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Japan’s Square Enix, a major video game company that just published a reboot of Tomb Raider, announced a big restructuring today. GamesBeat has learned that it has sold off four free-to-play games to Sleepy Giant Entertainment, a startup with a considerable amount of funding.
Sleepy Giant raised $100 million from TPG Capital, the private equity firm run by financiers David Bonderman and James Coulter, and Evolution Media Capital. It’s not clear which titles Square Enix has sold, but it evidently has lost its appetite for launching the free-to-play titles on its own. Square Enix is a major publisher of hardcore games such as the Final Fantasy series.
The companies have not announced any deal yet. We’ve queried Sleepy Giant for a comment. A spokesman for Square Enix said, “We don’t comment on any details for external development deals.” But multiple sources familiar with the matter confirmed that Sleepy Giant has picked up four unannounced Square Enix games.
Meanwhile, Square Enix formally revealed on Monday evening (U.S. time) that its digital entertainment business will fall substantially below revenue expectations due to slow sales of major console games in North America and Europe. The company said it is “also experiencing sluggish performance of its arcade machine business.”
Square Enix expects a loss from restructuring in the fiscal year ending March 31. The company said it plans to implement “major reforms and restructuring in its development policy, organizational structure, some business models, and others.” It expects a loss of 10 billion yen, or $105 million, from its restructuring charges. The extraordinary downturn includes a loss on disposal of content of $42 million and on evaluation of content of $42 million, and other losses of $21 million.
Square Enix said that it still is operating some free-to-play titles. The company has dozens of free to play games on the PC web browser lie Gameglobe, Heroes & Generals, and core online initiative and titles that are specific to Japan and Asia. On mobile platforms the company operates games such as Drakerider, Final Fantasy Dimensions, Guardian Cross, Symphonica, and more.