Final Fantasy creator Square Enix confirms major investment in blockchain gaming

Game publisher Square Enix (NASDAQ: SQNXF) is set to increase its investment in blockchain gaming in 2023, according to a New Year’s letter from the company’s president.

Square Enix President Yosuke Matsuda wrote in his customary letter to shareholders that blockchain-backed game development will be the centerpiece of the company in the new year. The letter recapped the challenges and accomplishments seen by the company in 2022.

Matsuda attributed the unfavorable macroeconomic sentiments to the rapid decline of virtual currency prices while a shortage of semiconductors adversely affected hardware supplies to Square Enix. Struggling with finance, Square Enix was forced to sell three of its studios and their associated IP to Embracer Group in the summer of 2022.

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

The company president confirmed that it has multiple blockchain-based games under development, which will be launched in the coming months. Matsuda confirmed that Square Enix is taking an active stance in looking for investors while it continues to raise the stakes for the gaming industry.

Matsuda submitted that the use of non-fungible tokens (NFTs) in gaming was marred by speculators flooding the space, but the fall in prices offers a chance for creators to explore innovative use cases. He argued that attempts to centralize blockchain-based gaming contradict its ethos; instead, “blockchain gaming must operate based on a self-sustaining decentralized model.”

Not Square Enix’s first rodeo

Square Enix is not new to blockchain-based gaming, having cut its teeth in the sector with the release of its widely anticipated Final Fantasy collection on Enjin. The game publisher waded deeper into the ecosystem by becoming a node validator on the Oasys blockchain.

The forays into DLT have not gone down well with critics, as a cross-section of pundits has termed the move “self-sabotage.” Not deterred by the criticisms, Square Enix sunk 7 billion yen in a partnership with mobile game developer Gumi Games to create NFT-based gaming titles.

Matsuda’s letter pointed out that Square Enix is aware of attempts by governments to issue new regulations to govern the burgeoning industry, and his company is taking necessary steps to brace for their impact.

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