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Yosuke Matsuda, president of Square Enix, the Japanese developer behind video games like Final Fantasy and Kingdom Hearts, has set his sights firmly on NFTs and blockchain technology.
"I see 2021 not only as 'Metaverse: Year One,' but also as 'NFTs: Year One,' given that it was a year in which NFTs were met with a great deal of enthusiasm by a rapidly expanding user base," Matsuda said in a New Year's Letter.
The president also attributed much of the metaverse momentum to "sophisticated blockchain technology," before reiterating Square Enix's changing strategy to meet this new environment.
"To address these changes in our business environment, the medium-term business strategy that we unveiled in May 2020 identified AI, the cloud, and blockchain games as new domains on which we should focus our investments," he said, adding that Square Enix has been "aggressive" in research and development in these areas.
The announcement is not the first time Square Enix has focused on the link between blockchain and games.
In November last year, the gaming company first signaled its intention to explore the NFT space by offering consumers collectibles and blockchain video games. In March of 2020, the Japanese developer also invested in Ethereum-based Sandbox.
The future of gaming?
According to Matsuda, there is a fundamental contrast between traditional games and blockchain games.
"Games have traditionally involved an unidirectional flow whereby creators such as ourselves provide a game to the consumers that play them," he said.
"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," he added.
Matsuda also recognized the perceived tension between gamers or people who "play to have fun," according to Matsuda, and those who "play to contribute."
That demographic refers to people who play to "help make the game more exciting," he said.
"Traditional gaming has offered no explicit incentive to this latter group of people, who were motivated strictly by such inconsistent personal feelings as goodwill and volunteer spirit," he added.
That, however, may change in 2022, at least if Matsuda has anything to say about it. "By designing viable token economies into our games, we will enable self-sustaining game growth," he also said.
Blockchains and the gaming industry
Despite Matsuda's enthusiasm, there has been an ongoing controversy between blockchain technology, NFT advocates, and the traditional gaming industry.
Before Christmas, Ubisoft said that it would continue its video game NFT initiative despite significant pushback from fans. Ubisoft called NFTs a "major change" for video game enthusiasts.
However, the same can't be said for GSC Game World, which abandoned pre-existing plans to incorporate NFTs into their upcoming STALKER 2 title.