Square Enix plots development model overhaul

Square Enix plots development model overhaul
Craig Chapple

By Craig Chapple

May 28th 2013 at 11:05AM

Matsuda looks to Kickstarter and Steam Early Access as examples of increasing user engagement

New Square Enix president Yosuke Matsuda is plotting an overhaul of the publisher's business model for triple-A development.

Speaking during a financial results briefing, Matsuda said game development was taking an increasingly longer time to complete, resulting in a deterioration of the number of game releases and an increase of the period between investment and sales.

He said that to help turn around the company’s fortunes, the publisher would need to consider methods to improve asset turnover, and change the way a product is presented to customers during this development period.

“There is a huge difference from the perspective of business risk between a model where no revenue opportunities take place for several years until the product is completed (upon which investments are recovered at one time), and a model where revenue opportunities exist in some form prior to product completion, even if the amount of money invested is the same. I believe this is a crucial point,” he said.

He went on to say that, far from being just a financial issue, developers and publishers needed to create a closer connection with consumers in order to help prevent situations where players are left to wait years for a new release, with nothing in-between, a business model he described as “dishonest”.

Matsuda argued that consumers needed to understand games under development and bring them in on the process to help ensure titles would meet their expectations. He highlighted the examples of Kickstarter and Steam Early Access as potential ways to achieve this.

Although Kickstarter primarily servers as a source crowdfunding, developers are often able to create a close connection with their backers by providing constant updates, take consumer feedback and respond directly to donators.

Valve’s Early Access and Greenlight initiatives meanwhile also offer an outlet for developers to obtain customer feedback during the development process.

“There is a crowdfunding website called 'Kickstarter,' which does not only serve as a method of financing for developers, but I believe should also be seen as a way to unite marketing and development together by allowing us to interact with customers while a game is in development,” said Matsuda.

“Valve's Steam Greenlight and Early Access, are also very interesting, in that they raise the frequency by which we interact with customers, increasing their engagement and reflecting customer needs. We are also looking at what initiatives are possible from this perspective.

"What should we present to our customers before a game is finished, how can our customers enjoy this, and how do we connect this to profitability, is something we are thinking about implementing, and which can improve our asset turnover in the process.

“This is what I would like to realise with respect to long‐term, large‐scale developments. It is not an easy task, but I believe that it has become quite possible under the current environment.”