In its FY22 financial report, Square Enix has revealed plans to establish a number of new studios, including via mergers and acquisitions – despite deciding to sell off a number of its existing studios a week earlier in May 2022. It appears that, as part of the company’s ‘medium-term business strategy’, it will now refocus on boosting game development capacities by channeling its energy into fresh avenues.
As shared by Axios’ Stephen Totilo on Twitter, it appears Square Enix chose to divest itself of its Western studios for a number of strategic reasons:
- To ‘achieve sustained growth through selection and concentration of company resources’
- To ‘better align overseas publishing function with organisation in Tokyo’
- To ‘transform group business portfolio’
Essentially, Square Enix is looking to reallocate its existing resources in the hopes this will better ‘align’ with the desires of its consumer base. By making these changes, the company hopes to maximise its worldwide revenue from games produced in Japan and abroad.
This is a notable goal, as Square Enix often expressed disappointment with past titles launched by Western studios – most recently, with Marvel’s Avengers and Marvel’s Guardians of the Galaxy. It’s likely the middling global success of these titles buoyed the company’s recent decision to divest its major studios, and that going forward, it will potentially focus on investment in other regions.
Read: Marvel’s Guardians of the Galaxy disappointed Square Enix
In addition to future mergers and acquisitions, the company’s planned portfolio transformation appears to include major plans for monetisation of ‘new business’ that includes investments in blockchain, AI and the cloud. The company has previously explored the NFT space, and enthused that this technology has a ‘high affinity’ with existing company assets.
The news arrives following a major crash in the cryptocurrency blockchain market which has destabilised the entire industry, and news that NFT sales have plummeted over 90% in the last year.
At the very least, it seems Square Enix is keeping its options open, in the event that the blockchain market experiences are a complete wipe out. While acquiring new studios may seem like a sideways step for the company, it plans to keep its momentum going through a variety of fresh investments, and through the continued success of established games like the MMORPG Final Fantasy XIV – which recently reported a sharp growth in paying subscribers.
Should these avenues fail, the company has also used its financial reports as an opportunity to express confidence in Balan Wonderworld, a game so buggy that its own director recently disowned it.