shareholders, so the relevant discussions were completed quickly.

In the end, the two reached a simple negotiation, and StarCraft Games became the parent company of Square and owned 70% of the company's shares.

Masashi Miyamoto became the company's second largest shareholder, owning 30% of the shares.

"Mr. Rogers, Square has agreed to our request for controlling stake. Everything from now on is up to you. Don't worry about the premium."

Square's game IP has already gained very good popularity.

Although its earning power is not as good as Dragon Quest, and the same is true of its influence in Japan, in the Western market, the Final Fantasy series is the representative of Japanese RPG games.

This will be conducive to Xinghai Entertainment's expansion in the European and American markets.

Spend a little more, it's definitely worth it.

This is also a feature of the gaming industry. Acquisitions of gaming companies with well-known IPs almost always require a premium.

The most sensational thing was Microsoft's acquisition of Blizzard in later generations. Blizzard had already gone downhill, but it still demanded a huge premium.

"Don't worry, I understand."

Rogers was also very optimistic about Square's development and had always wanted to acquire it.

Now that the opportunity has come, he will not miss it because of stinginess.

"Ah That's good."

He is still very confident in Rogers' ability to do things, which is generous and careful.

In the past, Nintendo was able to obtain the copyright for the "Tetris" console and handheld game mainly because of Rogers' excellent observation skills and generous personality.

If he also keeps searching and picking, and the process takes too long, Nintendo will miss the opportunity to control the game.

On the StarCraft game side, Masato Takeshita met with Rogers, while on the Square Enix side, Masashi Miyamoto met with Hironobu Sakaguchi.

"Boxin, I am ready to give up my position as the company's major shareholder."

"???"

Hironobu Sakaguchi fainted. Did something happen that I don't know about?
He was anxious and couldn't help but stand up and ask, "What happened? Why are you selling the company so suddenly?"

"The company is doing very well right now, and the Final Fantasy movie that was released not long ago was also a big hit."

Masashi Miyamoto doesn't take care of things. As Square's number one employee, he is the biggest boss in charge of the company's daily management.

If new shareholders come, won’t all their rights be lost?

"It's not a management issue. I have no intention of running the gaming industry right now. I want to find a reliable backer for the company."

"You are also familiar with the new major shareholder, it is Xinghai Games."

Masato Miyamoto was very tolerant and friendly towards Hironobu Sakaguchi because he was not only the company's first employee, but also the key to the development of Square.

That desperate gamble not only saved Square Enix, saved Hironobu Sakaguchi, but also saved Masashi Miyamoto.

It was thanks to Square's development that he was able to smoothly secure his position as the president of Dianyousha.

"Star Ocean Game?"

"Yes, it's the company's second largest shareholder, Xinghai Games."

Masashi Miyamoto nodded and continued.

"I met with Masato Takeshita yesterday and reached a new agreement on the development of the company. In the future, Square Enix will be controlled by Star Ocean Games. But don't worry, they have already guaranteed in the contract that the management and business model will remain unchanged."

"As long as your plan is beneficial to the development of the company, there will be no obstacles."

He was also moved by the fact that Masato Takeshita promised to maintain the company's management unchanged.

He didn't want to see his old subordinates being marginalized or frustrated.

"This……"

Seeing Sakaguchi Hironobu's uneasiness, Miyamoto Masashi continued to comfort him.

"Don't worry, we are all smart people. You are the soul of the company's development. They won't touch you."

The Final Fantasy series was completely developed by Hironobu Sakaguchi.

The company can't lose anyone, but it can't lose this great director.

"Understood. I will stabilize the company's order."

"Ah That's good."

After watching the president leave, Hironobu Sakaguchi returned to his office with a serious expression.

Then he turned around and went to the office of President Tomoyuki Takechi with a worried look on his face.

"Zhixing, the president is ready to give up his position as the major shareholder, and Xinghai Games will take over."

"What, how could this happen?"

Tomoyuki Takechi also found it hard to accept and didn't understand what was going on.

"Maybe the president is tired and wants to find a good next home for us."

"They have agreed not to interfere in the daily management of the company. We are still responsible for the company."

Hironobu Sakaguchi was in a bad mood, but even so, he still didn't complain.

He loves this company very much; this is where his dream began.

"Well, I hope so."

Now that things have become a foregone conclusion, we can only choose to accept it.

Xinghai Games should be a good choice. At least this company was the second largest shareholder of Square Enix earlier, and it knows games very well and will not mess around.

"Of course, that's what the president said."

"Alas, how could things be so simple?"

What's the point of agreeing to it? The major shareholder has countless ways to circumvent the contract.

I can only hope that Xinghai Games abides by the rules and does not abuse its power. Of course, I must also act prudently and not give Xinghai Games any chance to take advantage of me.

After listening to his old friend's talk about several simple ways to circumvent the contract, Hironobu Sakaguchi realized that he was thinking too simply.

But now that things have come to this, there is nothing these employees can do.

After communicating with Tomoyuki Takechi, the two decided to hold a small high-level meeting to inform everyone that the company was about to be acquired.

Everyone was shocked, but quickly chose to accept it.

Some people were even secretly delighted.

With the support of StarCraft, everyone doesn't have to worry about work even if Square is in recession.

In addition, as members of the gaming industry, many people envy the generous treatment of Star Ocean Games.

Especially the huge bonuses after a game is successful in the market make every game practitioner envious and jealous.

Thanks to this, Star Ocean Games has attracted a large number of high-end talents.

(End of this chapter)