Square Enix will make aggressive investments in blockchain
Legendary game studio Square Enix will continue to double down on Blockchain technology and digital assets in 2023. In a letter published by company president Yosuke Matsuda, the company committed to focus on “blockchain entertainment” and Web3.
In 2022, Square Enix explored non-fungible token (NFT) initiatives. According to the company’s latest financial results, the digital asset and blockchain-based business received positive feedback and a good reception. Matsuda said:
(…) we are most focused on blockchain entertainment, to which we have devoted aggressive investment and business development. Looking externally, I think it’s fair to say that blockchain gained significant recognition as a field in 2022 (…).
Square Enix maintains faith in blockchain technology for entertainment
As shown in the chart below, interest in the sector may be based on the increase in sales from mobile games. Net sales revenue from smart devices and PCs has been rising since 2020, becoming a larger part of the company’s contribution.
As for the physical game versus the digital game sales, the latter has become more critical for the company since Q3 2020. This metric continues to rise today and, combined with net sales revenue, explains the interest in reinforcing digital sales and entertainment.
As part of their expansion into the blockchain space, Square Enix will launch an overseas entity dedicated to “issuing, managing and investing our own tokens” and publishing games in countries with “widespread use of cryptocurrency.”
In addition, the company is exploring launching a Corporate Venture Capital entity, issuing exclusive products such as NFTs, and launching an NFT brand and a new IP based on this technology.
In that sense, the company included blockchain entertainment as a critical part of its mid-term business strategy. From 2021 to 2022, Square Enix released “Shi‐San‐Sei Million Arthur” season one, a free-to-play mobile game for Android and iOS.
The positive reception of this product is another factor that led to the expansion of the company’s digital assets and blockchain business. In this series’ second season, Square Enix will implement a new strategy to explore features such as NFT ownership, “earning structures” and much more.
Working with crypto and NFT regulations
The company’s president believes the implosion of FTX and other prominent players in the sector will push for stricter regulation of blockchain technology. Therefore, Square Enix will approach Japanese and other authorities to work with these regulations.
The company will help clarify the regulations surrounding the nascent sector based on the idea that “new technologies and frameworks lead to innovation.” Square Enix’s president wrote the following about the future of NFTs and their maturation in the coming months; he invited people to think about these assets beyond their speculative capacity:
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.
At the time of writing, Ethereum is trading at $1,210 with sideways movement in the last 24 hours.
