Computer unit buys into vidgame publisher
HOLLYWOOD — Sony said Tuesday that it will inject more than $124 million into Square, the Japanese vidgame publisher behind the popular “Final Fantasy” franchise, in an effort to guarantee itself a strong lineup of titles for its PlayStation 2 system as the console wars heat up.
Under terms of the deal, Sony Computer Entertainment will buy 11.2 million shares in Square at $11 per share, an 18% discount on the stock’s Tuesday closing price of $13.50.
Once the deal closes Oct. 26, Sony will become the second-biggest shareholder in Square, with an 18.6% stake (It previously had no stake in Tokyo-based Square.) A representative for the videogame maker said that the company approached Sony last month about the capital injection.
While the deal does not exclude Square from creating vidgames for other gaming platforms, the investment does encourage Square to create titles for the PlayStation 2. Pact also pairs Sony and Square to create a series of online games.
“We are not necessarily obligated to Sony because of this deal,” Square prexy Hisashi Suzuki said. “But we can gauge the situation in the future and offer software to the bestselling hardware maker. And at this time, there is no doubt that Sony is the best.”
The investment comes only weeks before Nintendo’s next-generation GameCube and Microsoft’s first gaming unit, the Xbox, hit store shelves. Both systems are trying to steal market share from PlayStation, which currently dominates the console market.
“Square is a splendidly creative game software maker with a brilliant history… and we are positive that they will make more and more great games for us in the future,” Ken Kutaragi, prexy of Sony Computer Entertainment said.
Square has sold 35 million units of its “Final Fantasy” franchise, many of which are for the PlayStation format. Company is readying to release the 10th game in the series.
The announcement follows Square’s announcement that it will no longer produce films after the B.O. failure of its first production, “Final Fantasy: The Spirits Within.” Square invested $140 million in the Sony-distribbed pic, which has grossed $72 million worldwide since its release this summer.