Thursday 27th April 2017,
Project Crystallis

Square Enix Reveals Huge Changes in Business Strategy

squareenix

Square Enix has very recently released the financial report for the fiscal year ended March 2013 which can be found here. Everyone is urged to give it a read, but here are some very interesting points that I’d like to bring to your attention:

“The first initiative is to re‐ consider long‐term, large‐scale development. Long‐term, large‐scale development makes asset turnover very slow, and the period from investment to sales is too long, so we must consider how to increase turnover.”

Final Fantasy Versus XIII is definitely a long term, large scale development project, so this might be referring to it, at least in part. What this could mean is that Square Enix will change how they will handle these games’ developments. This will be elaborated on as you read further.

“There is a huge difference from the perspective of business risk between a model where no revenue opportunities take place for several years until the product is completed (upon which investments are recovered at one time), and a model where revenue opportunities exist in some form prior to product completion, even if the amount of money invested is the same. I believe this is a crucial point.”

What this point seems to be referring to is that Square Enix will, in some way, be able to make profit from their games as they are being developed. One possibility as has been pointed out to me, is that they might revamp their Square Enix Members, and grant paid members access to features such as “sneak peaks” or what not. It’s all up in the air at this point, but this is simply a possibility.

“Poor asset turnover means that we have little contact with customers during several years of development of a game title. In a model where a game is developed without customers knowing what it’s like for many years, the product is presented to customers only after it has been finished, and all investment is recovered at one time, customers are forced to wait for too long, and opportunities for profit are passed up.

One could go as far as to say that in today’s times, making customers wait for years with little to no information is being dishonest to them. We’re no longer in an age where customers are left in the dark until a product is completed. We need to shift to a business model where we frequently interact with our customers for our products that are in‐development and/or prior to being sold, have our customers understand games under development, and finally make sure we develop games that meet their expectations.”

This was, to me, the most exciting part of the report. It basically has Final Fantasy Versus XIII painted all over it. It seems that Square Enix finally realize as a company, that customer interaction is vitally important to their success at these modern times. This could be the change that they were speaking of in the first point I brought up, basically, that they will be more open with regards to these huge projects that they are working on. This could be due, in whole or in part, to the large change in management that has happened recently.

“On the basis of the progress of recent devices, moving forward we are thinking to push into publishing games on smart phones and tablets, which we had hitherto only published on game consoles, in particular our strong‐point of single‐player,story‐driven games, etc. I have already given these instruction to our development teams, and we are moving ahead with this effort.”

Basically, this means we can expect less iOS remakes of previous Final Fantasies and such and more games like Chaos Rings, which I personally enjoyed immensely. In essence, we will most likely be seeing more ambitious and serious games from Square Enix on these platforms.

“While we had been making investments in the game development under the assumption that major titles would sell a lot worldwide, however, we have found it extremely difficult to achieve. We created our budgets on the basis that our games would be sold worldwide. We had not given much consideration of the regionality of each market, and had focused more on how to sell the major titles globally; however, titles fitting this method are limited.”

What this is saying is that Square Enix seem to plan to be more regional when it comes to their games. What this could mean is that the West will be seeing less JRPG’s from them, but more games along the lines of Tomb Raider or Sleeping Dogs. While this is disappointing, this next piece is a bit uplifting.

“Of course, we will continue to invest in flagship titles that showcase our technological prowess, pursuing high‐end game quality, and which can earn profits on a global basis. Regarding a number oft hese types of titles, we will share information with everyone at this year’s E3.”

Hopefully, this points to games such as Final Fantasy Versus XIII, which has been reported to be global already, and Final Fantasy Type-0, which most definitely shows Square Enix’s prowess when it comes to game quality. It’s a good thing Project Crystallis is going to this year’s E3! We’ll definitely keep everyone updated in that regard.

“We provide entertainment content to our customers. I believe it is important to go back to the basics, to provide our customers with content they enjoy, and to establish a long‐term relationship with our customers. In the end, that is the shortest way to serve the best interest of our shareholders. Our creators are growing to become capable of taking on such roles.”

I believe this last point does not need any further elaboration. All I can say is, I’m really looking forward to the future to see what Square Enix are going to do with their new management team.

 

Thanks to Evyn for finding this report at Siliconera.

