Hitman games' future in question as Square-Enix looks to sell IO Interactive studio

Video game publisher Square-Enix is divesting itself of the studio behind 2016's sleeper hit Hitman, leaving the future of the series in question.

The Japanese company announced earlier in May that it "has regrettably decided to withdraw from the business of IO Interactive A/S," taking what it described as an "extraordinary loss" of $59 millionas a result.

Square-Enix said they were talking with potential investors interested in buying the Danish-based studio.

Layoffs at IO Interactive soon followed.

In a transcript of the financial call released this week, Square-Enix president Yosuke Matsuda said that the Hitman franchise might survive if they successfully sell IO Interactive.

IO Interactive has been making games in the Hitman series, starring an assassin namedAgent 47, since 2000. It was acquired by publisher Eidos Interactive in 2003, which was itself bought by Square-Enix in 2009.

The 2016 Hitman reboot won wide critical praise and was included on many Game of the Year lists. It was praised for the wide variety of missions, locationsand deadpan humour as the non-emotive Agent 47 was featured in increasingly absurd situations akin to a Naked Gun film.

Matsuda said that the selling off of IO Interactive was part of the publisher's larger strategy to "concentrate our resources in order to strengthen our development capabilities."

Despite the loss associated with selling off IO Interactive, Square-Enix still reported net sales of $3.1 billionin its fiscal year ending March 31, 2016, up 20 per cent from the previous year.

It attributed the increase to high sales of games like Final Fantasy XV, Rise of the Tomb Raider and Nier Automata.

Final Fantasy VII Remake brought in-house

Square-Enix also announced this week that it will be bringing development of its upcoming Final Fantasy VII Remake in-house. The company was working on the game in tandem with CyberConnect2, which has worked on Naruto and JoJo Bizarre Adventuregames, as well as the cult favourite Asura's Wrath.

"This company decision was made wanting to control quality as well as keeping the schedule stable," said Square-Enix developer Naoki Hamaguchi during a Japanese-language YouTube stream (translated by Kotaku's Brian Ashcraft).

Originally released in 1997 on the Sony PlayStation, Final Fantasy VII became one of the most successful and popular games of all time, selling over 11 million copies worldwide. The remake was announced at Sony's E3 industry press conference in 2015, but little information has surfaced since then.

Hamaguchi said he has "taken over the development side" of the remake. Tetsuya Nomura and Yoshinori Kitase, who both worked on the 1997 original, are currently listed as lead director and producer, respectively.

Long development cycles

Square-Enix has had a history of abnormally long gestation periods for its marquee titles, especially its flagship franchise, Final Fantasy and related properties.

Final Fantasy XV launched in late 2016 after nearly a decade of development, and Kingdom Hearts III, a Final Fantasy-Disney crossover game, is set to follow up from 2005's Kingdom Hearts II.

During the financial report, Matsuda said he expects to launch Kingdom Hearts IIIand Final Fantasy VII Remake "in the next three years or so."