Glad new 12 months, writes the president of Sq. Enix in a brand new letter, and now let me let you know all in regards to the blockchain. The broader trade, or the respectable aspect of it a minimum of, stays deeply sceptical of the worth added to video games by web3 applied sciences, however there are a couple of massive outliers equivalent to Ubisoft (which final 12 months launched an ill-fated NFT experiment) and above all Sq. Enix.

The large Japanese writer stands out not due to its curiosity, however due to how bullish it’s in regards to the future incorporation of those applied sciences. Some essential context for western readers is that the corporate has some profitable mobile-oriented titles in Japan that do use such applied sciences, so when it is speaking about use instances it already has them.

The letter from Sq. Enix president Yosuke Matsuda begins by wishing everybody a cheerful new 12 months earlier than outlining a number of the issues the world confronted in 2022, together with “hovering inflation”, the Russian invasion of Ukraine, inventory costs plunging (particularly within the tech sector), and the “dramatic depreciation of the yen [ballooning] costs on imported uncooked supplies”. The macroeconomic setting ain’t nice, in different phrases, although Matsuda expects “situations to ameliorate within the early spring”.

Matsuda briefly addresses the sale of three studios—Crystal Dynamics, Eidos-Montréal, and Sq. Enix Montréal—plus varied IP to the Embracer Group in August of final 12 months. He writes that the objective was to “additional focus our sources” as improvement turns into extra advanced, as a part of which the writer is on a large hiring push for inside expertise. That is put in a wider context of Sq. Enix believing its western and Japanese divisions operated independently of each other, whereas now it goals to be “One Sq. Enix”.

Now the dangerous information. Matsuda writes in regards to the future alternatives Sq. Enix sees within the trade. The writer apparently has “three focus funding fields” and “amongst these, we’re most targeted on blockchain leisure, to which we’ve devoted aggressive funding”. Matsuda acknowledges the “volatility” in crypto markets and the “somber string” of stories tales about blockchain companies, “together with the scandalous chapter submitting of FTX in November”.

The macro image with loads of these crypto disasters is that nationwide regulators are waking as much as the area, and Matsuda says “we hear rumblings from some international locations of early strikes to control such companies extra strictly”. This isn’t but the case in Japan, nonetheless, where in June 2022 that authorities signed-off on the ‘Precedence Coverage Program for Realizing a Digital Society’ which incorporates steering about web3 applied sciences, NFTs and blockchains.

Matsuda’s saying that Sq. Enix recognises there’s some dodgy stuff right here, and 2022 was a really dangerous 12 months for web3 applied sciences, nevertheless it nonetheless thinks this is part of the long run. And in contrast to many crypto lovers, as a part of this it is trying ahead to “the creation of guidelines and a extra clear enterprise setting” round blockchain stuff.

Then there is a barely bizarre little bit of the letter where it appears like Matsuda’s perhaps had a sip of the Kool Support, and certainly he is returning to a theme already raised in final 12 months’s letter. “If we take into account conventional gaming to have been centralized, then blockchain gaming should function primarily based on a self-sustaining decentralized mannequin,” writes Matsuda. “It’s that idea, that philosophy that I see to be key.”

Your guess is pretty much as good as mine. However then, all I would like from Sq. Enix is one other Parasite Eve.

Matsuda does a minimum of say that he sees the dialog round blockchain moving from where it was in 2021, which is to say pushed by speculative funding, where the premise was that first-and-foremost these applied sciences had been about monetisation. However due to the broader turbulence in crypto markets “there’s now a pattern to view blockchain expertise as a mere means to an finish and to debate what must occur to attain the top of delivering new experiences and pleasure to clients”.

Which, on condition that Sq. Enix appears to be all-in on these items, is a minimum of a extra optimistic strategy. It is debatable that these applied sciences may provide fascinating performance for video games, by for instance monitoring each particular person weapon in a massively multiplayer game, however the one examples we’re seeing in the meanwhile have the tech front-and-center fairly than doing one thing helpful within the background.

Sq. Enix at present has “a number of blockchain video games primarily based on unique IPs below improvement”, will unveil some extra this 12 months, and is trying to spend money on companies creating attention-grabbing blockchain stuff. 

2023 marks 20 years for the reason that merger of Sq. and Enix, a partnership that yoked-together arguably the 2 biggest JRPG studios there have been and has confirmed enormously profitable. The corporate has continued to make nice video games, with maybe the present jewel within the crown being the continuing success and vibrancy of Last Fantasy XIV.

Sq. Enix’s attraction to the blockchain does reflexively give one the jitters, however a minimum of it recognises that the performance for the participant should come first if stuff like that is to be integrated into video games. Gamers do not like these applied sciences as they at present exist, and with good purpose. Sq. Enix does appear to be suggesting that, sooner or later, you would possibly get pleasure from considered one of their video games constructed on such tech: however with out ever realising it is within the background.