Square Enix is getting serious about its company restructuring.
After over a decade as the President of Square Enix, Yosuke Matsuda will be stepping down. The decision is not yet official; that will have to wait until June of this year after getting approval in the annual shareholder meeting in May. If things go according to plan, the current Director, Takashi Kiryu, will take Matsuda's place.
Struggles Outside Japan
— FINAL FANTASY VII THE FIRST SOLDIER_EN｜FF7FS (@FFVII_FS_EN) January 11, 2023
Square Enix has not been at the top of their game or the peak of their financial success in the last several years. Despite generally positive critical reception from gamers, Marvel's Guardians of the Galaxy failed to meet commercial expectations. Marvel's Avengers was a tedious, grindy mobile game disguised as a console/PC game. Babylon's Fall took the Fall part of its name too literally and suffered a hard fall into obscurity. Chocobo GP has managed to fail despite being a game about the irresistibly adorable chocobos. And Forspoken? It's on its way to becoming the first major PlayStation 5 flop of 2023.
Questionable Asset Sale
Square Enix has expressed its desire to achieve massive success in the global market. Despite these desires, Square Enix sold off numerous development studios last year to Embracer Group for $300 million. These include Crystal Dynamics, Eidos-Montreal, and Square Enix Montreal.
They also lost the rights to over 50 IPs, including, but not limited to, Deus Ex, Tomb Raider, Legacy of Kain, and Thief. These are all very popular, globally-adored franchises. The sale felt extremely counterproductive for a company looking to make it big in the global market. Final Fantasy was already hard-carrying Square Enix, but now? Someone get that franchise a speed-dial chiropractor.
Bullish But Foolish On NFTs and the Blockchain?
All this took place under Matsuda's watch, but we can't forget about the Web3 elephant in the room: NFTs and blockchain technology. Matsuda was a huge pusher in Square Enix's decision to enter the NFT/blockchain space. Under Matsuda, Square Enix invested in numerous crypto-related companies in 2022.
There was just one problem with this; not only did Square Enix's consumer base not share a fraction of Matsuda's giddy optimism about NFTs and the blockchain, but the majority were vehemently against it. And that was before the crypto space took some major hits, most notably the FTX scam/scandal.
Whatever the reasoning, Matsuda is on his way out, and Kiryu should be on his way in. Kiryu will be a younger and fresher face for the company. But will that solve Square Enix's problems?
Same Ambition, Different Face?
In a corporate speak-filled letter explaining their decision to remove Matsuda and insert Kiryu, Square Enix doesn't look to be shying away from its NFT/blockchain ambitions.
— SYMBIOGENESIS (@symbiogenesisPR) November 3, 2022
In his last New Year's letter in January, Matsuda tripled down on his bullish feelings about NFTs and the blockchain and reaffirmed Square Enix's dedication to ramping up their foothold in both spaces. Symbiogenesis, an interactive NFT project, will release sometime in the spring of this year. Square Enix is teaming up with Polygon for the project.
With Forsaken's failure and the Embracer Group sale stripping Square Enix of most of its pre-existing Western IPs, their global ambitions look grim. If Kiryu is to turn things around for Square Enix, quadrupling down on NFTs and the blockchain doesn't seem to be the best strategy. You can put a different guy behind the wheel, but if there's a brick wall ahead, he's still going to crash the car.
Perhaps repairing the ship you're already on is better than trying to invent a spaceship. We'll have to wait and see if Square Enix's gambit pays off.