 

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  • Colette Sparklations Chelle

    Hype

  • Xx_Kares_xX

    So… they aren’t going to do anything that will actually help them as a company.. in fact they are doing the exact opposite of what every fan of the company wants? x.x

    • the only thing I really see as an improvement is being more open with fans. Everything else like regionality freaks me out, probably means more situations like type-0. We have serious lack of jRPGs in the market and this ain’t helping. On top of that the idea of console like mobile games doesn’t sound good either, it tells me they seem to be abandoning the VITA/3DS all together, and rarely releasing games for them.

      I wish square-enix could get back to the point of making fresh new IPs (hopefully RPGs, and no psuedo-western games) and just keep making them like the square soft days.

  • SirAuron14

    This is good, I like this change, he really hit some major points, and I hope to see the return of a update ATB or an CTB battle system in final fantasy, it was always turn based which I found to be enjoyable. when I think of RPG I think turn based. not so much action adventure with final fantasy.

  • Rurouni Zanza

    I disagree with your optimism. What I gathered from what I read is that they will focus more on mobile gaming and social media which will more than likely stay in Japan for the most part. And when we do get those types of games over on the west, don’t forget how much money they make us pay for content, like new songs for Theaterythm, pay to get the card you want on that other FF mobile game, and a few other of their mobile games where they charge an astronomical price for apps.

    I have lost faith in SE.

  • Motoko Mori

    I think this opens up for the possibility of more remasters/remakes in the future,while they’re trying to regain their financial status,while also being open with fans during production to make people still feel interested in their new projects. FFX/X-2 , KH HD and FFXIV:ARR will probably be the ones showcased on E3 if anything. Maybe a small update on Versus. Either way it looks like they know they have to change their business strategy as the western market is bigger now,and faster with their game production. Although there is a LOT of work in making FF games they are of an entirely different class than mass produced EA games and neverending call of duty’s.Also their production units are smaller than the western ones,therefore longer and more work for one person in the unit. I’d pick Square Enix any day even with less outstanding games like FF13,because of the hard work they’ve put into it.

    • Xx_Kares_xX

      I wouldn’t… a bad product is a bad product, regardless of who’s making it.

      • Motoko Mori

        That is all in the eyes of the beholder. Nothing is either good or bad but thinking makes it so. You’re entitled to your own opinion and so am I ^^

        • Xx_Kares_xX

          First off, Love the quote (not being sarcastic.. have to make that clear because Text can cause problems in that way) Second, very true, but despite our differing opinions on FFXIII, I still don’t think your way of thinking makes sense. By your logic, one person making a three second flash game of a bouncing ball is more worthy of your money than say, a game like Portal just because the flash game had less people working on it. That way of thinking does not make sense to me, especially when the product costs the same amount either way. Quality is always first, and things should be judged on that standard and WILL always be judged by that standard when it’s in the same competing market.

          • Motoko Mori

            Square always does their best to create good quality games and they always sell,with exception of ff14,but even there,they remade the game from scratch and its looking pretty damn good. They work hard to please and they put their soul into it.And they do make great games. My point about hard work only applied to the FF games.

            Seeing as the western market has bigger units they have more people working on one game at a time,making the production of a game faster;they can finish a game by a year or 2.
            However the creators behind the FF games usually have more than one project active at a time and each person has more than one role to fill out in each production.
            The amount of time FF creators use to make a game is longer than western production units because of small staff therefore they have to be more open with the fans during production.
            Also games from US aren’t that expensive to make seeing as game production is one of the biggest export businesses the US have,but that is beside my point.

            I don’t think my english is that bad,so it should’ve been clear. ofc quality is first,but I think we can agree that is a very subjective opinion from person to person. I dont buy games purely based on “hard work and soul” but with FF games I can see through the fingers and buy games I know won’t be my favourite,either because of lack of compelling story or sincere hate towards a character,but because I know the graphics,music and battling system is good.

            So to be clear once again: If music,graphics,and story is in place,in a FF game, I’ll buy it 🙂

          • Xx_Kares_xX

            I do understand better now thank you ^^. Once again I disagree highly on the ‘quality’ of their products and we have very different ideas of what makes a game good, but as you said taste varys from person to person. I’ve enjoyed this conversation, even though we have differing opinions your points were very well thought out and informed, which is a very nice change from all the b.s. trolling that goes on, on the internet, so thanks for that ^^.

          • Motoko Mori

            No problem ^^ I’ve enjoyed “debating” with you too ^^ I agree there are too many internet trolls on the webb :/

  • Tim Lane

    This is good, but I am kind of weary about the more mobile scene from them, but I hope they get more stuff to the public like versus or even more KH3!