March 6th 2013, and Square Enix’s UK team were in jubilant spirits.
The publisher had just released Tomb Raider, which achieved the highest Metacritic rating since the 1996 original and went on the sell hundreds of thousands of units in a matter of days.
And that followed a 2012 where the firm had launched the UK’s best-selling new IP (Sleeping Dogs) and its new Hitman game was amongst the five best-selling video games of the year.
Two weeks later, and that joyous mood disappeared. Square Enix’s senior management announced these results weren’t good enough. The publisher’s Western division had failed to meet its targets and the company would undertake major reforms. President Yoichi Wada stepped down.
“I view it quite simply – like many businesses we had high expectations for all three games across all our major territories and we had to work really hard throughout the launch phase and this last nine months to realise the full potential for each game,” said Square Enix’s America and Europe CEO Phil Rogers.
“In some ways the reported shortfalls –coupled with the supportive comments from gamers - just spurred us on to work harder across our box and digital teams, worldwide. I’ve got to say that was pleasing at the end of the day.”
Nevertheless, questions were being asked of Square Enix, not just internally but by the wider games media. How could a game like Tomb Raider sell over 4m units and somehow be deemed a disappointment? Were expectations too high? Did the company simply spend too much money making it?
“I wouldn’t say costs were not tightly controlled. As a group we use a greenlight process that is pretty disciplined and acts as a good control for all aspects of our projects, from design and production to marketing and budgets,” defends Rogers, before explaining why it was important the firm took its time to build Tomb Raider.
“Big games need a lot of work and we have to work with our eyes wide open to what’s needed to make the games both enjoyable and successful. With Tomb Raider it was a really important reboot for the IP and we had to get it right. We took decisions on a new direction and had to deliver on it. The team at Crystal Dynamics worked with a great deal of energy and learnt a lot through the re-boot and we’ve now got valuable design and production experience on how we build more of a non-linear structure for Tomb Raider; and in systems we made huge steps forward in combat and making Lara Croft feel human and relevant. I genuinely feel these were all the right investments to make sure we get Tomb Raider set up to excite gamers again.”
"When we look at how we take Square Enix forward,
we have to adopt openness and transparency."
That’s history now. Square Enix has re-emerged from its restructure, and the change is already noticeable.
Whether it’s in admitting its past mistakes, or telling its fans about upcoming projects that haven’t been formally announced yet, the company appears – at least on the surface – to be significantly more open with its gamers. Even Rogers himself has been updating fans via the Square Enix blog.
“It is all very deliberate,” he tells us. “We are entering a new world – and I don’t just mean gaming here. It’s a connected world, consumers are hyper-aware.
“When we look at how we take Square Enix forward in this era we have to adopt openness and transparency. I think our games, brands and us as a company must talk openly, must engage and must be true to our promises. Of course many will point out that there’s risk in doing this but if we can do this we’ll capture hearts and minds, earn trust and command loyalty and premium.
“So we must be in touch and listen to consumers and respond. A couple of years ago someone told me as CEO I should go and spend a week living with one of our fans, to help understand how they see and touch our games. The person giving the advice was someone working on the leading edge of consumer engagement. It was great to talk this through with him and although I didn’t organise myself to do it, it contributed to my conviction today to drive openness.
“Our communications are at an early stage but it has to start somewhere and it’s something I am committed to. Take last week when a cancelled Hitman story appeared online which you reported here on MCV – if I think back to a year ago we probably wouldn’t have commented on it but we’re changing that. I don’t want people to be confused about what we’re doing.
"Today, the Hitman team at IO are planning to send out an open letter to fans to explain some of their plans for the next Hitman game, it’s an open approach which we hope will help to bring the community closer to the game to deepen the relationship and strengthen the trust.”
That openness exists throughout Square Enix. Naoki Yoshida, the man tasked with fixing and re-releasing the MMO Final Fantasy XIV, was candid in his interview on the mistakes of the original game, and how the firm could never let the fans down again. The game he created (last August’s Final Fantasy: A Realm Reborn) was a significantly better game, and has 600,000 paying subscribers.
“The direct relationship Yoshida and the FFXIV team have forged with the players is superb, it’s a great example of how we want to work and hopefully it goes some way to gaining trust with fans,” adds Rogers.
"I think Deus Ex: The Fall showed a lot of people
what the potential is for mobile games, but console
experiences on mobile and tablet are still niche."
