Square Enix Explains Strategy in Allocating Resources to Games (Mostly Japanese) & Studio Investing

Square Enix shared interesting information about the sale of some of the publisher's western studios and its future investment strategy, setting the record straight on previous mistranslations and misinterpretations.

[crazyCoconuts]

“The cost of developing a single title is on the rise. As such, owning studios outright means that while you can expect major returns, your downside risk is also substantial. The result of this is greater‐than‐expected earnings volatility. Therefore, rather than insisting on full ownership, we want to additionally adopt other approaches such as forming joint ventures and taking minority stakes... "
Interesting to see this spelled out so clearly. Props to the studios that actually do take the risks and deliver constantly- it's obviously a difficult thing to do

[Eonjay]

It was obvious a while ago and I have been saying it from the beginning. People were acting like they were selling their studios for nothing just to be bought by Sony or something like that but they have already revealed the ROIs for several of their western owned studios/games. They made orders of magnitude more money selling the studios then they got from investing in AAA projects. The problem is that AAA development is beyond expensive.

[crazyCoconuts]

Then I guess we shouldn't be surprised when the retail price goes up to, say, $70

[blackblades]

@Crazy people always B* about the $70 tag with Sony but if they want next gen looking games they gonna have to had the $ over for the budget.

[Crows90]

AAA is not expensive. Hades to me was a triple A title. Cod to me is a AA title and the same with the assassin's Creed. They spend more money with those titles due to mismanagement. Look at a plague tale innocence. Small dev team but great game. So many cases of amazing games without the triple AAA budget.

[pietro1212]

crows90
Hades was not an AAA title. Compare Hades budget to a CoD title or Assassin Creed title despite how you feel about them quality wise, they’re not the same.

[Abracadabra]

Cost of developing a single title is on the rise and yet Square Enix are still making exclusive deals with their games.
Now, that's a very smart move... /s

[GamingSinceForever]

My guess is with the exclusivity deals they share the burden of said production costs.

[Eonjay]

Making their games multiplatform was not a guareentee of success as you can see. Plus they can enter into an agreement for exclusive release, share the risk with the platform holder, have their marketing paid for, and focus of delivering a top end expereince for an audience that is actually interested. At the end of the day these deals are usuallly timed which mean they can still move on to other platforms.

[shinoff2183]

Sometimes id rather get some of the square games they are putting on switch instead of ff on the playstation. Atleast on the switch the games still seem to be jrpg not western action games.

[ALMGNOON]

making exclusive deals literally makes them more money because using resources and wasting money on releasing it on a console that will not buy the game anyway is a waste.

[Abracadabra]

Think about what you saying... if sales on Xbox are irrelevant, then, why does Sony even bother making exclusive deals with Square?
Square would just release their games on both consoles and Sony had nothing to worry about, since most of Square games would sell on the PS5.

According to your logic, Sony are spending money of exclusives deals that they don't necessarily need.

[Abriael]

In case someone is wondering, this is the actual official translation that came out today of the bullshit we saw about Square Enix allegedly being afraid that western games would "cannibalize the sales of Japanese games" or that they wanted to sell stakes in their existing studios.

Both points were false, coming from websites that took obvious mistranslations/distortions from a dude on Twitter and ran them as news. 🤔

[Eonjay]

Thank you.

[shinoff2183]

Are you surprised. Everyvody always wanna be the one that got it right. Making 100 predictions. And if ones right. See see i told you so

[jznrpg]

That’s why people believe in conspiracies . They feel special “knowing” things others don’t .
My mother in law is a prime example. Alien governments , dogmen, new banking systems that never happened , all kinds of stuff.
From right wing conspiracy sites spreading misinformation about government to sites talking about Bigfoot with space ships she believes them all. It’s funny (sad really) because it’s so normal now I hear people at work talk about the same stuff sometimes . Anyone can makeup “evidence” that’s typed out with what you think is real . Doesn’t make it a real official document . I see them on Twitter this is my proof . But it looks like bullshit no official names or anything just what they want to see. Craziness

[Abriael]

This isn't about predictions, mind you. This is literally about someone sharing a nonsensical distortion/mistranslation of what Square Enix's CEO said and websites literally reproducing it into "news" without verifying.

Because "Square Enix CEO Makes no sense" is good for traffic, pretty much.

[Crows90]

@jznrpg
Nothing to do with conspiracy theories. This is just mistranslation.

But conspiracy theories are always labeled as such...especially the more believable ones...by the same people that would be negatively impacted if true. Food for thought.