FINAL FANTASY CAPTURES LARA CROFT: ACQUISITIONS AND ALLIANCES IN ELECTRONIC GAMES

Square Enix chose to make alliance in some occasions and acquisitions in others depending upon the needs and the situation of the game developer company. It is based on the environmental conditions in which the CEO thinks will work for the company best.

In the presence of a stiff competition, it is a high urgency to expand since Square Enix’s goals could not be reached by focusing only in the current market. The easiest and better way is by acquisition. It’s not difficult to take control an acquired entity unlike in alliances. Acquisition of British Eidos Group Company enables Square to expand market internationally. In the other hand, valuation for acquisition on tangible asset like Eidos Group studio is easy. Moreover, it expands more markets outside Japan.

Because of high level of uncertainty present in the new markets for instance in the US, it’s wiser to make ally with a stronger partner than to acquire the company and take the whole risk. Through this, Square may possibly attract and expand a new market with more confidence. Square Enix can also benefit by having access to different game markets from the allied companies.

Depending upon the situation, sometimes acquisition let companies gain a wider access to geographical markets greater than alliance or do-it-yourself strategy. In some other instances alliance enables companies to share the potential risk and minimizes any chances of carrying possible problems those unsuccessful operations may