Japanese game giant SE sells IP to develop blockchain games is it “smart exploration” or “blind development”?

Yesterday, Japanese video game developer Square Enix announced that it is selling some of its studios and more than 50 game IPs – including legendary studios Crystal Dynamics, Eidos-Montréal, Square Enix Montréal and Tomb Raider, Kill Out Famous game IPs such as Resiege and Final Fantasy to focus on blockchain, artificial intelligence and cloud technology.

The studios and assets will be acquired by video game publisher Embracer Group in a deal worth about $300 million, which is expected to close between July and September.

According to Square Enix’s filing, the proceeds from the sale will allow it to “launch new businesses by advancing investments including blockchain, artificial intelligence and cloud.” It also said the sale will allow it to improve its Relations between Tokyo and overseas divisions, with the goal of “maximizing global revenue” from future game releases.

However, many gamers are puzzled by Square Enix’s “saucy operation” selling popular IP, and they are not interested in Square Enix’s 2022 strategy theme – blockchain games.

Square Enix’s history of blockchain forays

Square Enix is ​​a Japanese video game developer specializing in fantasy-themed games. It has a large number of popular IPs, such as “Final Fantasy”, “Tomb Raider”, “Deus Ex,” and so on. Releases such as “Neil” and “Life is Strange” are also highly acclaimed, establishing its leading position in the game industry. Although the quality of Square Enix’s game masterpieces has shown a certain decline in recent years, it seems to have a new goal, which is to enter the blockchain industry.

Yosuke Matsuda, the president and board representative of Square Enix (hereafter translated as Yosuke Matsuda), has expressed his interest in NFTs, blockchain games and the Metaverse many times in the past year or two.

In his 2022 New Year’s letter, Yosuke Matsuda highlighted NFTs that had become a global focus in the previous year, arguing that while NFT transactions are currently somewhat “overheated” and speculative, there will be price corrections as they become more common :” 2021 will be the first year of not only the development of the Metaverse, but also the first year of NFTs, as NFTs are enthusiastic from a rapidly expanding user base during this year. However, we did observe an overheated trading of NFT-based digital goods example, with some speculative overtones. This is obviously not an ideal situation, but I would like to see the right outcome in the end – digital commodity trading is becoming more common among the general public.”

As for blockchain games, Yosuke Matsuda believes that token-based games can not only provide incentives for players, but also provide incentives for players who create in the game : “Whether it is a single-player game or an online game, traditionally All involve a one-way process, where creators like us deliver games to players. In contrast, blockchain games enter the growth stage from the beginning, built on the premise of a token economy, and therefore have the ability to achieve self-sustaining growth in games potential. Advances in the token economy could further drive this trend. I think the Play-to-Earn concept that excites people is a good example of this… Going forward, District Blockchain gaming, or decentralized gaming, will be a big strategic theme for Square Enix in 2022.

Square Enix entered the blockchain space as early as 2019, the year it participated in Animoca Brands’ $2.01 million financing for its virtual world game The Sandbox. Although the share was not disclosed, Square Enix actually received SAND Tokens and future equity notes. SAND is a transaction token used throughout The Sandbox ecosystem and will be used by gamers, creators and publishers, and will allow content creators and players to exchange assets and game content.


Image: Screenshot of The Sandbox Creative Mode, via Animoca Brands

In May 2021, Square Enix announced its entry into the NFT market, partnering with Japan’s leading blockchain company Double Jump.Tokyo to issue an NFT digital collectible card for the mobile game “Million King Arthur”. The NFT series is based on LINE Blockchain, a blockchain developed by Japanese social giant LINE, which buyers can manage directly in the LINE wallet. However, these NFTs are not integrated with gameplay, but only as digital artwork. But this did not stop Japanese players who have a strong desire to collect. This NFT with the “Million King Arthur” IP as the selling point was sold out twice.

In April of this year, Square Enix released the latest news through the preview website originally established for the “Million King Arthur” NFT. Combined with the launch of the LINE NFT market, it will continue to issue this series of NFTs in the future, and integrate NFTs into the game content.

