Square Enix to 'Aggressively Pursue a Multiplatform Strategy' for AAA Titles - News
by William D'Angelo , posted on 02 July 2024 / 2,349 Views
Square Enix in its latest earnings report announced it will be putting less focus on releasing exclusive titles and shift its strategy to release more multiplatform titles for Nintendo consoles, PlayStation, Xbox, and PC.
"For HD titles, [Square Enix] will aggressively pursue a multiplatform strategy that includes Nintendo platforms, PlayStation, Xbox, and PCs," reads the earnings report. "Especially, in regards to major franchises and AAA titles including catalog titles, it will build an environment where more customers can enjoy our titles.
"In addition, it will also devise a platform strategy for SD titles that includes not only iOS and Android, but also the possibility of PC launches.
"Furthermore, the Group will strive to maximize the acquisition of new users when launching a title and that of recurring users after starting management of game operation."
The recent Final Fantasy releases - Final Fantasy VII Remake, Final Fantasy VII Rebirth, and Final Fantasy XVI - released as PlayStation exclusives, while Final Fantasy VII Remake would get ported to PC a year and a half after the PlayStation release.
This new strategy suggests that some AAA catalog titles and future AAA titles from Square Enix could see a release on Xbox and Nintendo consoles in the near future.
Square Enix also stated it "will pursue a shift from quantity to quality as its medium- to long-term philosophy regarding the DE segment’s portfolio.
"To that end, it will first work to establish the optimal portfolio, striking a balance between a 'product-out' approach that reflects the imaginations of its employees to the utmost, and a 'market-in' approach that leverages customers’ voices and data to inform development efforts. It will strive for a regular launch cadence, focusing its development efforts and investments on titles with substantial potential to be loved by customers for years."
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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Great to hear!
Makes sense for them. Even if Xbox won't sales be massive for their games, the PC market is nothing to sneeze at and if the next Switch is powerful enough there could be a ton of potential there as well.
yah I think Switch and PC are where they are missing the big bucks. Xbox can bring some money too but the exclusive deals probably already offset that. But there is simply no way, Sony can put enough money to cover what they are missing on Switch/PC...
Xbox numbers are non existent,
Releasing both on ps5 and pc is a great idea,
Of course when you don't release on PS4 you lose sales numbers.
Was Harvestella AAA? Good game sent to die on the switch.
Ffxvi has low sales numbers becoz it's only on one console,
Xbox numbers wouldn't help it,
Rebirth on the other hand compared to the first one where ps4 numbers were 100+ mil compared to ps5's 50 mil of course rebirth would be trailing behind remake..
It really is just simple math.
Square should just polish their games and make it truly outstanding so that they could grab more sales numbers and get what they're looking for
Although the XBox console is not very relevant compared to the Playstation or Switch, it is still worth putting the game on as many platforms as possible. This helps the company's image, as it demonstrates that it is not excluding anyone. If you could include FF on mobile devices, that would be really interesting! Wouldn't it be an opportunity to explore the cloud gaming market? Buy the game at any store and play through GeForce Now and other cloud gaming services... it looks like XCloud will also make it possible to play games purchased from the XBox store, so it would be great for Square and other studios to explore this technology.
What needs to stop is the sharing of accounts and the sale of used physical media, as this does not generate revenue for the company, in other words, this damage is equivalent to piracy.
This all looks extremely positive.
Simply releasing Chrono Trigger sequels would have saved Square long ago. going mulitplatorm should help, although the initial money that Sony pays Square Enix will go away, so Square will incur more costs creating the games which will result in bigger losses if they don't sell well. The Switch 2 should be a huge source of income as most Japanese gamers own a Switch and love their handhelds. Having games day one on Steam should help with the steamdeck.
Possibly Switch2 will be target console going forward with the others getting upres versions. That would make sense in my book.
Absolutely the right call to make. AAA dev expenses are only going up - it just doesn't make a lot of sense for a third-party publisher like Square-Enix to only release titles on one platform. All of the current FF titles should have been released on PC/PS5/Xbox Series simultaneously. Adding in the PC platform would definitely boost sales; though Xbox's userbase (especially in Asia territories) isn't huge, its architecture is very similar to PS5 and its development API is the same as PC anyway, so adding the platform doesn't add in much expenses.
Just wanted to add that having FF (or others) on Switch would be massive as well, the problem is that Switch is just completely different hardware-wise from PS5/Xbox Series that it would require a huge amount of extra work. Or hiring out to a dedicated port team. Hopefully the increase in power for Switch 2 will make multiplatform games more feasible for a lot of publishers.
