The Square Enix CEO on what the future holds for video games
Square Enix CEO Yoichi Wada has overseen the business responsible for the likes of Final Fantasy and Dragon Quest since the start of the decade.
He’s overseen three key mergers that have grown his firm considerably, with Square growing to include the publishers Enix, Taito and Eidos.
And now, with the advent of social games, the rise of MMOs and introduction of new cloud-based gaming services, Wada’s focus is on global expansion and online gaming.
You've guided the company through some big changes - first the merger with Enix and the buyout of Taito, and then establishing strong teams in the West coupled with the acquisition of Eidos. What's been your biggest motivation factor in that expansion - is it just traditional company growth or the desire to become more relevant globally?
There needs to be a lot of different races and cultures in our business, too, to make sure we appeal to people's lifestyles. And we have to cater to the numerous consoles and platforms – that's how we are addressing the different global regions. We have to take in a lot of genres - that explains the regional spread.
Prior to buying Eidos you talked a lot about working with Western developers. Is that something you're still keen on or are you happy with the global mix of studios you have now?
I'm still open to it. There are going to be different types of collaborations with different types of talent in our business' future.
Are there any genres that Square Enix still isn't active in that you'd like to enter?
Social and browser games, which is now a very big genre, is something we have started development into.
Depending on who we talk to the issues around social/browser games is risky. In fact the term itself is one to use carefully. But it is a an important area to address because it isn't related to any consoles and doesn't need specific hardware to run it, just applications on the client side.
I believe that these types of games are going to be spreading and growing dramatically - especially in areas like Asia which does not have much penetration of consoles. The penetration power and destruction capability [of social games] mean it's an area we must tap into.
Do you think that social games area could overtake the traditional console game market?
It's tough to say at this moment. But let's say in ten years time what we traditionally call 'console games' simply won't exist. The exact timing at which it will go away is hard to determine, but somewhere around 2005 the console manufacturers' strategy shifted. In the past the platform was hardware, but that switched to the network. So a time will come when the hardware isn't even needed any more. Because the true strength of the Xbox 360 is Xbox Live.
Doesn't the notion of console hardware 'disappearing' create a problem for format-holders and many companies in games like Square Enix?
First of all the distributors and sales firms will see a big negative impact. But as I say the format holders knew that this shift was coming.
For Microsoft they have always had a consistent strategy – they recently strengthened Xbox Live and Games For Windows to be more consistent and consolidated. Live is also provided in a service in Windows, so they are aligning closely in that strategy - the two are very similar.
So that instead of relying on the hardware layer the network becomes the operating system. That move away from clients to the network is something Microsoft has done – moving from clients to the server is something Sony has done. If we take a look at the PS3 we can see that it is like a home server in a sense - the Cell chip is well matched to the parallel processing we use on server-based games.
That is an over-simplified explanation, but philosophically that's how we distinguish what is going on in those companies.
You have a lot of praise for Xbox Live. Do you feel you have taken advantage of the service so far?
There are a lot of things we still need to do - a lot.
Will looking at social and browser games help you achieve your target of appealing to the lifestyles of consumers rather than their cultures? There's a lot of talk about how these games cut through to engage not just casual gamers but also engage MMO players – people play then during lunch break at work, and you can engage them 24 hours a day.
Exactly. For example on Xbox games – I play games myself but even as the president of a games company I can't play games all day in my office. But if it's a browser game, I might be able to 'glance' at browser games while writing my email. I could afford to take a peek at it while playing properly at home.
And with regards the hardware performance, we appreciate that these games need a benchmark for hardware to run a game. So whether it is on a PC someone is using in Starbucks or a business PC or a home computer, the hardware itself is going to need compatibility. But after that all the player then needs to do is download the client – browser games mean all the data can be kept in the server. With that, any kind of terminal becomes a potential platform in which games can be played. That's exponential growth in the potential growth of gaming. The potential size of the market is enormous.
Where are those browser games you mention being made?
Japan. I would like to have Eidos make some as well - but we are only just now thinking about that.
Is that because the Japanese market is where the biggest social games opportunity is for Square Enix at the moment? It's already a well established field in the West.
Actually I believe the opportunity is everywhere. The social games market is extremely local however – a Japanese studio cannot design for a Canadian audience, for instance. So if there is someone that has the capability or is willing to think about it I want to tap into that talent, wherever they are.