Square Enix reveal plans to "reform" its HD game business

Square Enix has revealed the basic outline of their plans to "reform" their HD games production business - an area of the company that has undoubtedly stalled in the current generation of consoles and played a vital role in the company's recent shortcomings.

Senior Executive Managing Director Yosuke Matsuda revealed the intended changes as part of a results briefing outlining what went wrong in the last fiscal year and what the company intends to do about it. The briefing highlights three key areas where changes will be made. We're going to outline them for you, and what they mean. 

Re-consider long-term, large-scale development
"Long term, large-scale development makes asset turnover very slow," the briefing reads, recalling the long development times of titles such as Final Fantasy XIII, Final Fantasy XIV and notably the ongoing seven-year development of Final Fantasy Versus XIII, widely speculated to potentially become Final Fantasy XV. 

"The period of investment to sales is too long," the briefing states. "We must consider how to increase turnover."

The briefing goes on to explore a variety of ideas to improve the long-term development model. The company points to the success of both Kickstarter and Steam Greenlight - in turn suggesting the idea of allowing customers to see development more clearly and communicate with the development team behind games during development. 

Square Enix acknowledges that long development times with no news can often work against the games. "One could go so far as to say that in today's times, making customers wait for years with little to no information is being dishonest with them," it reads. "We're no longer in an age where customers are left in the dark until a product is completed."

Alongside the Kickstarter and Greenlight inspiration sits another idea - monetization of a game pre-release - finding ways to allow customers to pay earlier on to recoup development costs ahead of launch. 

Finally, the company also talks of releasing sequels more quickly in the future. As proved with Final Fantasy XIII, assets are expensive to create and even more expensive if thrown away after a single game. By releasing multiple sequels during a console generation, the company can make the most of assets generated for the original game. Releasing sequels more frequently also aims to hold the attention of customers, keeping them attached to a brand.

Smart devices as game machines
The second of Square Enix's reform plans outline how the company intends to respond to continued impressive growth of smart devices as a part of the gaming market, and how to leverage growth there for better results for the company.

"We simply cannot ignore smart phones and tablets," the statement says.

As outlined in another news story, Square Enix intend to aim to publish more full-console style experiences on smart phones, tablets and other mobile devices that were previously the home of only smaller-scale developments.

"On the basis of progress of recent devices, we are thinking to push into publishing games on smart phones and tablets, which we had hithero only published on game consoles," the statement continues.  "In particular, our strong-point of single-player, story-driven games."

The briefing also talks of finding new revenue streams for these games - they will not just be pay-to-download, but a mix of that as well as free-to-play, paid DLC and hybrid-based systems in order to find methods to expand.

Regionality
The final and perhaps most important pillar of Square Enix's planned changes relates to how international the company became over the course of the previous decade - and where that introduced points of strain or failure.

"While we had been making investmentsin the game development under the assumption that major titles would sell a lot worldwide, however, we have found it extremely difficult to achieve," the briefing admits. 

"We had not given much consideration of the regionality of each market, and had focused more on how to sell the major titles globally; however, titles fitting this method are limited."

"Many of the titles that we decided to cancel or reexamine in the fiscal year ended March 2013 had been based in that way of thinking."

The statement goes on to explain that the company will continue to produce large-scale, expensive 'AAA' releases, but will evaluate what games deserve this treatment more carefully than in the past. It admits that the company "cannot reasonably" finance a large-scale approach for every title as it attempted to when it tried to build 10 AAA properties in recent years, and will scale back considerably.

Instead, Square Enix will reposition itself to develop AAA titles that are more targeted and suited to each of the regions the company has a major presence in - they will no longer attempt to release games that please everyone in the market and have absurdly high sales expectations as a result.

The briefing states that we'll hear more on the number of AAA titles the company intends to put out as part of their E3 efforts.

We'd guess that this means you can expect one major tentpole series from the East and West of the company (for instance Final Fantasy and Tomb Raider) with a high budget while other releases will scale from slightly smaller to more modest (Dragon Quest and Deus Ex through to smaller mobile titles) - but that's just our speculation.

Square Enix end this section of the briefing by underlining that development of titles following these tenants has "only just" started - but reminds that the company is determined to "solidly implement" these ideas.