Square Enix Talks Future
12.04.07 - 4:32 PM

In an interview with CNET Japan, Square Enix president Youichi Wada talked about his company's future strategy and the state of the overall game industry. Wada apparently is content with the industry's current state, saying all segments (software, hardware as well as the arcade business) are performing very well. Asked about the three next-generation consoles, Wada explained the Wii was so successful, because it was different from PlayStation 3 and Xbox 360. Wada considers the Xbox 360 exactly the opposite of the Wii, namely a game machine targeting the hardcore audience. As for PlayStation 3, the Square Enix president said he still wasn't sure yet where Sony Computer Entertainment wants to position the system. Therefore, he wants Sony to clearly define, whether PlayStation 3 is marketed as a game machine or a high-powered consumer electronics product.

Asked about downloadable content, Wada argued that it would become a standard feature in the future, as a shift from purchasing content in a real store to buying it online is occurring. While he views this shift as irreversible, he seems convinced that it won't be the end of the retail business. While Wada apparently believes it would be difficult to offer downloadable content for the DS, given the handheld's current lack of storage space, he apparently has high hopes for the future of downloadable content on PlayStation Portable.

Wada disputed his interview partner's suggestion that Square Enix had recently released a lot of sequels and remakes, by saying both sequels to existing IPs and original games were necessary to grow the business. He explained 60% of Square Enix's profits came from existing IPs, whereas 40% were generated by original titles. He also refuted the common held perception that Square Enix was overly dependent on its flagship Final Fantasy and Dragon Quest series, saying they accounted for less than 50% of the profit. And while the company was trying to further reduce its dependence on these franchises, he remarked people kept asking about new installments of either series.

He was also bullish about Square Enix's position in the game center business. Through its ownership of struggling Taito, the company has gained a strong foothold in this sector and after some initial restructuring, the future apparently looks bright, as Wada sees a widening gap between Taito and its competitors.

Looking ahead, Square Enix's top executive wants to establish Square Enix as the top company in the game business. While he admitted it would be difficult to achieve this goal within a five year time period, he was confident that the company will belong to the top 3 in five years.

Chris Winkler

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