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Square Enix Hasn’t Given Up on NFTs

4 Minute Read
Jan 5 2023
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Crypto and NFTs have been having a rough time, but that hasn’t stopped Square Enix from developing blockchain content.

NFT proponents have been trying to make NFT items in gaming a thing since they first started gaining traction. Ubisoft was one of the first big gaming companies to add NFTs to a game. They came in the form of digital pants, guns, and a helmet to try and cash in. But to no one’s surprise, it went poorly. Surprisingly,  Square Enix is still trying to get into the blockchain.

Enix

Bizarre Expectations & Weird Decisions

Square Enix is a strange company when it came to the expectations of their western studios and IPs. The Tomb Raider reboot sold big at 3.4 million units, but expectations were set incredibly high at 5-6 million units. Those are Call of Duty numbers.

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Hitman Absolution and Sleeping Dogs, while being fantastic games, also were slated to sell much more than was reasonable. This led to the then-company president, Yoichi Wada, stepping down in 2013.

After 2013, Square Enix had critically acclaimed games like Rise of the Tomb Raider, Hitman(2016), Deus Ex: Mankind Divided, and Marvel’s Guardians of the Galaxy. But none of these titles met the company’s high expectations. The issue was only made worse by games like Marvel’s Avengers not even selling remotely close to their expectations.

This brought Square Enix to one of the most baffling decisions it could make. The company sold Crystal Dynamics and Eidos Interactive to a Swedish company named Embracer for 300 million dollars in May – in order to invest in blockchain gaming. The sale also involved many beloved IPs such as Tomb Raider, Deus Ex, and even long-dormant titles like the Legacy of Kain. Now those titles belong to Embracer.

In a press release from Square Enix, President Yosuke Matsuda stated

…the Transaction enables the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud.

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This was a shock to many gamers, who see the use of the blockchain in gaming as a fruitless technology. Especially since many of the biggest promises of blockchain are just unrealistic.

Like the items that you can buy and take into another game, which is absolutely impossible.

“Let It Ride!”

2022 showed a MASSIVE drop in both the NFT and Crypto markets, with people losing thousands to millions of dollars in a short period of time. It has gotten so bad, people are suing celebrities who endorsed NFTs and Crypto. You would think such a dumpster fire would be something any company would slowly back away from. But according to a report from Press StartSquare Enix is not only not giving up on the blockchain, it’s going all-in. 

In the “New Year’s Letter from the President” released by President Yosuke Matsuda, they are making it clear that the technology Web3/Web 3.0 is something they want to invest further into. Specifically, the team believes the decentralized technology is heading towards regulation – which would make it safer to invest in. The irony of this? One of the reasons many fans of NFTs like them is their decentralization, but I get Matsuda’s reasoning.

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The biggest mentions of these thoughts in the address are:

“In the wake of these developments, we hear rumblings from some countries of early moves to regulate such businesses more strictly. In Japan, meanwhile, the drive to encourage such businesses has gained momentum, led by the government. In June 2022, the Japanese cabinet signed off on a plan called the “Priority Policy Program for Realizing a Digital Society,” which includes wording regarding the creation of an environment for promoting the Web 3.0 concept, including the use of NFTs based on blockchain technology. Japan’s Digital Agency also launched a Web 3.0 study group.

New technologies and frameworks lead to innovation, but they also create considerable confusion. Having ridden out such societal tides, some such technologies and frameworks gradually become part of people’s lives, eventually giving rise to new businesses and growth. Following the excitement and exhilaration that surrounded NFTs and the metaverse in 2021, 2022 was a year of great volatility in the blockchain-related space. However, if this proves to have been a step in a process that leads to the creation of rules and a more transparent business environment, it will definitely have been for the good of the growth of blockchain entertainment.”

According to Matsuda, Square Enix already has blockchain-related projects it has in development with original IPs. The latest announcement was titled Symbiogenesis back in November 2022. The announcement caused many people to hope it was a Parasite Eve revival. But their hopes were dashed when they found out it was an NFT project.

The second to last paragraph of the letter ends with Matsuda stating,

Blockchain has been an object of exhilaration and a source of turmoil, but with that in the rearview mirror, we hope that blockchain games will transition to a new stage of growth in 2023.” 

This is a signal that 2023 will be very interesting for Square Enix. Maybe not in a way that people will like. Let us know what you all think about Square Enix’s decision to go all in on the blockchain in the comments.

Happy Gaming!

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Spider-Mike
Author: Spider-Mike
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