Matsuda-san explains that the company intends to announce and release a healthy mix of diverse games:
Our diverse and strong upcoming lineup, from Blockbuster games to LIVE games will be either announced or released to our customers around the world. We will also continue to work with utmost effort for further expansion of sales channel via download and cloud technology to deliver our content in the optimum form for each of our customers. Furthermore, we will pursue developing businesses in the emerging markets – not only in Asia, but also other regions including Middle East, South America and Russia.
The Square Enix Group will continue to rise to the strategic challenges facing our industry in this year. Our endeavour is to provide amazement and excitement, those “jack-in-the-box” moments, through the creativity of our developers and visionaries. We will make ourselves ready to adapt to any future changes in the business environment, and commit ourselves to delivering the very best quality entertainment to our customers, filled with “fun.”
If you’re wondering what he means with “LIVE games,” here’s his explanation:
Blockbuster games using the Group’s high-quality IPs and LIVE games, which we define as games for smartphone, tablets, online and arcade. While Blockbuster titles will continue to be an integral part of our business, we pursued regional expansion and diversification of distribution channels such as cloud gaming.
We also diligently worked on the pipeline expansion of our LIVE games. In this area, we can expect to provide our customers with brand-new experiences; competitive or co-operative gameplay, e-sports, and lively user community activities stimulated by video streaming of gameplay.
The annual report goes more in depth with further information, including the company’s financial highlights for 2014:
Matsuda-san also explains his strategy, that can be divided in three points:
- Revisiting long-term, large-scale development.
- Focusing on smart devices as game consoles.
- Developing product portfolios tailored to local requirements.
Revisiting Long-term, Large-scale Development
The first point mentions that HD (high definition) games are Square Enix’s DNA and a showcase of its creativity, but it shows a structural flaw in its disc sales model. Matsuda-san mentions that console manufacturers started promoting high definition free to play games, and that’s an important point of Square Enix’s structural reform as well.
The list of titles that have been announced is still limited at present, but we will be introducing new HD game titles featuring variable pricing models.
Matsuda-san also wants to solve the problem of long development times and more:
The question is how to properly deal with increasingly protracted development periods. In addition, we have a number of challenges to tackle: to say nothing of research into technological aspects such as game engines and development tools. We are facing several business model issues of how to provide customers with additional content both before and after game launch, and how to introduce new development initiatives such as derivative product and episodic models. We are diligently undertaking these tasks, and will report the results of our efforts at a future date.
Finally, he promised a report on several achievements in the cloud gaming area during and after the fiscal year ending March 2015.
Smart Devices as Game Consoles
Matsuda-san explains how gaming on smartphones is a focus business for Square Enix:
Smart devices such as smartphones and tablets are not game consoles. However, smart devices have rapidly spread to gain an important position as a type of gaming device. It has become a common sight to see people playing games on these devices, which leads us to a strategically important theme of how to encourage customers to play our content on smart devices.
He also mentions how smartphone gaming is growing fast in Asia, South America and India, promising to “establish a foothold of entry into those fast-growing markets through the fiscal year ending March 2015.”
Product Portfolios Tailored to Regions
Matsuda-san explains that each region holds different cultures and lifestyles, and customers in those regions have different tastes in games and playing styles. Yet, he mentions that he doesn’t mean physical region, as in the world connected by the internet physical borders have become meaningless. He refers, instead, to customer diversity:
Therefore, creators can provide customers with the ultimate experience by focusing on their specialized areas. For example, there are many customers loving JRPGs (Japanese Role Playing Games) worldwide. By focusing on JRPGs tailored to these customers and offering the ultimate games, we will win acclaim from the world. I think that is a reality of the modern digital content business.
Matsuda-san concludes by mentioning that the gaming industry is changing, and that is not just a threat, but also an opportunity for Square Enix, promising to be aggressive in pursuing a leading position:
The content industry, particularly the games industry, is right in the middle of a major transformation. Although such a transformation is a threat, it’s also a tremendous opportunity for us. By resolutely pressing forward, we shall seize the opportunity through an aggressive approach in order to make the next leap forward as the content industry’s leading company. I would like to ask your continued support.