Final Fantasy Maker Square Enix confirms focus on blockchain games

Although crypto markets remain down and many video game enthusiasts vocal oppose the potential for NFTs in playa major game publisher is still focused on Web3 games: Square Enix, creator of major franchises such as Final Fantasy and Dragon Quest.

The Japanese firm has gradually increased its investment and presence in the Web3 space in recent years, and in president Yosuke Matsudas annual New Year letter for 2023he explained that Square Enix is ​​”mostly focused” on blockchain-powered gaming amid its new business development.

Square Enix is ​​developing “several blockchain games” based on original IP, rather than its existing franchises, Matsuda wrote, and the firm plans to announce additional games this year. The firm is also still considering investment opportunities around blockchain. “[We] will continue to take stakes in promising businesses whether we find them in Japan or abroad,” he wrote.

Matsuda’s letter highlights the growing use of the term Web3, which he writes has become “a well-established buzzword among business people.” However, he also notes the market challenges that emerged in 2022, including collapse of cryptocurrency exchange FTX in November and the subsequent industrial contagion.

“Blockchain has been an object of excitement and a source of unease,” Matsuda explained, “but with that in the rearview mirror, we hope that blockchain gaming will move into a new stage of growth in 2023.”

There has been increasing interest in blockchain technology a mainstay of Matsuda’s annual letter in recent years, and Square Enix has picked up speed in the space along the way.

In November, Square Enix announced its first original game built around Ethereum NFTs, called Symbiogenesis. Set to launch this spring, it is a “digital collectible art experience” with storytelling elements. The company tweeted recently that “the gameplay is about choosing whether to monopolize or [share]information with other players.

Square Enix also recently announced that it will be a strategic advisor to Cross the timesa digital trading card game built on Polygonand invested in Bitcoin gaming startup SEBEDE. That too invested in the metaverse game The Sandbox in 2020and last year revealed plans to revive the dormant Dungeon Siege property as an in-game experience in The Sandbox.

Also last year, Square Enix announced plans to release Final Fantasy NFTs via Enjin’s Polka dot-based Efinity platform. The NFTs are based on the popular game Final Fantasy VII, and are tied to physical trading cards and toys that will be released this year.

Last May, Square Enix sold three of its in-house studios along with major franchises—including Tomb Raider and Deus Ex—to Embracer Group for $300 million. The publisher said the sale would benefit the growing push for blockchain games.

Square Enix is ​​one of a handful of major traditional game publishers committed to expanding the blockchain space. Ubisoft, maker of Assassin’s Creed and Just Dance, has invested in and collaborated with a number of crypto game studios, and released the first NFT items in the game for a major franchise game in late 2021 with Ghost Recon: Breakpoint.

Meanwhile, Take-Two Interactive – the publisher behind Rockstar Games and 2K Games, makers of Grand Theft Auto and NBA 2K respectively – has pushed into the NFT space through its informal game studio, Zynga. Take-two also invested in Horizon Game Studios along with Ubisoft, but Rockstar Games has since prohibited use of NFTs on Grand Theft Auto V servers.

Web3 advocates believe that NFTs – or tokens that represent ownership of unique items – could fuel decentralized, player-owned game economies and benefit players via the ability to resell items and potentially use them across multiple games.

But many players has pushed back against the rise of Web3 games and NFT collectibles, pointing to fraud in the crypto industry, simplified gameplay for many early Web3 game examples, and speculative demand that has driven up the prices of some assets.

In his letter, Matsuda highlighted the previous speculative frenzy surrounding NFTs, but wrote that he believes the focus on monetization will give way to a growing view of the potential functional benefits of NFTs for players.

“In the wake of the aforementioned turbulence in the cryptocurrency industry, there is now a trend to see blockchain technology as just a means to an end, and to discuss what needs to happen to achieve the end of delivering new experiences and excitement to customers, ” he wrote. “I see this as a very favorable development for the future growth of the industry.”