In an open New Year’s letter, Square Enix president Yosuke Matsuda has detailed plans to explore potential new services, adapt rapidly to new platforms, and expand "aggressively" in overseas markets.
Reflecting on the "unpredictability of future developments in the regulatory landscape for games in China" – suggesting the message was possibly written before the lifting of China’s recent publication ban – Matsuda said Square Enix intended to "pursue a global strategy that involves building collaborative and cooperative relationships" beyond Chinese publishers and developers, aligning itself with many "business alliances in regions other than China".
"We plan to relaunch our dormant Indian subsidiary and pursue the robust expansion of our Indian business," Matsuda said. "Given India’s developing telecommunications and payment infrastructure, we see it as an extremely promising market for entertainment consumption in terms of both the size of its population and its economic power. As we restart our business there this year, we will also have representation from our Japan team on the ground in India. We will work to ensure a powerful launch and to establish solid underpinnings for our Indian business."
"We are likely to see a variety of major changes in the digital content industry and elsewhere in 2019," he added. "The fluidity and unpredictability of the situation are all the more reason that there should also be major opportunities. With its imperial throne scheduled to change hands, Japan will ring in a new era in 2019. The entire Square Enix Group will work to ensure that the year is also one of dramatic new progress for us."
Matsuda also reflected on how the current generation of game consoles "has entered the late stage", and considered how cloud streaming services for gaming "have at last begun to show signs of taking off".
"Streaming is likely to bring a number of new platform operators into the market in addition to the existing console providers, while platform holders are also joining the PC gaming space," said Matsuda. "These developments produce a growing number of avenues through which game publishers and developers can provide content. In particular, game streaming services will be the ultimate driver of a rapid transition from the sale of games in boxes to digital consumption. Streaming also lends itself to new subscription-based business models, so we believe deciding how to engage with these forthcoming trends will be key to future growth."
Square Enix released its financial results for the six month period that ended on September 30th 2018 – and it was not looking bright for the Japanese firm. Net sales were down 15 per cent compared to the same period last year, while operating income plunged 61 per cent year-on-year to ¥10bn (£67.5m) compared to last year’s ¥25bn (£173m).
Following the release of this financial report, Square Enix announced that Final Fantasy XV’s upcoming DLC, due to launch throughout 2019, was being cancelled, with Hajime Tabata resigning from Square Enix and Luminous Productions. In a statement, Tabata said: "I was able to gain so much experience with my time at Square Enix. Every title I was able to be a part of means a lot to me. However, Final Fantasy XV stood out from that group as it was a special project for me which I went all-in on." He added: "In regards to my next endeavors and near future, I have a project that I truly wish to solidify as my next challenge after Final Fantasy XV. For that reason, I have decided to leave my current position and start my own business in order to achieve my goal."