Square Enix, the Japanese game company best known for complex role-playing narratives and cosplay inspiration, is looking to expand their extensive catalogue of properties through the "friendly" acquisition of Ninja Gaiden II and Dead or Alive 4 publisher Tecmo. The acquisition comes at a precarious time for Tecmo who find themselves embroiled in two high-profile lawsuits regarding unpaid compensation to employees.

Screenshot from Square Enix's upcoming RPG Final Fantasy XIII.

The proposal submitted to the board of directors of Tecmo by Square Enix includes an Y11 billion (GBP50 million) takeover bid and a deadline for response of September 4th, after which the proposal will be withdrawn.

In a press release regarding the proposal Square Enix states:

"Video games have been globally recognized as a major entertainment genre, and have now become an industry receiving considerable attention in terms of its market size and growth potential. In the meantime, the game industry in Japan is standing at a critical juncture whether it continues to be a center of the video game industry in the world, or not."

"TECMO is a group of excellent creators with proven track-record in the global market, which is a precious human resource of Japan. We, however, cannot be optimistic about the future of this significant resource, given the current circumstances surrounding TECMO."

The statement refers to Tecmo's recent legal trouble surrounding the lawsuit filed in May by Dead or Alive and Ninja Gaiden series creator Tomonobu Itagaki for unpaid completion bonuses on Dead or Alive 4. A month later a separate lawsuit against Tecmo was filed by Ninja Gaiden II Lead Engineer and Tecmo Labor Union Leader Hiroaki Ozawa and Ninja Gaiden II Level Design Lead Tatsuki Tsunoda for unpaid overtime during the development of Ninja Gaiden II. The second lawsuit also suggests that Tecmo falsified statements and deceived their employees in order to withhold compensation for some 100 hours of overtime.

Screenshot from Tecmo's recently released Ninja Gaiden II.

Tecmo President Yoshimi Yasuda - who is named in Itagaki's lawsuit as a defendant - recently announced his intention to resign as president of the company for "personal reasons." Chairman Yasuharu Kakihara will assume Yasuda's position on September 1.

With console RPG pillars like Final Fantasy and Dragon Quest in their stable Square Enix could be looking to acquire established Tecmo action franchises Ninja Gaiden and Dead or Alive to broaden the company's suite of strong IPs. Tecmo recently released Ninja Gaiden II to favorable reviews but their pipeline of upcoming titles (Tecmo Bowl Kickoff for the Nintendo DS, Fatal Frame: Mask of the Lunar Eclipse for the Wii and Rygar: The Battle of Argus also for the Wii) doesn't show a lot of blockbuster potential.

Considering Tecmo's legal woes and lack of premiere titles in development the offer from Square Enix might look too good to pass up.

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