Square Enix believes recent blockchain volatility could benefit their game plans

Final Fantasy publisher Square Enix has once again used its New Year’s letter to promote its “aggressive” investment in blockchain games, arguing that recent market volatility could ultimately benefit its plans.

Square Enix was one of the first major publishers to declare support for “blockchain entertainment,” which uses a form of digital ledger to effectively allow users to own, buy, and sell digital goods.

In its New Year’s letter last year, the company committed to creating blockchain and NFT games. Later in 2022, it announced plans to sell NFTs as part of what it calls the “first digital collectible project designed from the ground up for Web3 fans”.

In a new letter discussing plans for 2023, Square Enix president Yosuke Matsuda has now said that blockchain remains the biggest focus of its mid-term investments, despite what he called “volatility” in the blockchain space in 2022.

Matsuda argued that lessons learned and likely regulation to come could benefit the growth of the blockchain field and its plans to develop games based on the technology.

“In terms of new business domains, we have named three focus investment fields under our medium-term business plan,” the executive wrote. “Among these, we are most focused on blockchain entertainment, to which we have devoted aggressive investment and business development efforts.

“Looking externally, I think it’s fair to say that blockchain gained significant recognition as a field in 2022, as evidenced by ‘Web 3.0’ becoming a well-established buzzword among business people.

“However, the year saw volatility in the cryptocurrency and NFT (non-fungible token) markets that tracked the dramatic changes in the macro economy described above. The latter half of the year in particular produced a bleak series of blockchain-related news, including the scandalous bankruptcy filing of FTX in November. »

He continued: “In the wake of these developments, we are hearing rumblings from some countries about early moves to regulate such businesses more strictly. In Japan, meanwhile, the drive to encourage such businesses has gained momentum, led by the government.”

Matsuda goes on to cite Japan’s “Priority Policy Program for Realizing a Digital Society”, a plan signed in June 2022 regarding the promotion of the Web 3.0 concept, including the use of NFTs based on blockchain technology.

“New technologies and frameworks lead to innovation, but they also create significant confusion,” he wrote. “After riding out such societal tides, some such technologies and frameworks gradually become part of people’s lives, eventually giving rise to new businesses and growth.

“After the excitement and excitement that surrounded NFTs and the metaverse in 2021, 2022 was a year of great volatility in the blockchain-related space. But if this turns out to have been a step in a process leading to the creation of rules and a more transparent business environment, it will definitely have been for the best for the growth of blockchain entertainment.”

Matsuda concluded by acknowledging that much of the discussion surrounding blockchain games was previously driven by investors, and as such focused on the monetization opportunities the technology could unlock.

He argued that increased discussion among the general public, and lessons learned from the recent market turbulence, can now steer blockchain gaming in a direction that is ultimately more attractive to consumers.

“Several blockchain gaming events held overseas have recently produced more active discussion than ever before about what makes games exciting and what their user community looks like,” he wrote.

“The market was driven more by speculative investors than by players through 2021. In other words, the content that was at the forefront was created based on the premise that blockchain and NFTs would result in monetization.

“But 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. I see on this as a very favorable development for the industry’s future growth.”

Square Enix has several blockchain games based on original IPs in development, some of which have already been announced and others scheduled to appear this year.

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