Japanese gaming conglomerate Square Enix is moving forward with its commitment to non-fungible tokens, or NFTs, a technology often mocked by gamers.
Square Enix plans aggressive investments in NFTs in 2023
Matsuda wrote in the letter that Square Enix has “several blockchain games based on original IPs in development, some of which we announced last year, and we are making preparations that will enable us to unveil even more titles this year.”
Square Enix devoted a significant amount of resources to NFT projects in 2022. In May, the company announced that it was selling a number of game studios and franchises to Swedish holding company Embracer Group for $300 million, noting in a press release that “the transaction enables the launch of new businesses by moving forward with investments in fields including blockchain, AI and the cloud.” The selloff coincided with the massive $500 billion crypto crash that same month.
In November, Square Enix revealed “Symbiogenesis,” an NFT game that was met with backlash from players who expected it to be one revival of the revered horror series Parasite Eve. (Square Enix wasn’t alone: A number of other major game companies announced plans to work NFTs into games, which were met with similarly lukewarm responses and controversy.)
Despite the “crypto winter” that has seen falling cryptocurrency prices and the collapse of major companies in the space, Matsuda expressed optimism about the future of blockchain gaming, refers to Japanese government initiatives to promote Web3 services, NFTs, and the metaverse.
“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,” he wrote. “However, if this turns out to have been a step in a process that leads 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 also mentioned that Square Enix would aim to meet the goals set out in the company’s March 2022 financial performance guidance, including investing in blockchain company Animoca Brands, establishing publishing arms in countries where cryptocurrencies are popular, and branded NFTs.
“The market was driven more by speculative investors than by players through 2021,” Matsuda wrote in his New Year letter, referring to the crypto market. “In other words, the content that was at the forefront was created based on the premise that blockchain and NFTs would result in monetization. However, 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 this as a very favorable development for the future growth of the industry.”
NFTs and cryptocurrency as a whole continue to be a hotly debated topic. The collapse of cryptocurrency exchange FTX and the subsequent arrest of founder Sam Bankman-Fried led to intense scrutiny of the industry. Bankman-Fried, FTX co-founder Gary Wang and Caroline Ellison, former CEO of Alamenda Research (a firm affiliated with FTX) were all charged with conspiracy to commit various forms of fraud. Wang and Ellison pleaded guilty; Bankman-Fried pleaded not guilty. In September, the White House said the creation of crypto assets could hamper the country’s commitment to the Paris Agreement, an international treaty to combat climate change. Mining, minting and trading cryptocurrency requires a staggering amount of energy, which leaves a significant carbon footprint.
Some video game developers have taken clear positions against implementing NFTs in their games. “Minecraft” developer Mojang Studios announced in July that NFTs and blockchain technology will be strictly banned from “Minecraft,” citing both as exclusionary and against the spirit of the game. Game developer Sam Barlow responded to the news that Square Enix was still committed to NFTs with a crooked tweet: “Come on 2023, stop acting like it’s 2022.”
