“driven by concerns that the titles cannibalized sales of the rest of the group and so it could improve capital efficiency” - Their explanation for why the sold Edios.

da may no cents.

May 2013 - Square Enix said despite a "high critical acclaim" for each title, sales still came up short. In particular, the publisher called its North American sales force "ineffective," noting that title sales in this region made up just a third of the number of units sold in Europe

2019 - "Meanwhile, while we released “JUST CAUSE 4,” we sold fewer units on launch than we had anticipated and were therefore unable to offset charges such as the amortization of development costs. " - Square Enix, during their investor call today.

5/2022 Square Enix claims that the underperformance of Marvel’s Avengers and Guardians of the Galaxy lost them $200 million. The company famously reports almost all of its western games as failures.

They have never had anything positive to say about their western studios sales... so how are they all of a sudden strong enough to be cannibalizing the rest of the group?

They are selling their western studios to be a Japanese focused development studio for their buyer *coughsonysough*

100% but does Sony even need to buy SE for that reason? The IP practically is bought and paid for at this point.

Unless that could be a reason why SE keeps trimming down and seemingly appears to want to trim down even more. Cheaper to purchase.

This doesn't really make sense. I sense some translation issue or missed information. David Gibson is not a reliable source so we might need to check the actual source which is currently no where to be found

Not just cheaper but easier. I think SE is slimming down to avoid the problems MS is going through when purchasing a publisher with to much shit attached to it. Multiple agencies are involved with the Activision buyout slowing it all down.

Sony bought and then closed the Bungie deal relatively quickly. They want it to be the same for SE

I hope SE doesn’t sell, but if it happens, I would like Nintendo to make a play for Dragon Quest, though.

Definitely not would happen. What is the point of buying Square Enix if Final Fantasy, Kingdom Hearts, and Dragon Quest don't come with it? 

In this day and age? Absolutely.

Microsoft opened the floodgates with their publisher acquisitions. Even if they stop at Activision Blizzard, Amazon, Tencent, Disney, won't. 

Given Sony's westward shift I could see a scenario where they'd drop Dragon Quest to make the process simpler. 

I can see Sony paying $5 Billion to get them.

Exactly, some people are thinking that DQ wouldn't be part of the deal if it went through. Sony knows how valuable that IP is in Japan and would likely take it as well. Yuji Horii's company, Armor Project is also partly owned by SE as they have quite a few shares in his company along with publishing contract rights and assets such as engine design, concepts and artwork. The relationship with SE and Horii is very strong and an acquisition by Sony would not break that. They certainly wouldn't just drop DQ off to Nintendo beforehand as that would make no sense, Sony is looking for SE Tokyo as a whole according to the rumor.  They are not looking for a westward shift in this because if they were, they would have picked up CD and Eidos back in April.