Square Enix Will Reveal More Blockchain Gaming Titles This Year

by Arthur · January 2, 2023

Quick take:

Square Enix sold its Western arm to Embracer Group for $300 million last August to focus on blockchain games.
The company partnered with Web3 gaming blockchain, Oasys, in September.
Matsuda said in his New Year’s letter that Square Enix has several blockchain games in development.

Square Enix President Yosuke Matsuda is doubling down on the company’s commitment to Web3. In his New Year’s letter published on January 1, Matsuda mentioned the word “blockchain” 14 times.

The gaming company’s push towards Web3 began last February when it teamed up with The Sandbox to bring Dungeon Siege to the metaverse. Three months later, Square Enix sold its Western arm and all related intellectual property rights to the Embracer group for $300 million to focus on blockchain games.

In addition to developing blockchain games, Square Enix has also invested in them. In July, the company backed Bitcoin gaming infrastructure provider Zebedee in a $35 million funding round.

In the new annual letter, Matsuda said that Square Enix is currently most focused on investing in blockchain entertainment while acknowledging the volatility of the crypto and NFT markets as well as the collapse of FTX.

However, he believes that events that negatively affected the Web3 industry in 2022 would ultimately be good for the growth of blockchain entertainment if it leads to regulation and transparency in the Web3 business environment.

Matsuda also mentioned that Square Enix Group is developing several blockchain games based on original IPs, some of which were announced last year. In November, the company released a trailer for its first NFT game, symbiogenesis, which received mixed reactions, especially from the Web2 gaming community known to resist traditional game companies’ moves towards GameFi. However, he remains undisturbed.

“We are making preparations that will enable us to reveal even more titles this year…Blockchain has been a subject of excitement and a source of unease, but with that in the rearview mirror, we hope that blockchain gaming will transition to a new stage of growth in 2023,” Matsuda wrote in the New Year’s letter.

While their blockchain games have yet to come to fruition, Square Enix has been actively taking steps in that direction. In September, Square Enix partnered with Oasys Gaming to become a node operator for Oasys’ upcoming “eco-friendly, proof-of-stake” blockchain.

The company joins a growing list of global video game makers exploring blockchain gaming, including Bandai Namco Research, Sega, Ubisoft (which has a similar partnership with Tezos), Netmarble, WeMade and Com2uS.

In July, the leading video game developer teamed up with Enjin to create NFTs based on the popular game, Final Fantasy VII.

Matsuda said the blockchain and NFT market was driven more by speculative investors than players through 2022. He added that content that was at the forefront was created based on the assumption that blockchain and NFTs would result in monetization.

“However, in the wake of the aforementioned turbulence in the cryptocurrency industry, there is now a trend to see blockchain technology as just a means to an end and to discuss what needs to happen to achieve the end of delivering new experiences and excitement to customers. I see on this as a very favorable development for the industry’s future growth, he concluded.

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