Square Enix Expects Blockchain Gaming to Grow in 2023

Square Enix, the Tokyo-based video game giant, is already developing multiple blockchain games, highlighting an area of growth in the midst of a brutal crypto winter.

Even in the face of an extended crypto winter that has chilled many sectors of the industry, blockchain-based gaming continues to pique the interest of some of the world’s largest gaming companies.

Square Enix, the multinational holding company behind the popular Final Fantasy video games, issued a New Year’s letter from its president and representative director Yosuke Matsuda on Sunday, reinforcing its push into blockchain gaming.

“In terms of new business domains, under our medium-term business plan, we named three focus investment fields,” Matsuda wrote. “We are most interested in blockchain entertainment, for which we have made aggressive investments and business development efforts.”

The Tokyo-based video game company said it has “multiple blockchain games based on original [intellectual property] under development” as part of its 2023 strategy, which it has been teasing since last year. It is also seeking global investment in order to increase its stake in promising blockchain startups.

Despite the fact that it has been a year of “great volatility” for cryptocurrency, the company remains optimistic about Web3. “Following the aforementioned turbulence in the cryptocurrency industry, there is now a trend to view blockchain technology as merely a means to an end and to discuss what needs to happen in order to achieve the end goal of providing new experiences and excitement to customers. This, in my opinion, is a very positive development for the industry’s future growth.”

“Blockchain has been both an exhilarating and turbulent experience, but with that in the rearview mirror, we hope that blockchain games will enter a new stage of growth in 2023,” Matsuda wrote.

Japan’s Growth Conditions

As Square Enix plans further expansion into Web3, growth conditions have been established in Japan, where the company is headquartered.

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The Japanese government approved a plan titled “Priority Policy Program for Realizing a Digital Society” in June 2022 “which outlined the country’s plans to promote Web3 by learning more about decentralized autonomous organizations (DAOs) and non-fungible tokens (NFTs). The Ministry of Economy, Trade, and Industry established the Web3 Policy Promotion Office in July 2022 to handle issues related to building a blockchain-based business.

Fumio Kishida, Japan’s Prime Minister, has been active in efforts to jumpstart the country’s economy, particularly by encouraging investment in digital technology. Kishida stated in a policy speech in October 2022 that Japan will continue to focus on “supporting the social implementation of digital technology” and will “promote efforts to expand the use of Web3 services that leverage the metaverse and NFTs.”

Japan’s financial regulator has also proposed relaxing tax rules for corporate and individual cryptocurrency investors, and the country’s digital ministry is considering establishing a DAO to better understand the technology.

Gamers are still skeptical

Since 2018, Square Enix has been “aggressively investing” in blockchain gaming, though its core audience of hardcore gamers is skeptical of blockchain integration.

Shi-San-Sei Million Arthur, a collection of NFT digital stickers on the LINE blockchain, was released in October 2021 as the company’s first foray into digital collectibles. In a financial results briefing in November, the company stated that it would make “a robust entry into blockchain games” and emphasized the incorporation of token economics into its games.

Traditional gamers, on the other hand, have expressed skepticism about the company’s foray into blockchain gaming, citing the release of Final Fantasy VII collectible figures that came with NFTs, as well as the recent announcement of Symbiogenesis, its first game built around Ethereum NFTs. Some gamers were also perplexed by the company’s decision to sell three of its studios, including the creator of the Tomb Raider franchise, in May 2022 in order to fund its blockchain expansion.

Nonetheless, investment in Web3 gaming continues to grow, and traditional gaming studios such as Ubisoft have begun to embrace the technology.

Square Enix has demonstrated its intention to be a market leader with its latest announcement.

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“Blockchain has been both an exhilarating and turbulent experience, but with that in the rearview mirror, we hope that blockchain games will enter a new stage of growth in 2023,” Matsuda wrote.

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