Square Enix Annual Stockholder Meeting Report
06.20.05 - 9:46 PM

Square Enix held its annual stockholders meeting in the Century Hyatt in Tokyo's Shinjuku district on Saturday the 18th. In the Q&A session following the presentation of the financial data, company representatives stressed the fact that all three next generation consoles as well as the two new handheld system featured online connectivity. The company pledged to further enhance its position in the worldwide market for online games. In Japan, Square Enix's current market share in this growth market was 50% and progress was being made in Europe. Asked whether management would consider cooperating with other companies from abroad, president Youichi Wada pointed to the localization of EverQuest II, saying Square Enix will be flexible in that regard.

With consolidation in the game industry continuing at rapid pace, one attendee remarked that it would be possible to acquire Square Enix for 200 billion yen (1.84 billion US). In response, Wada explained that money could buy only so much. In Square Enix's case, the two key assets were users and creators. Both could not be bought with money. The creative assets were stowed away in the heads of the developers. If those creative assets were removed, the company would be worthless.

The board of directors' external member and president of Inspire Makoto Naruke was then asked, what he considered Square Enix's blind spot. Naruke said, the company was facing a lack of developers. Since it was not possible to wait for the government to act, the company itself had to focus on education. Square Enix also should work towards setting up a multiplatform strategy and expand into foreign markets outside Japan.

Afterwards the audience was treated to trailers of Kingdom Hearts II, Final Fantasy XII and Final Fantasy VII: Advent Children. Since the trailers were identical to the ones shown at last month's Electronic Entertainment Expo, no new information was released.

Afterwards, president Youichi Wada, vice president Keiji Honda, the head of the company's second production team and member of the board Akitoshi Kawazu, as well as director Yousuke Matsuda answered more questions from the audience.

At this occasion, it was clarified that Square Enix had no connection to Hironobu Sakaguchi's new company Mistwalker. Asked about developers in their 40s, 50s and 60s, the four explained that since the industry is only 20 years old, developers have yet to reach their career goals. Since they had no idea what will happen when they turn 50 or 60, developers were moving ahead with a feeling of uneasiness. For that very reason, it was necessary to give young developers a chance to prove themselves.

While the company was hoping to sell three to four million copies of Final Fantasy XII in Japan, the current budget assumes sales of less than three million copies.

The development of about half of the games published by the company were being outsourced. For some internally developed games, things like character art, CG sequences and music are also occasionally outsourced.

One member of the audience pointed to the long development cycles for the Dragon Quest series. Youichi Wada however replied that it won't take another five years for Dragon Quest IX to be available. The company was also looking into using the world of Dragon Quest VIII and its characters to create spin-offs. Additionally, new Dragon Quest Monsters and Fushigi no Dungeon titles would also be forthcoming.

Chris Winkler

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