In a financial report that confirmed Square Enix has “set new records for full-year net sales”, the Japanese company says it wants to “enhance [its] presence in the global market” given the “graying demographics” for developing games primarily for the Japanese market.
In the statement, Square Enix said it was “critical for [its] business that [it] produce hit titles that speak to the global market”.
“For our Group to better focus on developing titles for the global market in this changing environment, we need to concentrate our limited resources on the development of strong and robust titles,” the company said.
“We need to enhance our presence in the global market by quickly establishing an organisational structure that enables us to consistently roll out high-quality content produced through selective and focused resource allocation, which requires the revamping of our title and studio portfolio.
“Achieving major growth in the game industry is difficult now for companies that compete primarily in the Japanese market, given its graying demographics. As such, it is critical for our business that we produce hit titles that speak to the global market, which offers greater scale in terms of both customers and sales volumes,” Square Enix added (thanks, NME).
“In other words, the Japanese market is no longer sufficient for achieving a level of earnings that enables us to recoup our development investment and generate a profit, and we therefore need to approach our development efforts based on the assumption that we have to succeed in the global market.”
President Yosuke Matsuda further added that he believes “blockchain entertainment” will “play a key part of [SE’s] strategy for future growth”, adding that the company had “identified AI, the cloud, and blockchain as focus investment areas”.
Just weeks after confirming it was selling off its western studios and IP to Embracer Group for $300m, Square Enix revealed plans to “establish new studios” and acquire others.
The news came as part of the company’s recent financial presentation, which revealed that one of Square Enix’s “medium-term business strategy” initiatives is to “boost game development capabilities by establishing new studios, [mergers and acquisitions], etc.”
The company said that the “objectives behind divestiture of select overseas studios and IP” – that is, the reason why it sold off its three western studios – was to “achieve sustained growth through selection and concentration of company sources, better align overseas publishing function with organisation in Tokyo, and transform group business portfolio”.