Square Enix will invest aggressively in NFTs by 2023


Square Enix, a Japanese gaming conglomerate, is moving forward with its commitment to nonfungible tokens (or NFTs), a technology that gamers often despise.

In a Jan. 1 letter, Square Enix president Yosuke Matsuda shared the company’s vision for 2023, which includes “aggressive investment” into blockchain technology and NFTs. This continuation of the company’s contentious 2022 business strategy comes amid instability in cryptocurrency and the growing unpopularity of NFTs among gamers.

Matsuda wrote in the letter that Square Enix has “multiple blockchain games based on original IPs under development, some of which we announced last year, and we are undertaking preparations that will enable us to unveil even more titles this year.”

Square Enix committed a substantial amount of resources in 2022 to NFT projects. In May, the company announced that it sold a number of game studios and franchises to Swedish holding company Embracer Group for $300 million, noting in a press release that the “transaction enables the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud.” The sale coincided with the massive $500 billion crypto crash that same month.

Square Enix will be open November revealed “Symbiogenesis,” an NFT game that was met with backlash from gamers who were expecting it to be a revival Parasite Eve, the horror series that is so beloved. (Square Enix’s announcement was not the only one: Other major gaming companies also announced plans to integrate NFTs in their games. They were met with similar reactions and controversies.

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Despite the “crypto winter” that’s seen falling cryptocurrency prices and the collapse of large companies in the space, Matsuda expressed optimism about the future of blockchain games, Refer to the Japanese government’s initiatives to promote Web3 services, NFTs and the metaverse.

“Following the excitement and exhilaration that surrounded NFTs and the metaverse in 2021, 2022 was a year of great volatility in the blockchain-related space,” he wrote. “However, if this proves to have been a step in a process that leads to the creation of rules and a more transparent business environment, it will definitely have been for the good of the growth of blockchain entertainment.”

Matsuda also mentioned that Square Enix would aim to fulfill the objectives laid out in the company’s March 2022 financial results briefing, including investing in blockchain company Animoca Brands, establishing publishing arms in countries where cryptocurrencies are popular and branded NFTs.

“The market was driven more by speculative investors than by gamers though 2021,” Matsuda wrote in his new year letter, referencing the crypto market. “In other words, the content that was at the forefront was created based on the premise that blockchain and NFTs should result in monetization. In the wake of the recent turmoil in the cryptocurrency market, it is becoming more common to see blockchain technology as a means to an end. This allows for customers to have new experiences and excitement. I see this as a very beneficial development for the future growth of the industry.”

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The topic of NFTs and cryptocurrency in general continues to be hotly debated. The industry was subject to intense scrutiny after the collapse of cryptocurrency exchange FTX. Sam Bankman Fried was arrested. Bankman-Fried and Gary Wang, co-founders of FTX, were also charged. Caroline Ellison was the former CEO at Alamenda Research (a company that is affiliated with FTX), was also charged with conspiracy to commit various types of fraud. Wang and Ellison pleaded guilty, while Bankman-Fried was not guilty. In September, the White House said that crypto asset creation could hamstring the country’s commitment to the Paris Agreement, an international treaty to combat climate change. The enormous amount of energy required to mine, mint, and trade cryptocurrency leaves behind a substantial carbon footprint.

NFTs have been opposed by some video game developers. “Minecraft” developer Mojang Studios announced in July that NFTs and blockchain technology will be strictly forbidden from “Minecraft,” referring to both as exclusionary and against the spirit of the game. Sam Barlow, a game developer, responded to Square Enix’s announcement that Square Enix still believed in NFTs. wry tweet: “C’mon 2023, stop acting like it’s 2022.”

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