Square Enix in Negotiations For Chinese Expansion

Company hopes to further expand overseas sales, but does not plan additional acquisitions.

2009-09-29 13:24 / Anoop Gantayat / Comments

Yoichi Wada (third from the right) takes part in a panel discussion at the Tokyo Game Show.

Square Enix Holdings CEO Yoichi Wada has in the past expressed an interest in making a push into the Chinese market. In an interview with Reuters dated the 28th, he shared more details on those plans.

Wada told the news service that Square Enix has begun negotiations with a number of Chinese companies with the aim of making a push into the Chinese market. The company hopes to offer downloadable software to gamers in China.

Square Enix currently has an office in Peking staffed with a few dozen employees. This branch ofers games for online download. Sales have failed to cross the ¥300 million mark.

Wada believes that in order to properly expand into China, it is necessary to form a tie-up with a local firm. He envisions collecting royalties on titles and also teaming up with partner companies for development.

This is the latest in a string of business deals that strengthen Square Enix's overseas operations. Earlier this year, the company made Tomb Raider publisher Eidos into a subsidiary.

Wada told Reuters that within five years, it hopes to make overseas game sales account for 70 to 80% of total game sales. Currently, the figure is 50%.

In its move into China, it appears that Square Enix won't be making any acquisition or merger moves similar to the Eidos deal. Wada said that he doesn't foresee such moves for the next one or two years. in additon to being in the middle of managing the Eidos deal, China has limitations in place on foreign investments.