Square Enix is a renowned force in the video game industry that has long been celebrated for its substantial contributions to gaming culture. The company was established in 1983 and has carved a niche for itself, particularly in the role-playing game (RPG) genre. Its legacy is anchored by iconic series such as Final Fantasy, Dragon Quest, and Kingdom Hearts, which have captivated audiences worldwide with their intricate storytelling, innovative gameplay, and groundbreaking graphics.
Despite its illustrious history and influence, it currently confronts a significant challenge. Following the release of Final Fantasy XVI on June 22, the company has experienced a dramatic decline, with its market value plummeting by nearly $2 billion. This downturn is particularly noteworthy considering the game’s initial commercial success, where the PlayStation 5 exclusive boasted impressive sales of three million copies in the first week alone. Such a stark contrast between high sales figures and the subsequent drop in market value represents a crucial phase in the company’s journey, underscoring the volatile nature of the gaming industry and the unpredictable impacts of major releases. Despite this, shares of Square Enix have plunged by nearly 30%, hitting their lowest since May of the previous year.
Sources familiar with the game’s performance have indicated a significant slowdown in sales post-launch. Adding to the narrative, Square Enix announced two paid DLC expansions for Final Fantasy XVI and confirmed the development of a PC port.
Bloomberg’s recent report on Square Enix paints a grim picture, highlighting a sharp decline in profits reported in August. Analysts pointed out that the performance of Final Fantasy XVI has yet to compensate for the underwhelming outcomes of other titles like Marvel’s Avengers and Forspoken. It also sheds light on internal management issues, suggesting that the autonomy given to producers in determining the scope and direction of projects has led to inconsistencies in the quality of the complete product, resulting in unpredictability in the company’s portfolio.
Amidst these challenges, the Final Fantasy series stands out as a jewel in Square Enix’s crown. The franchise has always been more than just its main storyline and battles. An aspect that significantly enhances player engagement in these games is the inclusion of mini-games and side activities, many of which incorporate gambling or casino-like elements. A prime example is the Gold Saucer in Final Fantasy VII, an amusement park featuring a myriad of mini-games. This virtual paradise offered players a break from the main quest, inviting them to indulge in different sorts of activities. All these minigames (and new ones) will be there and looking sharper than ever in FF7 Rebirth, which will be a huge game worthy of a Platinum Guide.
These mini-games serve multiple purposes. They provide a rich, immersive experience, allowing players to explore aspects of the game’s world beyond the central narrative. They also offer additional challenges and opportunities to earn in-game rewards, enhancing the overall gameplay experience. Moreover, these mini-games often reflect the creativity and innovation of the developers, intricately designed to align with the theme and atmosphere of the game. In Final Fantasy VIII, for instance, the card game Triple Triad became so popular that it spawned real-world merchandise.
The series also features slot machines, adding to the casino-like atmosphere. For example, as far back as 1994’s Final Fantasy VI, one of the playable characters named Setzer had slots as his main command. FF7 Crisis Core also made use of a slot system in combat, and more recently, FFX’s Wakka had a reel system to power up his abilities.
This element helps complement the diverse range of mini-games and immerses players in an environment filled with the charm of luck and chance. Engaging in these activities within Final Fantasy can evoke a sense of spinning a wheel or playing slots online, where each decision feels like a spin of fate, adding an extra layer of excitement and unpredictability to the adventure. The thrill of potentially winning big or facing an unexpected outcome mirrors the ups and downs of real-life gambling, making each session within the game a unique and captivating experience.
Square Enix has also been influential in integrating its franchises into popular culture. The company’s strategic collaborations and marketing efforts have brought its iconic characters and narratives beyond the gaming world into films, merchandise, and even theme park attractions. For instance, the adaptation of Final Fantasy into movies and the presence of its characters in crossover titles and media have solidified its status as a cultural icon. This strategy of extending its brands into various entertainment realms showcases Square Enix’s understanding of the changing dynamics of consumer engagement. By creating a multifaceted presence for its franchises, Square Enix sustains interest in its games and taps into new audiences, further bolstering its impact in the entertainment industry.
The enduring popularity of the Final Fantasy series can be attributed to its ability to evolve and adapt. Each installment brings new worlds, characters, and mechanics, keeping the franchise fresh and relevant. In fact, Square Enix’s response to the challenges mentioned earlier is evident in its recent leadership change. The new CEO, Takashi Kiryu, aims to revamp the company’s strategy by narrowing the focus to fewer, larger-budget games with the potential for a more substantial impact on the company’s financial health. However, such transformations require time, indicating a period of transition for the gaming giant.
To conclude, in my humble opinion as a gamer, not a financial analyst, with the release of the huge Final Fantasy 7 Rebirth in February 2024, Square Enix will have a great year, maybe one of its best ever.