You guys don't seem to understand and this is one of the reason why the internet is misleading especially when it comes translation and such. That's why I don't really trust this Square Enix thing either (most likely some article clickbait or poor translation and speculation). So rumors, leaks, translations and such aren't supposed to be taken seriously, my comment as well, really, but the internet thinks otherwise and places like twitter gets heated up for no reason. 

The reason why this "japanese government prohibits western yada yada..." started in the first place is most likely because there is a whole event of history behind this and someone just summarized it, passing information with different nuance. Japan usually has multiple holders, trust banks holding a major public company's stock, that's why major JP publishers aren't acquired easily by foreign companies. Even companies or people inside Japan could be difficult depending on the situation, so forget Microsoft, Disney, Tencent, it wouldn't be easy for Sony either. If Square Enix really wants themselves bought, it could be easier, but looking at this situation, they are talking about their studios so it seems like a Warner Bros Game type of situation. Now the studios @twintail mentioned are all small/private ones so they can be "acquired" normally even if outside of Japan.

A lesson on takeovers. There are typically 3 types, mergers, acquisition, and hostile takeovers. There is agreement on both sides if it's an acquisition or a merger. Example of acquisition Microsoft buying Activision Blizzard, example of merger Square merging with Enix. Hostile takeovers are basically what Elon Musk tried to do with Twitter. The company's board of director rejects the offer, but is still forced upon. You can force a takeover, but it does require an agreement with the shareholders. It becomes a lot more complicated. There is a whole lot of process with an acquisition just like what Microsoft is going through rn with Activision Blizzard, but hostile takeovers could be even more challenging. That's why most company owners hold on to the majority of the stock to avoid these issues. You can't just perform a hostile takeover on Nintendo or like The Pokemon Company (which is even more complicated) because they hold majority of their shares, obviously it won't go through. You can invest on Nintendo because they are a public company (like what Saudi did *cough *cough) but acquiring is a whole different story. TPC is private so it would be close to impossible to invest on them. Hostile takeovers are not possible with private companies, so like Valve is also not available unless with an agreement (acquisition). We got to see that with Sony and Bungie where a private company was acquired. Bungie is a good example here because they used to be a part of Microsoft, and then became private, then bought by Sony. Square Enix sold off their western studios similarly to how Microsoft let go of Bungie but instead of going private, Embracer Group scooped them up. So with that in mind, it's not impossible to acquire JP companies if they want to be sold, but we know it is quite difficult because major shareholders are JP trust accounts.

Majority of people on the internet are sciolist. Keep that in mind. Typically we are consuming false/lack of information like propaganda. 

These are small companies. Square Enix is way bigger than all of these. With bigger companies like SE the government would prevent a total buyout by foreign companies. Sony is a Japanese company though, but I personally still seriously doubt they are going to buy SE.

SE has one of the most valuable IPs popular in Japan. They even used Dragon Quest music in their Tokyo Olympic opening ceremony. I would be surprised if they didn't care about Square Enix. 

1. Both are JP

2. Has a good relationship for a long time

3. Many "big" franchise exclusives

4. Some "rumors" hinting they are both interested such as SE selling off western studios "to kill of dead weight", "credible people" claiming Sony was interested in SE, SE looking to sell shares of their studios? Jim Ryan (CEO of SIE) claiming they are still going to acquire more.

I'm guessing people are pointing at somewhere along these and I don't think they are unreasonable. 

If Sony were to purchase Square-Enix, would all there IP be elusive to the Playstation? Games like Bravely Default, Trials of Mana and the HD-2D games sell very well on Switch. They are in that AA mid-budget tier and I'm sure the profit on those games help fund the bigger games like Final Fantasy.

If Sony buys Square Enix, it will be to strengthen themselves on the Japanese front(Why SE is getting rid of their western studios. Sony does not need those). Sony buying Square Enix is to fight Nintendo. This is the only real reason that Sony has to outright buy Square Enix. Microsoft is not affected by this move at all. I think there is a higher chance that SONY would release on XBOX if they were to decide that. 

As a primarily PC gamer, I wouldn't mind Sony buying Square. It's a good fit for Sony anyway for a few reasons.

1) I associate Square games primarily with Sony anyways
2) Hopefully Sony will get Square to make actually GOOD PC ports!!!!
3) It shores up two of PlayStations arguably weakest first-party genres, RPG and Strategy

I hope a purchase would result in faster development. FF6, 7, 8, 9, 10 were the best ones for me. And they were often apart by only one year. I hope for former glory.

I totally agree.

Just a point of clarification, a purchase of EA (or even Take Two) is kind of out of the question for Sony. Sony has a market cap of $110 billion (B) while EA has a market cap of $37B. While yeah, Sony is bigger, they are spread out over multiple divisions, so SIE is probably about as big as EA if it wasn't part of the whole of Sony, or at least in the same ball park. For comparison, Microsoft's market cap is $2 trillion while Activision, currently, is $60B, which is why they can buy them up. Square Enix is 745B yen, and when converted to dollars, it about $5B. So, its much more do-able. Again, still difficult for Sony, but possible. This is all before considering any premium the buyer has to pay. 

That said, I agree with the rest of your post. I think the fact we are seeing consolidation (as you noted) really means anyone is up for grabs. I don't think a lot of people figured Square would sell of Eidos. I think talks of Sony buying Square also come down to the companies long relationship and the fact that Sony kind of needs to make a big acquisition. Square is kind of in the ball park. The problem is really going to be the money as Sony isn't very liquid and 5B plus whatever over they pay is a pretty steep asking price. If it does happen, then it would probably be the end of Sony's game acquisitions.