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Tecmo Rejects Square Enix Offer, Moves Towards Merger with Koei

by Nick DiMola - September 4, 2008, 7:09 am PDT
Total comments: 18 Source: Kotaku

After careful consideration from management, Tecmo has decided against the Square Enix takeover and decided instead to group with the more Eastern driven Koei.

Tecmo, in a surprise move, has rejected the friendly takeover bid from Square Enix this morning. As reported earlier, Square Enix extended the offer to Tecmo last week and gave the company until today in order to reach a decision. Tecmo "collected opinions from management and game creators as well as a wide range of employees" to arrive at their decision.

Following the rejection of the offer, Tecmo announced a more preferable partner they planned on joining: Koei. Given the strengths of Tecmo in the Western market, Koei would bring the company full circle with a stronger presence in the Eastern market. Koei is best known for their Dynasty Warriors hack-and-slash series which retains a high level of popularity in the Japanese and Asian market as a whole.

According to Tecmo, both companies are on board for the merger and things should be moving forward in the coming days.

Talkback

Nick DiMolaNick DiMola, Staff AlumnusSeptember 04, 2008

Well I'm sure Square-Enix will be happy to get 2 for the price of 1 this time next year...

UltimatePartyBearSeptember 04, 2008

Well!  I did expect Tecmo to turn S-E down (no Squixmo for us), but I didn't expect them to run to someone else.  I guess Koei makes a good match in some ways, but this merger doesn't seem to me to provide the same benefits as the S-E offer.  It looks like Tecmo and Koei (Tekmoei?) are just trying to make themselves look big to scare off a predator.

NinGurl69 *hugglesSeptember 04, 2008

They should combine to make one massive money-losing Japanese publishing Voltron behemoth.

EnnerSeptember 04, 2008

With a transformation sequence that has enough lightning to fuel multiple Lords of Thunder games.

I don't see how much Koei will get out of a merger as I assume they make a tidy living off of the umpteenth Musou action game and Romance strategy game installment. Maybe they want to give Zhen Ji and Okuni breast physics or something.

Ian SaneSeptember 04, 2008

Ouch for Square Enix!  They just got the corporate equivalent of a girl rejecting you to go out with another guy.

Tecmo and Koei are like those two Japanese third parties that I forget exist half the time.  It's like the last and second last place teams merging together to be the last place team.  Wow.

You get this feeling though that someday the videogame industry is going to be like film and music industries where there's this handful of a big players and no one else.  Scary stuff.  This generation feels very much like the beginning of the end in many ways.  No necessarily the death of videogaming but clearly the end of an era.

KDR_11kSeptember 04, 2008

Quote:

You get this feeling though that someday the videogame industry is going to be like film and music industries where there's this handful of a big players and no one else.

Well, there's plenty of else and it's not that hard to enter the market. What keeps the music and film industry oligarchy so strong is that they control the primary "distribution" channels, TV and radio. Videogames are still primarily sold in stores where anyone can get something on the shelves without a real way to bribe them into an exclusive agreement (retailers tend to be larger than videogame companies while radio stations are smaller than music labels). Games also use the internet which, unlike TV and radio, don't use a controlled spectrum and anyone can add a website to the 'net while only a handful can set up a TV or radio station.

Also big companies are only really needed for blockbuster titles which Nintendo hurt badly with their disruption. If Sony and MS had dominated, sure, you'd see small players having little chance of competing but with the market being disrupted and allowing cheap games to beat out expensive "AAA" titles there's opportunities for new players again.

This is also how disruption kills the "videogame industry": The companies that refuse to adapt to the "crummy market of non-consumers" sit in a shrinking market, their profits go down while the costs go up, they need more strength to make another sustaining development and in order to keep making AAA games they merge together, then that game fails to make the money back and layoffs follow, shrinking the company and in the end it's as if one of the former companies had died.

THIS is the videogaming Nintendo is killing!

RABicleSeptember 04, 2008

tecmo, idiots.

Ian SaneSeptember 04, 2008

Quote:

THIS is the videogaming Nintendo is killing!

It sucks because I kind of liked this "making super awesome games" trend.  I don't understand why anyone supports this new direction as a good thing.

NinGurl69 *hugglesSeptember 04, 2008

Cuz HD versions of last-gen's super awesome games is not super awesome.

KDR_11kSeptember 04, 2008

Quote from: Ian

Quote:

THIS is the videogaming Nintendo is killing!

It sucks because I kind of liked this "making super awesome games" trend.  I don't understand why anyone supports this new direction as a good thing.

Epic, not awesome. Epic is Final Fantasy: Hours upon hours of plot, cutscenes, epic sights, etc. Awesome is Bangai-O Spirits: Looks like someone made it in his basement but is one of those "FUCK YEAH!" games. You can make awesome games in the new paradigm too, it's the epic games that are going away and quite frankly I won't miss them. Basically they make the gameplay and then spend 10-50 times as much money on making it epic (graphics, story, etc).

ShyGuySeptember 04, 2008

What does this mean for Itagaki?

This actually retains the independence of Tecmo and Koei if it goes through, at least for awhile. If Tecmo became part of Square they'd become a pure pawn of a specific big player, and just when they were starting to cozy up to Nintendo too.

I almost wish Nintendo would do something to help these smaller/midlevel companies remain independent.

NinGurl69 *hugglesSeptember 04, 2008

Like help them be unstupid?  Sorry, that's not in Nintendo's cards.

DAaaMan64September 04, 2008

Quote from: Kairon

I almost wish Nintendo would do something to help these smaller/midlevel companies remain independent.

LOL I can JUST SEE how wonderful that would go. &P

Bill AurionSeptember 04, 2008

Quote from: Ian

Quote:

THIS is the videogaming Nintendo is killing!

It sucks because I kind of liked this "making super awesome games" trend.  I don't understand why anyone supports this new direction as a good thing.

Hahaha, it's exactly Ninty's direction that that is trying to SAVE the industry...Or have you not noticed that the companies that are floundering around this generation are those that squander most/all their resources on the HD consoles?

DeguelloJeff Shirley, Staff AlumnusSeptember 04, 2008

Yeah seriously.  Nobody pointed a gun at any of these companies' heads and forced them to back the HD consoles before the Market chose Wii.

KDR_11kSeptember 05, 2008

Quote from: ShyGuy

What does this mean for Itagaki?

GAME OVER, MAN!

NinGurl69 *hugglesSeptember 05, 2008

Quote from: KDR_11k

Quote from: ShyGuy

What does this mean for Itagaki?

GAME OVER, MAN!

Win.

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