Square Explains the Difficult Years
Brendan    2014-01-30, 05:06 am.

Fans of the penultimate name in the RPG genre can't deny that it's been a couple of rocky years for Square Enix. Beginning with the 2006 announcements of, and subsequently prolonged development cycles for, the Fabula Nova Crystallis consortium of games the company dramatically shifted its approach to a rapidly transforming market.

Yoichi Wada—current Chairman of the Board and former president—was part of a roundtable at the "Kurokawa School: Thinking the Future of Entertainment" event (translated by DualShockers via 4gamer) and he shared his thoughts on how mobile games, MMOs, remasters, and sequels have effectively saved the company's flagging fortunes. It goes a long way to explaining the existence of mobile apps like Final Fantasy: All the Bravest and Final Fantasy Dimensions, as well as the company's overriding determination to salvage Final Fantasy XIV. Wada goes on to explain that these projects created a cash flow with which Square Enix bankrolled the developments of massive titles like Final Fantasy XIII and what eventually became Final Fantasy XV and even Kingdom Hearts III:

This kind of diversification ensured the availability of funds to continue the development of high end titles and new IPs. Wada-san also added that this business model that does not rely only on conventional packaged sales is still used today even after his resignation.

Key to the revival of Square's fortunes was the purchase of Eidos. As more than 3 million gamers know worldwide, Square's partnership with Eidos produced the critically acclaimed Tomb Raider reboot that debuted in early 2013. Incidentally, Tomb Raider: Definitive Edition is also Square's first published title for PS4 and Xbox One, giving them an instant head-start on publishing titles for seventh generation consoles:

The acquisition of Eidos definitely proved a good choice for Square Enix, bringing forth a basically instantaneous diversification of its portfolio and opening the door to a stronger expansion in the west. On the other hand the development of social games, remakes and sequels created a solid cash flow that can be reinvested in the development of big titles and new IPs.

Wada's place in Square Enix's history remains subjective at best. He presided over the rockiest period in the company's history where relatively few new titles came to market but his strategies brought to fruition the hotly anticipated remasters of Kingdom Hears and Final Fantasy X | X-2, and put the company back on the road to fiscal viability. 2014 will determine the tone for Square Enix in more ways than one and will decide whether the company can nimbly step into the future or will remain rooted in the past.

DonVII    2014-01-30, 09:06 am

Remake Final Fantasy VII == Instant Cash. Why won't they just do it?

kweh!    2014-01-30, 11:23 am

Penultimate name in RPGs? Who would you name as the ultimate name in RPGs?

DonVII    2014-01-30, 14:50 pm

@kweh! Draqon Quest is more popular than Final Fantasy in Japan and I guess the Elder Scrolls series are more popular in the rest of the world.

Brendan    2014-01-30, 18:44 pm

I would argue that Square Enix is no longer the dominant name in the RPG market. They've been all but overtaken by western studios like Bethesda, Blizzard, and Bioware. Square Enix has a legacy, yes, but this is the same studio that has taken a decade on FFXV—ergo, penultimate.

Xin    2014-01-30, 23:03 pm

jRPGs and wRPGs aren't that comparable in my opinion. Plus that would be three companies ahead, so Square still wouldn't be the "penultimate" name lol. If any company has surpassed them in the jRPG market though, it's Atlus.

kweh!    2014-01-31, 00:38 am

I'm not suggesting that SE is the top of the lot, it's just that "penultimate" is very specific.

Brendan    2014-01-31, 04:28 am

Everyone's going to have their own opinion about who the top RPG dog is, but I'm comfortable popping SE into second place. :D

First Class Soldier    2014-01-31, 15:26 pm

Hey Brendan, great article but I call bullshit on their explanation. Between 2005 and 2008, there were enormous flows of cash into Square-Enix. Kingdom Hearts II, Dirge of Cerberus, Final Fantasy XII, Crisis Core, all in addition to the TONS of PSP and DS remakes were hugely successful. But ever since XIII was released, fans had to ask, what were they doing this whole time? XIII was just skin and bones of what their games had been in the past. Hallways, however beautiful, should not have taken more than 5 years to make. As far as I can tell, they managed time and people ineffectively following the release of Final Fantasy XII that only got worse as time went on. They did not spend nearly enough time on what made them money and far too much on spin-offs and cash-ins that could not grow the brand.

DonVII    2014-01-31, 15:42 pm

I think they panicked a little when they saw that western RPGs were taking over. They probably tried to westernize their games in response to that and that might have delayed several of their bigger games thus forcing them to spew out shitty sequels to keep the cash coming in.

Xin    2014-01-31, 18:23 pm

Part of the fall SquareEnix had to deal with was the transition between gens, and how success and finances in one does not directly translate to the other. Look at Sony from PS2 to PS3, Nintendo from Wii to Wii U. Square lost a lot of money developing (and then discarded) next gen Engines, obtaining licenses for engines they were not familiar with and generally not being prepared for the developmental shift.

Japanese development is also very different from the rest of the world, only recently loosening it's grip on secrets and tricks of the trade and generally helping each other instead of holding onto the keys for successful development. This would happen within branches of the same company, not to mention competing companies.

Square's main problem was very much the mindset of Wada, who took the company from bi or tri-annually franchise releases to multiple a year, saturating the market. DQ, KH and FF alone had countless spinoffs. So many to the point no one wanted to play them.

If the company is smart, they will listen to the companies they have acquired, Taito, Eidos, and work with them on diversifying a portfolio of games not just for mobil cash-ins, but the next gen of consoles. Tomb Raider DE and the lengthy wait on FFXV and KH3 aren't great signs so far, but titles like Thief, a revived franchise with potential to find a new audience, and Bravely Default could be beneficial.

Brendan    2014-02-01, 04:26 am

I largely agree with just about everything that's been said by FCS and Xin—especially the comparisons between Square Enix circa 2007 and Square Enix in the present. I think that Wada rightly guessed that western developers might outpace Square, but my impression is that he never defined his vision of what Square Enix ought to be in response to the market shifts from East to West, which created those tumultuous years. Ultimately, the company's failures (XII's messy development, XIII's "hallways", and the first edition of FFXIV) must fall to him. Granted, he didn't personally direct those games but he appointed the men and women that ran those franchises and the company's reputation into the ground.

First Class Soldier    2014-02-03, 20:07 pm

Exactly! Going off of what Brendan said, this really did not have to happen. Changes in the gaming world such as new consoles and general tastes and preferences may have slowed them down, but not completely thrown them into the devastating financial state in which they found themselves at the end of 2011. Considering all the commercial (if not always critical) successes they enjoyed between 1997 and 2007, they had both the recourses and the capital to develop the yearly FF DS/PSP remake, a spin-off title, AND a major new console release ie: FFXIII, and KH III although as with other studios, the major releases should have been expected conservatively between two and four years. The consumer is always right. In 2007, they should have listened to the market and delivered Crisis Core, Birth by Sleep, and Dissidia but then gone on to focus their energies on Final Fantasy XIII and Versus XIII in the PS3 generation and then an MMO (XIV) and KH III and possibly a FF VII remake to finish the compilation within the first two years of this current generation.

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