Square Enix is investing in blockchain gaming infrastructure to expand its NFT ecosystem.
Square Enix revealed in its first-quarter earnings report that it will incorporate nonfungible tokens (NFT) into more game products as part of its medium-term business strategy in 2022.
According to its most recent earnings report, Square Enix (SE) is a Japanese game developer with $3 billion in assets under management. The company owns the Final Fantasy franchise and purchased the Tomb Raider franchise for $300 million on May 3.
According to the report, the company began testing NFTs on the Shi-San-Sei Million Arthur game in February of this year. The pilot program’s success will pave the way for the game’s NFTs to return for a second season, and the firm will eventually pursue broader activities in the NFT and blockchain industries.
SE intends to establish regulatory clarity and guidelines for blockchain games, address scalability in NFT economies, and consider establishing a corporate capital venture unit as the top priority of its blockchain domain initiatives.
The company also stated that it intends to establish an overseas entity to handle “issuing, managing, and investing our tokens,” implying that the company will begin developing a large gaming token economy.
SE has been exploring its options in the blockchain gaming space with Web3 gaming and Metaverse venture capital firm Animoca Brands. As SE delves deeper into the ecosystem, the two companies’ collaboration is expected to grow.
Animoca’s Executive Chairman Yat Siu believes Square Enix’s gaming influence will only help the company establish a foothold in blockchain gaming. Today, he said:
“Square Enix has already been talking about the potential of blockchain games for a long time so they get it better than most of the traditional gaming giants out there.”
The report’s third goal in its medium-term business strategy is to invest in and monetize blockchain, artificial intelligence (AI), and cloud computing. This is consistent with CEO Yosuke Matsuda’s stated intention in January for his company to become more involved in those technologies.
Despite a general crypto market downturn, the popularity of Web3 and NFT gaming has remained strong throughout 2022. According to market tracker DappRader, there were 1 million daily active gamers on May 14, nearly the same number as on January 1.
However, gamers are not purchasing as much as they used to, with total sales volume for NFT game items falling 88 percent from $70 on January 1 to $8.7 million on May 14.
