Square Enix Is Bringing Blockchain Games, Crypto Coins, and More in 2023

The Alpha:

Square Enix, the company behind franchises like Final Fantasy, Kingdom Hearts, and Tactics Ogre, is recommitting to its blockchain strategy in 2023, according to its yearly letter from company President Yosuke Matsuda.
The firm aims to launch several blockchain games and NFT projects using brand-new IPs sometime in 2023.
The Japanese games company also plans to establish a game & service publishing business centered on blockchain games.
Notably, it will also issue, manage, and invest in its own crypto coins as an international entity this year.

Why it matters

Square Enix has made a renewed commitment towards all things Web3. Best known for gracing the world with video game darling franchises like Final Fantasy and Kingdom Hearts, the firm opened the new year with an update on its blockchain and Web3 strategy, debuting plans to use its world-building and storytelling expertise to launch several blockchain games and NFT projects using brand-new IPs sometime in 2023. Additionally, the Japanese games company intends to issue, manage, and invest its own set of crypto coins during the year as part of its existence as an international entity.

To forward its global presence, Square Enix also shared plans to establish a game & service publishing business centered on blockchain games. Considering the recent divestment of its western studios to Embracer Group, there is some indication that the company wants to further build up the reputation of its stateside game development arm in the international market. Through the year, Square Enix may also establish a corporate venture capital unit, indicating a strong interest in following up on its initial Web3 investments into Animoca Brands and The Sandbox.

This move may puzzle Square Enix’s core gaming audience, who spent much of 2022 rallying against introducing this new technology into their beloved medium. Regardless of the prickly reception blockchain technology’s received among the broader gaming market, Square Enix has been quietly building a presence in Web3 over the past few years.

In 2021, Square Enix released an NFT collection for its Japan-only mobile game Shin-San-Sei Million Arthur on the LINE blockchain, and later released it as a blockchain game on mobile in the Japanese market as a proof of concept for future blockchain gaming titles down the line. In 2022, Shin-San-Sei Million Arthur completed its first season, giving vital insight into releasing and maintaining a blockchain-enabled game. 2022 also saw Square Enix partner up with Enjin to deliver a collectible set of digital cards and figurines based on Final Fantasy VII in celebration of the landmark title’s 25th anniversary.

Japan takes leading steps in bringing Web3 to the public

Square Enix may spend 2023 planning the economic structure of its future blockchain game titles, citing the exploration of user-generated content and effective community self-governance in the document. Citing Japan’s interest in employing blockchain technology to serve the Japanese populace, in addition to the increased regulations centered around the crypto and NFT spaces taking place around the world, Matsuda described the firm’s responses to the volatility of the space as necessary steps in creating “a more transparent business environment.” Locally, this includes the Japanese government-approved Priority Policy Program for Realizing a Digital Society, along with the November establishment of a DAO by its official Digital Agency centered around studying Web3 as closely as possible.

The move also comes in the wake of the Japanese government’s interest in integrating blockchain technology into its services for the populace of the island nation. Addressing concerns of readers only familiar with the negative 2022 headlines regarding Web3, Matsuda stressed the legitimacy of this strategy as a business decision in his letter. This makes sense, because Square Enix’s decision also runs in contrast to the broader gaming market’s attitude toward NFTs, best exemplified by Minecraft’s July 2022 ban of all blockchain technology from the platform.

“2023 is a milestone year for us in that it marks the 20th anniversary of the merger of Enix and Square,” Matsuda said in his letter. “Against a backdrop of dizzying change in our business environment, we have achieved significant growth fueled by the myriad opportunities that arose over the past two decades. […] We will drive our businesses forward with the goal of making 2023 a year of major evolution and transformation.” With a world-renowned powerhouse of story and world-building in gaming, Square Enix’s move could be a step toward assuaging industry consumers who fear Web3 gaming might lack substance.