Square Enix President Confirms Commitment to NFTs, Blockchain Gaming
Square Enix’s Yosuke Matsuda released the annual New Year’s letter from the president for 2023. These messages tend to give people an idea of what to expect from the company for the coming year, as well as goals. In addition to mentioning the 20th anniversary of the merger of Square and Enix, the goal of creating an end-to-end global publishing organization, and addressing how it got rid of Crystal Dynamics, Eidos-Montréal and Square Enix Montréal, it also noted to a continued commitment to an endeavor mentioned in 2022. That is, despite fluctuations and situations in the cryptocurrency sphere in 2022, Square Enix will continue to invest in and explore NFTs and blockchain games.
As a reminder, Square Enix president Matsuda also addressed NFTs and blockchain games in the 2022 New Year letter. At the time, he suggested that there would be story-focused NFTs.
Here’s the part of Square Enix’s New Year’s letter where Matsuda discussed the company’s approach to NFTs and blockchain games going forward.
In terms of new business domains, we have named three focus investment fields under our medium-term business plan. 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 also saw volatility in the cryptocurrency and NFT (non-fungible token) markets following the dramatic changes in the macro economy described above. In particular, the last half of the year produced a gloomy series of blockchain-related news, including the scandalous bankruptcy filing of FTX in November.
In the wake of this development, we hear rumblings from some countries about early steps to regulate such businesses more strictly. In Japan, meanwhile, the drive to encourage such businesses has gained momentum, led by the government. In June 2022, the Japanese Cabinet signed a plan called “Priority Policy Program for Realizing a Digital Society”, which includes formulations regarding the creation of an environment to promote the Web 3.0 concept, including the use of NFTs based on blockchain technology. Japan’s Digital Agency also launched a Web 3.0 Study Group.
New technologies and frameworks lead to innovation, but they also create considerable confusion. 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. 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.
Keeping a steady eye on these environmental changes while considering from a higher perspective what Web 3.0 and blockchain entertainment is actually about offers a different view than if we focus on them solely in technological or speculative investment terms. As I said in last year’s New Year letter, if we consider traditional gaming to have become centralized, then blockchain gaming must operate based on a self-sustaining decentralized model. It’s that concept, that philosophy that I see is the key.
That is, what kind of new experiences and new excitement our Digital Entertainment business can deliver to our customers through its game development efforts and other endeavors under the self-sustaining, decentralized concept is extremely important.
Several blockchain gaming events held overseas have recently created more active discussion than ever before about what makes the games exciting and what their user community looks like. 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. 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 industry’s future growth.
Our group 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. We are also engaged in global sourcing from an investment perspective and will continue to take stakes in promising businesses whether we find them in Japan or abroad. Blockchain has been a subject of excitement and a source of unease, but with that in the rearview mirror, we hope that blockchain gaming will move into a new stage of growth in 2023.
Square Enix has already started dipping a toe into these kinds of endeavors. In November 2022, it announced Symbiogenesis. The announcement teasing the project noted that it would be an “NFT collectible art project”, where participants would “unleash the story.” It will be launched in spring 2023.
