Isle firm’s parent TOKYO >> Square Co., a Japanese videogame maker, expects to conclude an agreement with a U.S. company to sell its Honolulu-based moviemaking unit in the next three months.
may sell movie studio
After its 'Final Fantasy' movie's
lackluster box-office performance,
Square is in talks to sell the
Honolulu unit to a U.S. companyStar-Bulletin staff and wire reports
The Tokyo-based company, which makes video-game software for Sony Corp.'s PlayStation 2 console, is in talks to find a buyer for part or all of its stake in its movie production unit in Hawaii by the end of March, Square President Yoichi Wada said.
Square said in October it would withdraw from the movie business after its first feature-length film, "Final Fantasy: The Spirits Within," recouped only about a third of its costs.
Square USA employs a staff of 125 in Hawaii and has leased offices in downtown Honolulu for more than four years. At the height of the "Final Fantasy" production, the company had about 220 employees here.
In October, local officials indicated the Hawaii studio would remain open as long as it was not a financial drain on its Japan parent. Square Co. has "no plans to sell the Hawaii facility or shut us down," said "Final Fantasy" producer Jun Aida in an October story.
The sale is part of Square's efforts to focus on developing video games after posting a &YEN13.3 billion ($107 million) loss in the movie business in the six months ended Sept. 30. Investors say the maker of Final Fantasy games may not be able to increase game sales fast enough to improve earnings after shedding the movie unit.
"Investors are not likely to turn into buyers (of Square shares) because they are concerned over the company's finances," said Yoshio Inamura, who manages &YEN40 billion in investments at Tokyo-Mitsubishi Asset Management Ltd.
Square reported a loss in the half year after "Final Fantasy," which cost $135 million to produce, failed to meet revenue targets.
"We can't maintain our commitment to the studio in terms of money and manpower," Wada said. "The best case scenario is for us to maintain a minor stake and to continue using the business' computer graphics technology with a fresh input of funds."
The Hawaii studio is fully owned by Square. Wada declined to name the U.S. companies with which Square is discussing the sale or if the company is holding talks with one or several companies.