Square Enix focusing on “hit global titles” due to Japan’s ageing population

“The Japanese market is no longer sufficient for generating a profit”

Square Enix says it needs to focus on hit “global” titles due to Japan’s ageing population and invest in blockchain, according to its 2022 annual report.

Released earlier this week, Square Enix’s annual report said that the company needs to “revamp” their studio portfolio because “achieving major growth in the game industry is difficult now for companies that compete primarily in the Japanese market, given its graying demographics.”

Earlier this year, it was reported that Japan has one of the highest proportions of older persons in the world, while last month it was confirmed that over 75s account for over 15 per cent of the country’s population, a record high.

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“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,” continued the report by Square Enix.

Final Fantasy 14 Buried Memory
Final Fantasy 14. Credit: Square Enix

“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.”

The report went on to talk about how the company has identified “AI, the cloud and blockchain as focus investments” with the report stating that “the blockchain domain (is) our most important focus”.

Earlier this year, Square Enix said it wanted to develop “blockchain games and entertainment products” but the company’s president Yosuke Matsuda said “it’s still too early to consider making Dragon Quest and Final Fantasy blockchain games.”

Back in May, Embracer Group entered an agreement with Square Enix to acquire much of the latter’s Western business arm, including intellectual property like Tomb RaiderDeus Ex and over 50 back-catalogue games. A few months later, it was reported that Square Enix was looking to sell off stakes in Western studios in a bid to “improve capital efficiency,” before further reports suggested the company was looking to open a new studio in the West.

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In other news, IKEA has allegedly filed a cease and desist letter against an indie developer over perceived similarities between horror game The Store Is Closed and IKEA stores.

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