Square Enix seems ready to revamp its development portfolio. The company's president hints at a potential decrease in the number of titles, but a promise of a more diverse range of genres. This marks a shift for a developer and publisher renowned for its extensive RPG franchises.

In a recent investor Q&A, Square Enix President Takashi Kiryu addressed various inquiries about the company's future portfolio. When asked about areas that need improvement for sustained growth and achieving business goals, Kiryu highlighted two factors: the limited diversity of the company's portfolio and a deficiency in robust marketing. Regarding the limited diversity, he emphasized the necessity to broaden Square Enix's game offerings by enhancing internal development capabilities or potentially making acquisitions.

"We have leaned heavily on specific gameplay styles or genres due to the strength of our IPs like Dragon Quest and Final Fantasy," Kiryu noted. "However, the gaming market has seen a diversification in customer preferences, with people enjoying content from various genres. Additionally, blockbuster titles aren't the only ones gaining popularity. Take Powerwash Simulator, for instance; it stands out in our portfolio as a game designed for casual play, yet we've consistently generated revenue from it."

In a later part of the Q&A, Kiryu was questioned once more about the company's development initiatives. He reiterated the desire to enhance Square Enix's internal capabilities and expressed the intention to "embrace new challenges." This approach aims to contribute to the diversity of the title portfolio, as mentioned earlier, and also provide developers with opportunities to broaden their skill sets.

Simultaneously, Square Enix is cognizant of its identity as the RPG-focused company. In another part of the Q&A, Kiryu acknowledged that the "numerous entries in our lineup" were posing challenges in maintaining strict control over development efforts. He expressed the desire to reorganize the development function, aiming to guarantee higher quality from each title by streamlining the lineup.

In a follow-up response, Kiryu stated:

"As customer needs and available device types have diversified, our strategy has been to create successful titles across a broad spectrum rather than focusing solely on specific ones. However, this approach has led to a dispersion of our resources. Meanwhile, recent major releases in the gaming market have shown clear winners and losers, and even indie titles can now make a significant impact. The market is increasingly divided between blockbuster and indie titles, and I acknowledge that we have developed many titles that fall somewhere in the middle. Moving forward, I aim to establish clearer distinctions."

The gaming market is becoming more divided between blockbuster and indie titles. However, I acknowledge that we have created numerous titles that fall somewhere in between these extremes.

The Square Enix President seems to suggest that the company may have leaned too heavily on creating numerous mid-budget RPGs that didn't achieve massive success, as seen in recent titles like Harvestella, Various Daylife, or Valkyrie Elysium. While big AAA titles like Final Fantasy and Dragon Quest are expected to remain successful, Kiryu emphasizes the importance of directing development efforts internally towards games like Powerwash Simulator (developed by Futurlab). This approach aims to capitalize on title diversity rather than adhering to the same formula across multiple AA releases.

Certainly, that's a valid point. The definitive plans of Square Enix for 2024 and beyond remain uncertain, and we'll have to wait for more information. Notable upcoming releases include Foamstars from Toylogic, Visions of Mana, a Dragon Quest 3 remake, the anticipated Dragon Quest 12, and potentially Kingdom Hearts 4. Kiryu's mention of using AI for content creation, as stated in a New Year's Letter, highlights the company's interest in exploring innovative approaches. Additionally, Square Enix continues to show interest in blockchain technology, a stance that contrasts with the trend of some other companies moving away from it.