The trouble with major game companies such as Square Enix

After reading the comments of netizens about Square Enix selling game IP to increase investment in blockchain, we can find that many gamers are puzzled by Square Enix’s “saucy operation” selling masterpieces, except because these high-quality games have not been around for a long time. In addition to the sequel, part of the reason is still not buying NFTs (or cryptocurrencies).


At the beginning of December last year, when Ubisoft first launched its own NFT distribution platform Quartz among the major game companies, it was boycotted by players like a tide, even though Ubisoft had promoted the energy-saving area of ​​NFT based on the PoS consensus mechanism with great fanfare in advance. Blockchain Tezos.

To put it simply, Ubisoft’s games will issue NFTs on Quartz and can be traded in the NFT market based on the Tezos blockchain. After playing the game, players can sell equipment in the NFT market and transfer assets Bring out the game . At present, only the PC version of “Ghost Recon: Breakpoint” has released NFT, and players can receive it for free by completing different tasks in the game. We can see the list of transactions for Ghost Recon Breakpoint NFTs on Tezos-based Rarible.


As the first Ubisoft to truly integrate NFT into 3A games, it encountered Waterloo in terms of transaction volume.According to Twitter user Liz Edwards, two weeks after the launch of the “Ghost Recon: Breakpoint” NFT, the transaction volume in the third-party NFT market was only 15 times, which was only 1% of the total issuance at that time. Players have proven in action that selling in-game items as NFTs is unpopular.

But Ubisoft isn’t holding back. Nicolas Pouard, vice president of Ubisoft’s Strategic Innovation Lab, said in an interview: “It’s really beneficial for us to do this. But [gamers] don’t understand now that players have to overcome a lot of habits and change a lot of ingrained mindsets. This requires time.”

Players’ attitudes towards NFTs are currently polarized: proponents think it’s tempting that NFTs not only allow players to use the same items in different games, that is, interoperability. From a longer-term perspective, NFT will make the concept of “Metaverse” a reality; but opponents believe that the NFT market has entered an “irrational” era of prosperity, full of “hype” and “speculation”, and NFT also wasting energy.

Ubisoft, Square Enix, EA, Sega and other major game companies have deployed NFTs, so what is the “charm” of integrating NFTs into games?

The first is the ownership that NFTs give players. The “User Code of Conduct Terms” of most traditional games will point out that the player only has the right to use it, rather than owning the game account and the items in it. When the game is closed, the player’s account cannot be traded, and the charged money cannot be retrieved. Once players have game assets in the form of NFT, no matter how the game develops, the assets will always be stored in their digital wallets and can be freely traded. 

The second is security, transparency, and anonymity. This is the main advantage, by using blockchain, gamers can trade their game assets safely and securely. All transactions are recorded publicly on the network, and game players’ transaction history is recorded, providing undisputed proof of ownership, meaning they won’t have to go through the red tape to prove who the player is and what items they have before making a transaction . But ownership can only be transferred through encrypted signatures, so even though the entire network has access to a player’s transaction history, the player’s identity remains anonymous.

Finally, the most revolutionary feature of blockchain games is Play-to-Earn (earning while playing). Players can earn tokens or assets by completing certain challenges. Tokens earned in-game can be exchanged for other cryptocurrencies like Bitcoin or Ethereum, or even used to buy real-world assets. This allows players to earn real money from playing the game.Blockchain games provide players with meaningful investment opportunities that can be sold for profit.

Whether it is Ubisoft, Square Enix, or other big game companies that have announced NFT plans, in their view, players’ play in NFT games in the future can create value, exchange with real money, and even surpass the game itself. In the game cycle, as long as the demand exists, players can always obtain value.

However, it is also reasonable for gamers to worry that the blockchain will change their precious entertainment world. To be truly accepted by players, there are still many practical problems to be solved for NFTs. And Square Enix also needs to accumulate experience in testing the water again and again, balance the gameplay and quality that players want with the ownership of the blockchain, and be a “smart explorer” in the new field of blockchain games. Not “blind development”.

risk warning:

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Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/japanese-game-giant-se-sells-ip-to-develop-blockchain-games-is-it-smart-exploration-or-blind-development/
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