Square Enix Holding Co. is currently trading near the lowest levels the company has seen since the merger in 2003. I don’t know if investors believe its growth profile is weak, if its current problems with FFXIV are overshadowing other parts of the company or the general decline in console gaming revenue but whatever the reason the stock is cheap. With Kaz and Sony's refocus back onto gaming, I think it would be a beneficial for Sony to pick up a major Japanese 3rd party company to help secure better first party titles and at the same time undercut its major competitors. With Sony holding a 8.25% stake in Square Enix already, I think this company would best fit that profile.
Square Enix current investment structure places Sony 4th in terms of ownership with the owners of Square Co and Enix having a combined 26%. The other 66% are owned by major foreign and domestic investment companies that I believe Sony would have no trouble getting their portion (due to its bad performance especially the past four years). Sony would only need ~43% to get the 50.1% needed for ownership.
There would be positives and negatives to the transactions but I feel the positives would outweigh the negatives.
A positive would be a boon to Sony’s first party profile. Adding Final Fantasy, Dragon Quest, Kingdom Hearts, Hitman, Lost Cause, Sleeping Dogs and Tomb Raider to its list of current offerings would put it up there with the upper elision of developers and better help stabilize its handheld business. A majority of its titles have sold extremely well on PlayStation platforms.
The biggest negative I see would be a brain drain. I feel that a potential takeover would result in some talented people leaving the company (along those who have already left) meaning that the soul of its games would be missing.
