Gaming Giants, Square Enix To Invest In Blockchain Games

Are the sales of its revenue-generating franchise worth the blockchain investment?

[TL; DR]

Square Enix is a Japanese tech giant that specializes in games.

It was founded in September 1975 and formally called the Enix Corporation.

Square Enix has over 5000 employees with operations in Video games, Mass media, publishing, and Motion pictures.

Square Enix has had several of its entertainment products selling millions of copies.

These gaming products include Kingdom Hearts; shipping sold 35 million; Final Fantasy sold 168 million, and Dragon Quest sold 84 million copies.

Square Enix is looking forward to investing in blockchain by integrating cryptocurrency and NFTs into video games.

The investment is a massive project that saw the sales of over $300 million worth of intellectual property.

Some of the sold assets include the whole Eidos Subsidiaries, Crustal studios, Lara Croft, and more than 50 gaming titles, including “Thief.”

Keywords: Gaming, Square Enix, blockchain, games, investment, giant.


This is not the first time a tech giant has made huge investments and diversified into blockchain and web3 technology.

Since blockchain technology started gathering buzz, many giants from several industries have continued to pull their resources into developing a smart platform.

These investments into web3 and blockchain technology vary. There is the Decentralized Finance App development, Non-fungible Token, Virtual games etc.

Whichever path you choose to invest in, it will leverage blockchain technology and bring real-life experiences into the virtual world.

In a similar vein, one tech and gaming world giant is breaking massively into blockchain technology. Which company is it? What are the steps towards actualizing the dreams? This article will do justice to that.


What Is Square Enix?

---

Square Enix Holdings Co, Limited is a leading Japanese Entertainment conglomerate with specialties in gaming. Yasuhiro Fukushima owns it.

Square Enix, formally called Enix Corporation, was founded on September 22, 1975. In April 2003, Square and Enix formed a merger and birthed Square Enix.

Square Enix has its headquarters at the Shinjuku Eastside Square Building, Tokyo, with over 5,000 employees worldwide.

As of 2021, Square Enix has 332 billion Yen in revenue and a net income of 26.94 billion yen. Square Enix delves into Video games, Mass media, publishing, and Motion pictures.

Square Enix is a successful entertainment creator and producer. Several of their franchises have sold millions of copies worldwide. For instance, Kingdom Hearts shipping sold 35 million, Final Fantasy sold 168 million, and Dragon Quest sold 84 million copies.

The popular products of Square Enix are Video game franchises, Arcade games, Merchandise, Manga, and Amusement facilities.


Square Enix Investment In Blockchain Games

---

Square Enix has stated several times that it is looking forward to becoming a stakeholder in blockchain technology. The interest will be in harnessing the blockchain for gaming by integrating cryptocurrency and NFTs into video games.

In a bid to invest in Blockchain games, the Japanese gaming giant sold $300 million worth of intellectual property. These intellectual properties are tied to "Tomb Raider" and "Deus Ex."

The bid also saw Square Enix selling quite a number of its foreign studios. The proceeds from all sales will be used to fund its blockchain initiatives.

Swedish game maker Embracer Group purchased a more significant part of the sold assets. Some of these assets are the whole Eidos Subsidiaries, Crustal studios, and more than 50 gaming titles, including “Thief.”

Both Eidos and Crystal studio subsidiaries generated combined revenue of $170 million in the fiscal year that ended in March 2021. The revenue indicates a 21% increase in profit for Square Enix compared with the previous year's revenue.

Lara Croft is another prominent gaming subsidiary sold to the Embracer group (formerly called THQ Nordic).

Most game console enthusiasts were familiar with Lara Croft when it got a reboot in 2013’s Tomb Raider by Crystal Dynamics. The game series got two sequels, “Rise of the Tomb Raider and Shadow of the Tomb Raider.”

At the launch of the duo series, it proved a huge success by selling about 35 million copies worldwide. Lara Croft fans are displeased with the decision of Square Enix to sell off the game franchise.

Square Enix, however, clarified the issue surrounding the sales of some of their major assets and revenue generation pipelines.

According to Square Enix, the sale works to two ends;

"Firstly, it will allow for more cash flow in a volatile business environment -- presumably a reference to a combination of the pandemic and inflation. Secondly, (Square Enix) can use the money to invest in "fields including blockchain, AI, and the cloud."

Yosuke Matsuda, Square Enix president, made a confessional statement that the gaming conglomerate is interested in bringing together the blockchain for gaming. That is harnessing cryptocurrency and Non Fungible Tokens into video games.

Since 2018, when Square Enix had a successful run in blockchain technology, it has entered a complete commercialization phase after a successful Nonfungible Token (NFT) proof of concept.

President Yosuke Matsuda said, along with this NFT venture, Square Enix has also decided to focus on blockchain games premised on token economies as a form of decentralized content.


Conclusion

---

The management of Square Enix believed they had made the right decision by laying off some of their subsidiaries to give enough room and funds to accommodate the blockchain gaming.

However, enthusiasts and fanatics of Square Enix gaming consoles do not believe it is a good decision and are displeased.

It is worthy of note that Square Enix did not sell off all its gaming subsidiaries, and just Cause, Outriders and Life Is Strange are still being produced by this Japanese gaming giant—the decision of Square Enix to sell off the game franchise.

Square Enix, however, clarified the issue surrounding the sales of some of their major assets and revenue generation pipelines.

According to Square Enix, the sale works to two ends; First, it allows for more cash flow in a volatile business environment -- presumably a reference to a combination of the pandemic and inflation. Secondly, it can use the money to invest in "fields including blockchain, AI, and the cloud."

There are no precise details on the type of blockchain games Square Enix wants to invest in. We are optimistic that more information will be released soon, especially for the fans of their previous game franchises.






Author: Valentine. A, Gate.io Researcher

This article represents only the researcher's views and does not constitute any investment suggestions.

Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.