What's In Your Wallet
Square Enix Affirms Commitment to NFTs Despite Challenges in 2020
Despite the FTX bankruptcy and NFT backlash last year, Square Enix isn’t abandoning the technology.
Yosuke Matsuda, president of Square Enix, stated a year ago that NFTs (Non-Fungible Tokens) and blockchain gaming were the future. Then 2022 happened, and it became clear to all but the most ardent NFT investors and crytobros that all of this digital JPEG ownership was a ruse that the general public has mostly ignored. Despite this, Matsuda and Square Enix appear to be sticking with NFTs and blockchain games. Indeed, it appears that the company is doubling down on “blockchain entertainment” in the run-up to 2023.
To refresh your memory, NFTs are digital items that you do not actually own. Instead, you buy a receipt stating that you completely own that picture of an ape or whatever, and then you collect it in the hopes of reselling it for a large profit someday. However, you are unlikely to make any money selling expensive NFTs because the market for them has completely collapsed. Overpriced jpegs turn out to be a risky investment. Who could have predicted? (This was done by millions of people.) Anyway, Square Enix isn’t going to let minor issues like nearly universal public opposition to NFTs or massive cryptocurrency exchanges going bankrupt overnight deter the Japanese publisher from investing heavily in “Web 3.0.”
Matsuda stated in a New Year’s open letter published on January 1 that Square Enix was investing in various business domains but was “most focused on blockchain entertainment. He used a soup of buzzwords and empty ideas in the letter to try to paint a picture that blockchain technology was not dying or collapsing, but rather growing and becoming more popular. The president of Square Enix cited one piece of evidence: Web 3.0 has become a “firmly established buzzword among businesspeople.”
Following a brief mention of the massive FTX bankruptcy in November—in which a $32 billion crypto exchange exploded overnight, nearly destabilizing the entire market—Matsuda addressed the ongoing opposition to NFTs and blockchain technology. This, according to the president, is all part of the plan, and he suggested that new technology like this frequently causes “confusion” before people accept it.
“Once such societal tides have passed, some such technologies and frameworks gradually become part of people’s lives, eventually giving rise to new businesses and growth,” Matsuda explained. “2022 was a year of great volatility in the blockchain-related space, following the excitement and exhilaration that surrounded NFTs and the metaverse in 2021. However, if this turns out to be a step in a process that leads to the development of rules and a more transparent business environment, it will undoubtedly be to the benefit of the growth of blockchain entertainment.”
The president of Square Enix wrote a similar letter in 2022, but it was widely mocked online. People who criticized his vision for the company were especially upset with a section of the letter in which Matsuda mentioned people who “play to contribute” rather than people who simply play games for fun. Months later, in an April 2022 interview with Yahoo, the Square Enix CEO refused to back down, predicting that the future of gaming would include NFTs and the blockchain.
And, as with last year, Matsuda makes no specific or even hazy plans for how NFTs or blockchain will improve video games or provide new options to developers or players. Instead, Matsuda simply states that the company is working on “multiple” blockchain-powered games, including the previously announced Symbiogenesis. I guess it’s time to get excited.
“Blockchain has been both an exhilarating and turbulent experience,” Matsuda summarized, “but with that in the rearview mirror, we hope that blockchain games will transition to a new stage of growth in 2023.”
It’s not surprising that Square Enix continues to prioritize NFTs, given that the publisher recently sold three game studios—Crystal Dynamics, Eidos Montreal, and Square Enix Montreal—to the monolithic Embracer Group, all to help fund future investments in blockchain technology, AI, and cloud gaming.
Meanwhile, Square Enix has spent the last six months or so discontinuing various online games, including Babylon’s Fall and Final Fantasy VII battle royale spin-off The First Solider. I doubt that’s cause for concern as the company pushes to include NFTs in future titles. Yes, your investment in Square Enix’s digital worlds will be completely secure and will last a long time…
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