If a game costs the studio US$200 million and its sales are US$70, then the studio would need to sell 2,857,143 units in the first month to pay all costs and expenses. Note that the company does not make a profit if sales are below this, but employee salaries, taxes, operating and maintenance costs, depreciation expenses, insurance expenses, in short, there are expenses every month, so every month it is necessary to sell "x" units to cover all expenses , this in a scenario that sold 2,857,143 units in the first month.
Publishers do not take the full $70. Sony charges a 30% commission. If the game is sold in physical format on top of that, there is also a commission from the retailer. In the end they will get $40-$45 for each copy.
And truth. This shows that exclusivity is even worse for the third party studio.
$70 * 70% = $49
200,000,000 / 49 = 4,081,633 units
This is for the first month, as the next month will involve more expenses such as electricity, water, labor, taxes...
After 4,081,633 units for the first month, a minimum quantity needs to be sold to cover expenses, so you can imagine the challenges.
For third parties, game exclusivity doesn't work like it did in the past. There is no way to accurately estimate how many potential customers the studio will lose with exclusivity, and I believe that even if sales on a platform only cover the costs of porting it, it is still a gain for the studio, as little by little the studio's image improves. with customers who have been excluded in the past.
Exclusivity may still work for Nintendo, for Sony, but I think that for the XBox it's not worth keeping more than 4 to 5 exclusive franchises. If I were Phil, I would create some more game pass plans, for example:
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Game Pass Console: complete library with first part day one + online games + third party partnership
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PC Game Pass or Console Game Pass Plus: complete library with first part day one games + online (console) + third party partnership + Bethesda games + EA Play
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Ultimate: complete library with first part day one games (console, PC and cloud) + online (console) + third party partnership + Bethesda games + EA Play + XCloud
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Ultimate Plus: complete library with first part day one games (console, PC and cloud) + online (console) + third party partnership + Bethesda games + EA Play + XCloud + Activision games
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Cloud game pass: users who only want to play games purchased from the XBox store, or games available on game pass on mobile devices, low-end PC, TV and other hardware
I believe that when creating big budget games with 8 to 10 hour game play and then releasing some DLCs that are not available on the game pass, this is a model that would work for the XBox, as the main game would be on the game pass and the DLCs would have to be purchased, but at a lower price. DLC with 4 to 6 hours of game play would be an interesting model to reduce production time and generate faster revenue, as well as the sum of the game plus the DLCs could produce a final game with game play of 20 to 40 hours.
I'm personally just tired of SE making sequels of a sequel ie:FFX, FFx-2, FFXX-3, etc. I also did not like how they went about milking FFVII. I'm okto some extent with remakes and FFVII looks good but not enough to draw me in c of the part series which is just hard core milking. Like some said here, make sequels of good old classics like T. Heck, make a remake but make it one game, not 3. And I applaud the multuplatform approach. It's stupid to be exclusive.
Don't forget about Nier SE.
Most of their big PS5 exclusives failed hard on PS5, though I don't see releasing them on Xbox with it's relatively small userbase with a lot of gamepasss subscriptions will do much. Releasing titles day one on pc and the Switch successor (if powerful enough) might boost sales quite a bit though.
What big exclusives have failed hard other than Forspoken? XVI met the expectation and Rebirth is probably below expectation but nowhere near beaing a "hard failure".
Going muti-platform day one is definitely the right move for SE going forward, especially if they kept the quality level of recent releases.
I would argue Valkery, Rebirth and Forspoken all failed. That's three PS5 exclusives. There are reports that Rebirth sold less than half of remake in the same timeframe. Selling 25% less is underperforming selling half is in my opinion a hard failure.
https://www.forbes.com/sites/paultassi/2024/04/13/analyst-ps5s-final-fantasy-7-rebirth-is-selling-half-of-what-remake-did/
Also selling less than 5 million for a mainline FF title isn't setting the world on fire for XVI either. It had a good launch but it didn't have any legs, much like Rebirth.
They definitely did not sell like crazy but failing is a big word here :)
But I get your point and yes, the "exclusive" strategy def. did not work out so well for them.
For Rebirth, I still do not understand why the title did not perform so well (while not being bad). I mean, the first game was amazing and Rebirth is pretty good too, it looks like people who played the first one did not care about the second one? Or was it because a lot got it on Play Station Four?
Anyway, for an external publisher; it is def. not the best to have most of their AAA exclusives.
Might be many factors. The economy being a mess, some people not liking Remake that much compared to the OG, many not having a PS5 yet and so on. I believe Rebirth has legs though, once it goes to PC and more people get a PS5 and whatnot. Some may even be holding out until they get the whole game as three in one combo pack. Something like 300-400 hours of game to go through, lol.
I don't know if they failed hard, Square Enix has always had way bigger expectations for their games than they should. When Tomb Raider sold 3.4 million copies in a month in 2013 Square Enix was disappointed with the sales.
Those Tomb raider games were extremely expensive to make and weren't as successful as people think
