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Square Enix partners with Animoca Brands to go all in on Web3

Square Enix is serious about the blockchain

Well its finally happened. One of the biggest gaming titans from Web2, Square Enix has partnered with one of the biggest driving forces in Web3 gaming, Animoca Brands.

Japanese game studio Square Enix has announced plans on changing its business strategy to further include blockchain technology and NFTs in its games and invest in its own blockchain game infrastructure. This announcement comes after their report of Q1 earnings and that their investment into NFTs will be part of the medium-term business strategy for 2022.

Square Enix President Yosuke Matsuda has already advised twice in the past they are moving towards integrating blockchain technology. This is, however, the first time Square Enix made an announcement of more concrete plans with regard to NFTs.

Square Enix, as many would know, is one of the largest game studios and publishers in the world and is particularly well known for the Final Fantasy, Kingdom Hearts, and Dragon Quest franchises which are loved both in and out of Japan. They have recently sold some of their game studios along with the Tomb Raider franchise for $300 million which the company has advised would be invested in blockchain, cloud, and AI.

Part of Square Enix’s plans includes a partnership with Animoca Brands, the studio that handles The Sandbox. It is also one of the largest blockchain gaming companies and blockchain investment firms in the world. Square Enix has gone into this partnership to explore its options in the metaverse and in the blockchain gaming space which is starting to become crowded with new developers jumping into the scene as of late. 

Part of the plans that Square Enix is also looking at is establishing its own gaming token and its own ecosystem and economy. It’s looking to establish an entity that will manage, issue and invest in its own tokens. The studio is also considering founding its own venture capital firm that will align with its goals of investment in cryptocurrency and blockchain technology. 

Animoca Brands chairman Yat Siu shared to Cointelegraph, how influential Square Enix has been in the gaming industry and believes that it can use its influence for blockchain gaming to get a foothold in the mainstream gaming community. According to Siu, “Square Enix has already been talking about the potential of blockchain games for a long time, so it gets it better than most of the traditional gaming giants out there.”

Interest in blockchain gaming has increased over the past few months with 2021 NFT reports showing that blockchain games take up around one-third of the NFT space in terms of transactions. However, mainstream acceptance is still quite low. Despite other big game studies such as Sega and Ubisoft expressing their interest in blockchain, they have received lots of backlash and negative criticism for even entertaining the idea.