Square Enix appears to be on the verge of shaking up its development portfolio. According to its president, we may soon see fewer titles, but a more diverse array of genres coming out of a developer and publisher traditionally known for its massive RPG franchises.
In an investor Q&A that took place back in November but which was only recently published in English, Square Enix president Takashi Kiryu addressed multiple questions from investors about the company's portfolio going forward. In response to a question about what Square Enix was lacking that it needed to achieve sustained growth and meet its business goals, Kiryu cited two points: the limited diversity of the company's portfolio, and a lack of strong marketing. On the limited diversity point specifically, he went on to explain the need to increase the different kinds of games in Square Enix's portfolio by strengthing internal development capabilities, or perhaps even making acquisitions.
"Because we possess strong IPs like the Dragon Quest and Final Fantasy franchises, I believe that we have tended to be overly reliant on certain gameplay styles or genres," Kiryu said. "Meanwhile, the tastes of customers in the gaming market have diversified, and customers have come to enjoy content from a variety of genres. Moreover, blockbuster titles are not the only ones that enjoy popularity. For example, our title Powerwash Simulator is somewhat of an outlier in our portfolio in that it is a game well suited for casual play, but we have been able to steadily build up our earnings from it."
Later in the Q&A, Kiryu was asked again about the company's development efforts, and repeated that he wanted to strengthen Square Enix's internal capabilities and "take on new challenges, partly because we want to add to the diversity of our portfolio of titles, as I noted earlier, while also enabling our developers to expand their skill sets."
But, at the same time, Square Enix also appears to be very aware of its reputation as the RPG company. Elsewhere in the Q&A, Kiryu noted that the "numerous entries in our lineup" were making it difficult to keep tight control over development efforts. "I want to structure our development function so that we are able to ensure higher quality from each title by slimming down our lineup," he said.
In a follow-up question, Kiryu continued:
"As our customers’ needs and the types of devices available have diversified, we have tried to produce hits by developing a wide variety of titles rather than by focusing only on certain ones. I believe that this has resulted in the splintering of our resource pool. Meanwhile, there have been clear winners and losers among the major titles released recently in the gaming market, and it has become possible for even indies titles to make their presence felt. The market is increasingly polarized between blockbuster and indies titles, but I feel that we have developed many titles that fell somewhere in the middle. I want to make clearer distinctions going forward."
The market is increasingly polarized between blockbuster and indies titles, but I feel that we have developed many titles that fell somewhere in the middle.
What the president of Square Enix seems to be indicating here is that the company has been a bit too reliant on just making lots and lots of mid-budget RPGs that weren't massive successes - see recent efforts like Harvestella, Various Daylife, or Valkyrie Elysium. While the big AAA swings like Final Fantasy and Dragon Quest are unlikely to stop being hits for Square Enix, Kiryu is noting a need to spend some development energy developing games like Powerwash Simulator (developed by Futurlab) internally and capitalizing on title diversity, instead of just reiterating the same formula across dozens of different, AA releases.
That's one interpretation, but we'll have to wait and see what Square Enix is cooking up in 2024 and beyond to say anything definitive about Square Enix's plans. We do know it's on the verge of publishing Foamstars from Toylogic, and has Visions of Mana in the chamber for 2024 alongside a remake of Dragon Quest 3, the new Dragon Quest 12, and (maybe someday) Kingdom Hearts 4. We also know the company is really interested in getting AI to make content for some of these games, as Kiryu stated in a New Year's Letter earlier this year. it's also one of the few companies that hasn't fully given up on blockchain tech, even as other companies appear to be abandoning the idea.
Rebekah Valentine is a senior reporter for IGN. Got a story tip? Send it to rvalentine@ign.com.
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In an investor Q&A that took place back in November but which was only recently published in English, Square Enix president Takashi Kiryu addressed multiple questions from investors about the company's portfolio going forward. In response to a question about what Square Enix was lacking that it needed to achieve sustained growth and meet its business goals, Kiryu cited two points: the limited diversity of the company's portfolio, and a lack of strong marketing. On the limited diversity point specifically, he went on to explain the need to increase the different kinds of games in Square Enix's portfolio by strengthing internal development capabilities, or perhaps even making acquisitions.
"Because we possess strong IPs like the Dragon Quest and Final Fantasy franchises, I believe that we have tended to be overly reliant on certain gameplay styles or genres," Kiryu said. "Meanwhile, the tastes of customers in the gaming market have diversified, and customers have come to enjoy content from a variety of genres. Moreover, blockbuster titles are not the only ones that enjoy popularity. For example, our title Powerwash Simulator is somewhat of an outlier in our portfolio in that it is a game well suited for casual play, but we have been able to steadily build up our earnings from it."
Later in the Q&A, Kiryu was asked again about the company's development efforts, and repeated that he wanted to strengthen Square Enix's internal capabilities and "take on new challenges, partly because we want to add to the diversity of our portfolio of titles, as I noted earlier, while also enabling our developers to expand their skill sets."
But, at the same time, Square Enix also appears to be very aware of its reputation as the RPG company. Elsewhere in the Q&A, Kiryu noted that the "numerous entries in our lineup" were making it difficult to keep tight control over development efforts. "I want to structure our development function so that we are able to ensure higher quality from each title by slimming down our lineup," he said.
In a follow-up question, Kiryu continued:
"As our customers’ needs and the types of devices available have diversified, we have tried to produce hits by developing a wide variety of titles rather than by focusing only on certain ones. I believe that this has resulted in the splintering of our resource pool. Meanwhile, there have been clear winners and losers among the major titles released recently in the gaming market, and it has become possible for even indies titles to make their presence felt. The market is increasingly polarized between blockbuster and indies titles, but I feel that we have developed many titles that fell somewhere in the middle. I want to make clearer distinctions going forward."
The market is increasingly polarized between blockbuster and indies titles, but I feel that we have developed many titles that fell somewhere in the middle.
What the president of Square Enix seems to be indicating here is that the company has been a bit too reliant on just making lots and lots of mid-budget RPGs that weren't massive successes - see recent efforts like Harvestella, Various Daylife, or Valkyrie Elysium. While the big AAA swings like Final Fantasy and Dragon Quest are unlikely to stop being hits for Square Enix, Kiryu is noting a need to spend some development energy developing games like Powerwash Simulator (developed by Futurlab) internally and capitalizing on title diversity, instead of just reiterating the same formula across dozens of different, AA releases.
That's one interpretation, but we'll have to wait and see what Square Enix is cooking up in 2024 and beyond to say anything definitive about Square Enix's plans. We do know it's on the verge of publishing Foamstars from Toylogic, and has Visions of Mana in the chamber for 2024 alongside a remake of Dragon Quest 3, the new Dragon Quest 12, and (maybe someday) Kingdom Hearts 4. We also know the company is really interested in getting AI to make content for some of these games, as Kiryu stated in a New Year's Letter earlier this year. it's also one of the few companies that hasn't fully given up on blockchain tech, even as other companies appear to be abandoning the idea.
Rebekah Valentine is a senior reporter for IGN. Got a story tip? Send it to rvalentine@ign.com.
Continue reading...
