Square Enix, according to its documents, has released its updated mid-term plan. It aims to strengthen the blockchain pivot. The company will still invest in companies that are key in the blockchain space, such as Animoca Brands or The Sandbox. It will also look into other possible investments. Square Enix sold its Western studios recently for $300 million. However, the company will not use these funds to make new Web3 investments.
Square Enix Structures Blockchain Strategy
Square Enix, a Japanese gaming firm, appears determined to add blockchain and Play-to-earn as part its future business strategy and monetization plan. The company revealed its plans for blockchain and play to earn and announced the investment it would make in the area during the recent earnings call.
As part of its mid-term business strategy, the company reported taking on new domains, meaning that it will be putting funds behind new fields, including what it calls the “blockchain entertainment domain.”
Square Enix also plans to take other concrete steps in relation to its blockchain pivot. The company will seek to “establish regulatory clarity and guidelines for blockchain games,” including NFT zones and experiences. Square Enix may also consider issuing fungible tokens that are exclusive to the company and complementing them with games where they will be included in world-building. This suggests that new IPs could be created using blockchain, NFTs, and play-to-earn.
New Ventures and Business Structure
It also disclosed new investments in existing companies operating in the Web3/metaverse space. The company mentions Animoca Brands with a large portfolio of investments in blockchain gaming and The Sandbox as one of the pioneering experiences to be launched via Web3 or metaverse.
Square Enix is among the companies who have tried to incorporate these technologies into their business models in a well-structured way. Similar developers, such as Ubisoft or Konami, have begun to explore the area, although perhaps without a clear approach.
Earlier this month, the company sold part of its Western studios and operations to the Embracer Group for $300 million, and declared this transaction important to enabling “the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud.” However, according to statements of the company in the earnings call, the $300 million will be directed to reinforce the core business of Square Enix. Analyst David Gibson reportedThe new venture will require different financing, which is separate from existing funds.
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