Square Enix Announces Blockchain and NFT Strategy

Game development firm Square Enix unveiled plans for blockchain and NFT developments in a New Year’s Day announcement.

CEO Discusses NFTs and the Metaverse

Square Enix announced its plans to develop blockchain, NFT, and Metaverse initiatives this weekend in a New Year’s Day letter from company president Yosuke Matsuda. In the letter, Matsuda noted that non-fungible tokens, or NFTs, attracted plenty of attention last year. He called 2021 “year one” for NFTs thanks to their quickly-growing user base.

Matsuda observed that NFTs have increased the liquidity of digital goods, but commented that NFT trading is somewhat “overheated” and speculative. Matsuda expects that NFTs will see price corrections as they become more commonplace.

Matsuda additionally drew attention to the Metaverse, the VR trend kickstarted by Facebook in October. He said that he hopes that the Metaverse will “bring about changes that have a more substantial impact on [Square Enix’s] business” as the concept begins to take shape.

Blockchain Strategy Begins This Year

Matsuda did not announce any specific NFT or Metaverse products. He did, however, say that Square Enix created a medium-term strategy in 2020 that would see the company focus investments in AI, cloud gaming, and blockchain games.

He added that decentralized blockchain games will become a “major strategic theme for [Square Enix] starting in 2022.”

Matsuda explained that games that use blockchain tokens can provide incentives for playing the game while also rewarding users for creating user-generated content for those games.

As with many other corporate NFT strategies, Square Enix has received public backlash. Users have criticized the faddishness of NFTs and expressed environmental concerns around blockchain mining.

Blockchain Gaming Is Trending

Square Enix previously created a series of NFTs for its Million Arthur franchise in March 2021. These NFTs were not integrated with gameplay but simply contained digital artwork.

In 2020, the company also took part in a $2.01 million funding round for Animoca Brands—the company behind the blockchain VR game The Sandbox and other blockchain games.

Square Enix is one of many game companies to consider blockchain. Ubisoft recently launched its own NFT platform. Meanwhile, EA and Epic Games have expressed openness to the technology, and GameStop is developing an NFT marketplace as well.

Other companies, such as Steam, have banned crypto and NFTs outright, while brands like Xbox are merely hesitant.

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.