Game developer Square Enix plans to invest heavily in Web3 games

Gaming giant Square Enix revealed in its first-quarter earnings report that it will expand non-fungible tokens (NFTs) into more game products as part of its mid-2022 business strategy.

Japanese game developer Square Enix (SE) manages $3 billion in assets, according to its latest earnings report. The company, which owns the rights to Final Fantasy, sold the Tomb Raider franchise on May 3 for $300 million.

The company began piloting NFTs in the Shi-San-Sei Million Arthur game in February, the report said. The success of this pilot project will lead to the use of NFTs in the second season of the game and eventually see the company launch a wider activity in the NFT and blockchain industries.

Among the top priorities of its initiatives in the blockchain space, SE plans to establish clear regulatory transparency and guidelines for blockchain games, address scalability issues in the NFT economy, and consider launching a corporate venture capital arm.

The company also said it plans to establish an overseas entity that will handle "issuing, managing and investing in its own tokens," suggesting that the company will start creating a large gaming token economy.

SE has been working with Web3 gaming and metaverse venture capital firm Animoca Brands to explore its options in the blockchain gaming space. The cooperation between the two companies is expected to expand further as SE moves further into the ecosystem.

Yat Siu, executive chairman of Animoca, believes that Square Enix's influence in the game field will help the company gain a firm foothold in the blockchain game field. On Monday, he told Cointelegraph:

"Square Enix has been talking about the potential of blockchain games for a long time, so it will do better than most traditional gaming giants."

The report identified investment and monetization in blockchain, artificial intelligence (AI) and cloud computing as the third objective of its medium-term business strategy. This is in line with the intention expressed by the company's chief executive Yosuke Matsuda in January that his company would become more involved in these technologies.

Despite the general downturn in the crypto market, the popularity of Web3 and NFT games remains strong throughout 2022. Market tracker DappRader showed 1 million daily active players on Saturday, almost on par with Jan. 1.

However, players aren’t buying as much as they used to, with total sales of NFT game items dropping 88% from 70 million on Jan. 1 to $8.7 million on Saturday.

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