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Sony to invest in Square…

by Max Lake - October 9, 2001, 1:41 am EDT
Source: Bloomberg

…And the prospect of Square games returning to Nintendo systems once again looks quite unlikely indeed. UPDATE: A glimmer of hope?

There have been rumors flying that Square might be announcing some games for Nintendo systems in the near future, possibly as soon as the fall Tokyo Game Show. Although such reconciliation between companies has been looking increasingly likely, it now seems impossible. Sony has just invested in Square, planning to pay 14.9 yen ($124 million) for 19 percent of Square. This investment helps Square bounce back from terrific losses following the Final Fantasy movie but also practically ensures Square games won’t be appearing on anything but Sony consoles. From Bloomberg:

Tokyo, Oct. 9 (Bloomberg) -- Sony Corp. will pay 14.9 billion yen ($124 million) for 19 percent of Square Co., the creator of its best-selling `Final Fantasy' video game, which is reeling from losses because a movie spin-off flopped.

Sony Computer Entertainment Inc., the company's game unit, will pay 1,330 yen a share for 11.2 million shares, making Sony the second-largest shareholder after the company's founder, Square said in a statement to the Tokyo State Exchange. The price, almost 18 percent below today's last trade, is the average for the three weeks ended Oct. 5.

The purchase might extend Sony's hold on the Final Fantasy franchise, helping it fend off rivals Nintendo Co. and Microsoft Corp. The 10 versions of Final Fantasy have racked up 33 million in global sales, among the most of any console-based game.

Square said last week it will write off 10.7 billion yen, or about 75 percent of its investment in ``Final Fantasy: The Spirits Within.'' The computer-animated space adventure, which was released in July, took in about $32 million at the U.S. box office, far below its estimated $135 million budget.

UPDATE: It is still possible we can expect multi-platform announcements from Square in coming days. PGC ran the Sony / Square news shortly after it broke and did not catch subsequent statements, found in this Reuters story. According to a Square spokeswoman, Square approached Sony last month about making the capital injection. Meanwhile, a Sony spokeswoman said that Sony does not intend to prevent Square from contributing games to rival game makers such as Nintendo Co Ltd or Microsoft Corp.

Square’s president, Hisashi Suzuki added this: ``We are not necessarily obligated to Sony, because of this deal. But we can gauge the situation in the future and offer software to the best selling hardware maker, and at this time there is no doubt that Sony is the best.”

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