Square’s big franchises may not have met their lofty expectations, but the publisher continues to believe in triple-A console games – which is fortunate considering the initial launch sales of PS4 and Xbox One.
The company will launch Thief next month, and it has already confirmed work is underway on a new Hitman, Deus Ex and Tomb Raider.
But this is just one side of Square, the one with the big Western IP. The company is in the process of re-launching its Final Fantasy series – a process that started with the FFXIV reboot last year. Then there’s its free-to-play titles, and it’s indie developer programme.
And then there’s its huge investment in mobile.
MCV met some of Square’s mobile developers at E3 last year, when the firm showcased a number of ambitious projects, including Deus Ex: The Fall, which it released in July 2013. The iOS game was notable for its console-quality production values, and although it wasn’t completely successful, Rogers says it shows what you can achieve on the mobile platform.
“The technology is getting more powerful year on year and we’re spending more and more of our time, as consumers, accessing information and entertainment through them,” he says.
“They’re of course not dedicated gaming devices; but I see them as ways to deliver new experiences to grow a new audience or deepen and extend an existing game. We’ve got to be open-minded here.
“With Deus Ex: The Fall, we learnt a lot; we created a game very much true to Deus Ex with a compelling story and mechanics based on a successful console game. It won a lot of awards and was labelled the ‘first console product on mobile’. Internally I think it showed a lot of people what the potential is for mobile games, but console experiences on mobile and tablet are still niche and the genre is dominated by casual experiences.
“To me the goal was to see if we can open up Deus Ex to more people, while also engaging core fans as well. We partly achieved that but we need to ask ourselves some questions. Did we choose the right platform? Did we get the controls perfect for those platforms? We’re always trying to learn from what we do and we’ll keep doing that.”
"We understand that generally a lot of
gamers don't like free-to-play."
That thinking extends to Square’s free-to-play titles, too. But free games is another tricky area for the publisher to manage.
Freemium has become somewhat of a dirty word for gamers – just read the gaming forums. Some see them as being a byword for ‘rubbish’ others see them as simply a means to generate more money out of fans. And at times you can see why.
So how does Rogers and his team, who are eager to gain the trust and loyalty of core gamers, handle this scepticism when creating its free games?
“Very carefully, openly and with respect,” details Rogers.
“Today people might be suspicious of free-to-play – some people fear this is a tag for low quality although many see free to play games pushing boundaries in terms of quality and fun. We understand that generally a lot of core gamers don’t like the idea of free-to-play if it’s really seen as a way to charge them more than they want for something. That’s not the intention nor is it a strategy that will last and take any business forward.
“But free-to-play is one business model, not the only business model. And while we're making games for a variety of audiences, we still have a lot of focus for those day one gamers that have such amazing passion, and which – frankly – this business has been built on. We have no plans to abandon them, and we value their responses – even if sometimes that can be emotion and hard to read.
“To me different business models give us an option to make different games for different gamers - as game creators we want to deliver a quality and engaging game without comprise and regardless of business model and always mindful of who we are making the game for.
“And that’s a core responsibility for Square Enix here in London where we’ve centred a Live team focused on working and learning with games such as Heroes & Generals and Nosgoth [above]. Both of these are free-to-play and our teams are engaging earlier with the core gamers to get their insights and help steer the game’s direction. I love to see this – it’s another example of the openness we want to build to take our games forward.
“We want our consumers to help us here so when we explore new areas, which every company needs to do, we need to be upfront on what we’re doing.”
"There's so much change around us and within us,
but we have the talent to create games
that remain in our players' hearts."
Square Enix has it all to prove. It has to re-establish Final Fantasy, generate profit from its big Western IP, crack mobile and work out free-to-play, all while maintaining the critical acclaim afforded to its games over the last few years.
It’ll require a lot of hard work and not everything will go to plan. But Rogers paints a more stable, optimistic and forward-looking Square Enix, one that’s moved beyond the doom and gloom from last year.
“Square Enix is a great gaming company – we have an incredible history and we have an incredible future ahead,” concludes Rogers.
“Of course there’s so much change around us and within us but we have the talent to create games that remain in our players' hearts for a long period of time.
“I’m personally proud of the games we have developed in my time with the organisation and in terms of how we’re shaping up, we have some fantastic brands, we have some of the most creatively talented people I’ve ever worked with and we have some of the most passionate consumers. I’m excited about the future.”