Square Enix must diversify its gaming output, company president says

Square Enix president Takashi Kiryu believes the company needs to diversify its gaming output, but also focus on fewer releases.

Kiryu's comments are from an investor Q&A from November just recently published in English, in which he addressed multiple questions – in particular regarding the company's medium-term business plan and what Kiryu described as “the limited diversity of our title portfolio.”

“Because we possess strong IPs like the Dragon Quest and Final Fantasy franchises, I believe that we have tended to be overly reliant on certain gameplay styles or genres,” he said. “Meanwhile, the tastes of customers in the gaming market have diversified, and customers have come to enjoy content from a variety of genres.”

Kiryu also stated the success of smaller games like PowerWash Simulator as proof of the need to diversify. “I want to increase our development proficiency by strengthening our internal development capabilities so that we are able to achieve greater diversity in our title portfolio,” he said.

Simultaneously, Kiryu believes the company needs to focus on fewer releases. “Over the long term, we need to strengthen the internal portion of our development function,” he said. “More specifically, I mean that we want to concentrate our development resources on carefully selected new titles that we will develop to a high level of quality. At the same time, rather than focusing solely on major titles, we want to also take on new challenges, partly because we want to add to the diversity of our portfolio of titles, as I noted earlier, while also enabling our developers to expand their skill sets.”

On slimming down the lineup, Kiryu added: “As our customers' needs and the types of devices available have diversified, we have tried to produce hits by developing a wide variety of titles rather than by focusing only on certain ones. I believe that this has resulted in the splintering of our resource pool.

“The market is increasingly polarized between blockbuster and indie titles, but I feel that we have developed many titles that fell somewhere in the middle. I want to make clearer distinctions going forward.”

Back in 2022, Square Enix released a whole host of mid-budget games in the second half of the year in quick succession: Star Ocean: The Divine Force, Harvestella, Valkyrie Elysium, The DioField Chronicle, Crisis Core Final Fantasy 7 Reunion and more . While individually strong games, this was clearly too much at once for both Square Enix and consumers.

This need to diversify is also interesting following Square Enix's decision in 2022 to sell off its western studios to Embracer Group, which arguably may have provided some diversity.

Back to the Q&A, and Kiryu also admitted to the importance of the upcoming Final Fantasy 7 Rebirth as “the greatest variable on which our ability to achieve our full-year operating income target of ¥55.0bn hinges.”

In addition, I have cited mobile game Final Fantasy 7 Ever Crisis as a potential big earner, as well as strong performance in Q4 and beyond from Final Fantasy 14 gearing up to the release of next expansion Dawntrail.

Before Rebirth, Square Enix is ​​certainly diversifying with its next game, the online team shooter Foamstars, which hits PlayStation Plus next month.