The Japanese company that develops and publishes video games and manga, Square Enix, is reshaping its entire business strategy and including NFTs at the heart of its shift. The goal is to create an entire ecosystem based on NFTs and to invest heavily in blockchain gaming infrastructure.
A shift towards new technologies
The company known mainly for its role-playing video games, especially the series Final Fantasy, Dragon Quest and Kingdom Hearts revealed many elements regarding his recent turn. Thanks to the first quarter earnings report, we learn that it will expand non-fungible tokens (NFTs) to more gaming products as part of its medium-term business strategy, again this year.
Square Enix manages more than $3 billion in assets (latest earnings report). She also sold the franchise Tomb Raider for $300 million on May 3.
The report states that the company has launched an NFT pilot program on the game Shi-San-Sei Million Arthur in February of this year. The success of the pilot program will lead to the second season of the game’s NFTs and will eventually see the firm pursue broader activities in the NFT and blockchain industries.
Among its blockchain initiatives, Square Enix plans to establish regulatory clarity and guidelines for blockchain games, tackle the scalability of NFT economies, and is considering the creation of a venture capital unit.
The company also stated that it plans to establish an overseas entity that will take care of “ the issuance, management and investment of [leurs] own tokens ”, which hints that the company will begin to create an economy encompassing their tokens. We can imagine the creation of P2E (Play-to-Earn) games. Let’s hope that the company manages to surround itself with the best in the field so as not to deliver an almost ponzinomics, but rather something with great playability allowing you to win while playing. We can think of projects like Axie Infinity and Crabada that didn’t shine on this point, which ended up failing them.
A turn was made with the help of professionals
The interesting aspect of this news is that Square Enix seems to have understood that surrounding itself well with professionals is necessary in this area. The company is working with Animoca Brands, a venture capital firm specializing in Web3 games and the metaverse, to explore its options in the blockchain gaming space. The cooperation between the two companies is expected to intensify as Square Enix sinks deeper into the ecosystem.
Animoca’s Executive Chairman, Yat Siu, believes that Square Enix’s influence in the field of games can only help the company gain a foothold in the blockchain sector. He said recently in an interview for Cointelegraph that Square Enix has already been talking about the potential of blockchain games for a long time, so they understand it better than most traditional gaming giants.
The goal for the Japanese company is not to miss the turn of new technologies. We can imagine metaverse, NFT, P2E projects … The report places investments in blockchain, artificial intelligence (AI), the cloud computing and their monetization as the third objective of its medium-term business strategy. This corresponds to the intention expressed by CEO Yosuke Matsuda to see his company become more involved in these technologies.
The popularity of Web3 and NFT games remained robust throughout 2022, despite a general slowdown in the cryptocurrency market. The market tracking tool DappRadar indicates that there were 1 million daily active players on May 14, which is almost the same level as on January 1. However, gamers are not buying as much as they used to, as the total sales volume of NFT game items fell by 88%, from $70 on January 1 to $8.7 million on May 14.
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Passionate about technical analysis and technology, I have been diligently following cryptocurrencies since 2017.
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