Square Enix President’s New Year’s Message Discusses NFTs, Blockchain Games, Cloud, and AI


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Today, Square Enix President Yosuke Matsuda posted a New Years Post on the official Square Enix website, discussing NFT, Blockchain, and more.

Today, Square Enix President Yosuke Matsuda posted a New Years message on the publisher’s official website.

The letter includes a fairly in-depth discussion of blockchain and NFT (Non-Fungible Tokens) games. These trends appear to be an area of ​​interest for the company, while Matsuda-san acknowledges that the “majority of gamers” have “expressed reservations” about them.

We also hear about other areas of interest such as AI and cloud gaming.

You can read the full post below.

“I would like to start by wishing everyone a happy new year.

The Metaverse was a hot topic in 2021, inspiring a heated global conversation first about what the Metaverse is and then what kind of business opportunities it presents. Against this backdrop, Facebook changed its name in October to Meta, proving that the concept is not just a buzzword but is here to stay. The Metaverse has garnered so much attention that 2021 has been dubbed “the Year of the Metaverse”

I attribute this in large part to advances in Extended Reality (XR) technology, the growing prevalence of cloud and 5G, more sophisticated blockchain technology, and other technological developments that have taken place in various fields. during the last years. That’s because these advancements give rise to services that fall under the umbrella of the metaverse. The Metaverse will likely experience a significant transition to a commercial phase in 2022, with a wide range of services appearing on the scene. As this abstract concept begins to take concrete shape in the form of product and service offerings, I hope it will bring about changes that will also have a greater impact on our business.

Another term that quickly gained traction in 2021 was “NFT” or “non-fungible token”. The advent of NFTs using blockchain technology has dramatically increased the liquidity of digital goods, enabling a variety of such goods to be traded at high prices and sparking conversations around the world. I see 2021 not only as “Metaverse: Year One” but also as “NFT: Year One” given that it was a year in which NFTs were greeted with great enthusiasm by a user base in rapid expansion. However, here and there we see examples of overheated NFT-based digital product trading with somewhat speculative overtones, regardless of the observed value of the content provided. This is obviously not an ideal situation, but I would expect to see a possible right -size digital goods transactions as they become more common among the general public, with the value of every content available. corrected to their true estimated value, and hopefully they become as familiar as transactions in physical goods.

To address these changes in our business environment, the mid-term business strategy we unveiled in May 2020 identified AI, cloud and blockchain games as new areas where we need to focus our investments, and we have subsequently been aggressive in our R&D. efforts and investments in these areas.

In the field of AI, we have established SQUARE ENIX AI & ARTS Alchemy Co., Ltd. (“AI & AA”) in March 2020 to continue development efforts in the broader field of “entertainment AI” rather than being limited by traditional game concepts. AI. The company’s R&D efforts are primarily focused on natural language processing, global models, and simulation technology. These efforts will help us grow the games we release to the world and improve their overall quality, but that’s not all. By incorporating the result of these R&D efforts into virtual avatars and elsewhere, we plan to apply this result to a wide variety of content and deliver the relevant technology to other companies, with a view to leveraging these efforts of R&D across our digital entertainment business.

We explore potential efforts in the cloud space from two main perspectives, the first of leveraging cloud technologies to distribute content, and the second of developing content that offers customers new forms of excitement enabled by customers. cloud attributes. More telecommunications infrastructure is being built, as evidenced by the expansion of 5G coverage. The devices also gain in performance. As these trends continue, I believe the content we deliver will become more accessible, which will increase the likelihood that our customers will experience pleasure as we gain new points of contact with them. Leveraging cloud technologies is extremely effective in making our content and services uniformly available and as a catalyst for creating new forms of enthusiasm that expand the content development capabilities for which we are known. As such, we will be investing heavily in the cloud space.

Finally, blockchain games. Whether single-player or online games, games have traditionally involved a one-way flow whereby creators such as ourselves deliver a game to the consumers who play them. In contrast, blockchain games, which emerged from their infancy and are entering a growth phase right now, are based on the principle of a token economy and therefore have the potential to enable autonomous game growth. The driving force that most enables such growth in autonomous play is diversity, both in the way people interact with interactive content like games, and in their motivations for doing so. Advances in token economies are likely to give new impetus to this trend towards diversification. I see the concept of ‘play to win’ that has so excited people as a great example of this.

I realize that some people who “play for fun” and currently form the majority of players have expressed reservations about these new trends, and that’s understandable. However, I think there will be a number of people whose motivation will be to “play to contribute”, that is, to help make the game more exciting. The traditional game offered no explicit incentive for this latter group of people, who were strictly motivated by personal feelings as inconsistent as goodwill and the spirit of volunteerism. This fact is not unrelated to the limitations of existing UGC (User Generated Content). The UGC was created solely because of the desire of individuals to express themselves and not because there was an explicit incentive to reward them for their creative efforts. I see this as one of the reasons there hasn’t been as much major game-changing user-generated content as you might expect.

However, with the advancement of token savings, users will be given explicit incentives, thus not only resulting in greater consistency in their motivation, but also creating a tangible benefit for their creative endeavors. I believe it will lead more people to dedicate themselves to such efforts and greater possibilities of games developing in exciting ways. Whether it’s having fun, making money, or contributing, a wide variety of motivations will inspire people to engage in games and connect with each other. It is the blockchain-based tokens that will allow this. By building viable token economies into our games, we will enable autonomous gaming growth. It is precisely this type of ecosystem that is at the heart of what I call “decentralized gaming,” and I hope it becomes a major gaming trend in the future. If we refer to the one-way relationship where players and game providers are linked by games that are end products as a “centralized game” to contrast it with decentralized games, then the incorporation of decentralized games in our portfolio in addition to centralized games will be a major strategic theme for us from 2022. The basic and elementary technologies to enable blockchain games already exist, and there has been an increase in societal literacy and education. acceptance of crypto assets in recent years. We will keep a close eye on societal changes in this space while listening to the many user groups that populate it, and increase our efforts to grow a business accordingly, with a view to potentially issuing our own tokens to the to come up.

Our lifestyles have changed and we are learning to coexist with COVID-19. In this context, I believe that the new technologies and concepts I have spoken about and the changes they bring to our business environment will provide us with many opportunities to enrich people’s lives through digital entertainment, which is at the heart of our activity. At the same time, this means that we are seeing the start of new steps forward for our company. We remain committed to creating, developing and delivering world-class content, and we will contribute to the happiness of society and its people by offering new forms of excitement.


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