Business

Square Enix plans to issue tokens and invest heavily in Web3 games

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Gaming giant Square Enix announced in its Q1 earnings report that it will be expanding nonfungible tokens (NFTs) to more gaming products in 2022 as part of its mid-term business strategy.

Square Enix (SE) is a Japanese games developer with $3 billion in assets under management, according to its latest earnings report. The company owns the Final Fantasy property and sold the Tomb Raider franchise on May 3 for $300 million.

The report states that the company has been piloting NFTs at the Shi-San-Sei Million Arthur game since February this year. The success of the pilot program will lead to the second season of the game’s NFTs and ultimately lead to the company pursuing broader activities in the NFT and blockchain industries.

Among the top priorities of its blockchain domain initiatives, SE plans to provide regulatory clarity and guidelines for blockchain gaming, address scalability in NFT economies, and consider establishing a corporate capital venture unit.

The company also stated that it plans to set up a foreign entity that will “issue, manage and invest our own tokens,” suggesting the company will begin creating an expansive gaming token economy.

SE has partnered with Web3 gaming and metaverse venture capital firm Animoca Brands to explore their options in the blockchain gaming space. Collaboration between the two companies is expected to increase as SE delves further into the ecosystem.

Animoca CEO Yat Siu believes that Square Enix’s influence in the gaming space will only help the company gain a foothold in blockchain gaming. He told Cointelegraph on Monday:

“Square Enix has been talking about the potential of blockchain gaming for a long time, so it’s doing better than most of the traditional gaming giants out there.”

Related: GameFi Shows Signs of Mature Landscape: Report

The report cites investing in and monetizing blockchain, artificial intelligence (AI) and cloud computing as the third goal of its mid-term business strategy. This is in line with CEO Yosuke Matsuda’s explicit intention that his company will become more involved in these technologies in January.

Web3 and NFT gaming popularity has remained resilient despite a general downturn in the crypto market in 2022. Market tracker DappRader shows that there were 1 million daily active players on Saturday, almost the same level as January 1st.

However, players are not buying as much as they used to, as the total sales volume for NFT game items fell by 88% from $70 on Jan. 1 to $8.7 million on Saturday.