Square Enix sells off studios and IPs to invest in blockchain gaming
Japanese video game company Square Enix has taken a bold step toward embracing blockchain-powered gaming. The company signed a deal to sell off some of its game development studios and intellectual property (IP) to fund new blockchain, AI, and cloud services investments.
The deal was made with a Swedish gaming company Embracer, who is paying Square Enix $300 million. Square Enix will hand over two of its North America-based studios, Crystal Dynamics and Eidos Interactive, as well as several popular game series, including Tomb Raider, Deus Ex, Thief, Legacy of Kain, and more than 50 back-catalog games.
In a letter, Square Enix President Yosuke Matsuda said the move would assist the company in changing its global business environment. It will also solidify the company’s core business in the digital entertainment domain. But most of all, it enables the launch of its investment in the blockchain, AI, and cloud fields.
“…the Transaction enables the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud,” Matsuda said.
In the deal, which is slated to be completed between July and September 2022, Embracer will increase its staff by more than 1,100, the company revealed. The deal also includes the recently announced installation of tomb raider, a game that has sold more than 88 million copies.
Meanwhile, Square Enix has long set its sights on developing play-to-earn games backed by NFTs and blockchain technology. In an interview with Yahoo Japan earlier this month, Matsuda shared that focusing on traditional games would not be enough for the company as gamers’ interest was shifting.
“If, instead of relying on goodwill, we can also provide incentives to those who contribute to development by utilizing technologies such as blockchain, there is a possibility that innovative and interesting content can be created from the ideas of users,” he said.
The gaming industry still opposes NFT powered, play-to-earn model
Experts have predicted that the gaming industry will be dominated by play-to-earn gaming in the future. Alexis Ohanian, the co-founder of Reddit, stated that he believes that more people will seek to be paid for spending time playing games in the next five years.
Similar to Square Enix, gaming companies like Electronic Arts are also paying attention to the model. However, the model has been receiving serious pushback from some factions of gamers and game developers alike.
Bloomberg reported that both players and some developers of Minecraft have kicked back against the company’s plans for integrating NFTs. The developers cite environmental impact concerns of blockchain technology.
Watch: BSV Stories – Episode 5: Unlocking the potential of blockchain gaming
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