Square Enix President Pens a New Year’s Letter All About NFTs, Blockchain Games, the Metaverse, and More

Square Enix President Pens a New Year's Letter All About NFTs, Blockchain Games, the Metaverse, and More

Yosuke Matsuda, the president of Square Enix, has started the year 2022 with a New Year’s letter focused on the company’s growing focus on NFTs, blockchain games, and the metaverse. Matsuda started the letter by wishing everyone a Happy New Year and stating, “In 2021, the metaverse was a hot topic, sparking a lively global conversation about what the Metaverse is and what it presents.”

Matsuda then mentioned Facebook’s name change to Meta and how that was just one piece of “evidence that the concept is not a mere buzzword but here to remain,” and that this attention spurred 2021 to be dubbed the “Metaverse Year.”

Matsuda added, “As this abstract concept starts to gain concrete shape in the form of product and service offerings, I am hopeful that it will bring about changes that will be a more significant impact on our business as well.”

The next topic of discussion was NFTs, or non-fungible tokens, and Matsuda began by saying, “Despite the fact that there are unfortunate “examples here and there of overheated trading in NFT-based digital goods with somewhat speculative overtones, regardless of the observed value of the content provided,” he maintains the ship will right itself.

This, obviously, is not an ideal situation, but as digital goods deals become more popular among the general public, I hope for them to become as familiar as physical goods, with the value of each available content repaired to their true estimated worth. As for how this is connected to Square Enix, Matsuda said in May 2020 that “the company behind the Final Fantasy series, the upcoming Forspoken, and much more, identified AI, the cloud, and blockchain games as new domains on which we should concentrate our investments, and we have been aggressive in our R&D efforts and investments in those areas.”

The focus has been primarily on natural language processing, world models, and simulation technology, but Matsuda explained that “we aim to apply the output of these R&D efforts to a wide variety of content and provision the relevant technology to other companies across our entire Digital Entertainment business.”

On the cloud front, Square Enix is looking into this tech from two main angles, the first of which is to use cloud technologies to distribute content and the other of which are to create content that provides customers with new forms of excitement enabled by the cloud’s attributes.

“By contrast, blockchain games, which have emerged from their infancy and are at this very moment entering a growth phase, are built upon the premise of a token economy and therefore hold the potential to enable self-sustaining game growth,” Matsuda said. “The driver that most enables such self-sustaining game growth is diversity, both in how people engage with interactive content like games, and in their motivations for doing so. Advances in token economies will likely add further momentum to this trend of diversification. I see the “play to earn” concept that has people so excited as a prime example of this.”

While he recognizes that those who “play to have fun” and “currently make up the majority” have “reservations toward these new trends,” he also offers that there is a different side to the coin that is worth exploring.

This fact, however, is not related to the limitations of existing UGC (user-generated content). Matsuda said, “Traditional gaming has provided no obvious incentive to this latter group of people, who are motivated solely by inconsistent personal feelings such as goodwill and volunteer spirit.” UGC was erected solely because of individuals’ desire for self-expression, not because there had any explicit incentive to reward them for their creative efforts. I view this as one of the reasons that there hasn’t been as many major game-changing content generated by users as one would hoped.

Matsuda thinks that “users will be presented with clear incentives, resulting in greater consistency in their motivation, as well as greater possibilities of games developing in exciting ways.” This will be easy thanks to blockchain-based tokens that will enable.

All of this and more has led to Matsuda saying that this ecosystem “lies at the heart of what I speak to as ‘decentralized gaming,” and that he hopes it will become a big trend in gaming in the future. It is precisely this type of ecosystem that is at the heart of what I speak to as “decentralized gaming,” and I believe that this is a big trend in gaming going forward.

“The basic and elemental technologies requested to make blockchain games are already available, and there has been an increase in the level of societal literacy and acceptance of crypto assets in recent years.” We will maintain a tight eye on societal shifts in this space while listening to the many diverse groups of users who use it, and ramp up our efforts to develop a business in accordance, with an eye to possibly issuing our own tokens in the future.

In conclusion, Matsuda concludes that “the new technologies and concepts that I have discussed, as well as the changes that they make to our business environment, will provision us with numerous opportunities to enrich people’s lives through digital entertainment, which is at the heart of our business.” “I hope you all the best in 2022,” he added.

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