Square Enix output strategy | Discussion thread.

What platforms do you believe Dragon Quest XII will release on?

  • Nintendo platform (Switch and/or Switch successor)

    Votes: 58 89.2%
  • PlayStation 5

    Votes: 38 58.5%
  • PlayStation 4

    Votes: 28 43.1%
  • PC

    Votes: 36 55.4%
  • Xbox (One and/or Series)

    Votes: 25 38.5%

  • Total voters
    65
  • Poll closed .
DQXI, Arise, XVI, and Rebirth have pretty similar zone based level designs. I don’t know how you could look at any of these games and think one is closer to Elder Scrolls than the others.

These are heavily character based games with a linear structure and focusing on very different things than what you see from Elder Scrolls.
 
Look at the core game dynamics. Final Fantasy usually features a party, a linear story structure where you together face off vs an evil god at the end, where you as a player don't have a say in how the story moves in any major way. The core structure is classical JRPG like Xenoblade, DQ, Tales. The only difference is battle systems and FF having a higher budget. It has nothing in common with western RPGs like Skyrim on the other hand.
The aesthetic is entirely different and honestly, this definition is so broad you could argue something like TOTK is a classical JRPG under it. If having a linear narrative is literally the only think likening FF to DQ these days that's still not a logical grouping. Especially as a commercial rational for FF's decline when many other JRPG series are largely selling better than ever globally (Xeno, Persona, Souls, Tales, FE, SMT, Pokémon, MH, Ys, Atelier, RGG, etc) and even some of those from SE too (DQ, NieR, KH, Asano).
 
KH is going to Steam under a different SKU/version right?

Maybe the contract with Epic was actually "permanent" and Square needed to do this in order to be able to release it on Steam. I remember some other games were stated to be permanent exclusives but eventually released on Steam under other versions.

As far as the next FF is concerned, I wonder if Square will try to appeal to the Genshin fanbase, releasing party-based RPG more anime-like.
Maybe Square needs to start iterating more and not trying to make each FF unique.
 
KH is going to Steam under a different SKU/version right?

Maybe the contract with Epic was actually "permanent" and Square needed to do this in order to be able to release it on Steam. I remember some other games were stated to be permanent exclusives but eventually released on Steam under other versions.
there doesn't seem to be anything to point towards one explanation or another.
 
Western gamers prefer RPGs like Elden Ring and Skyrim over Final Fantasy, Dragon Quest, Tales of style JRPGs. And the Japanese market for JRPGs is not as big as before either. That is all there is to it.
Persona, Dragon Quest and Tales of is bigger that ever, and you cant look in Zelda BOTW and TOTK and think that its not a JRPG aesthetic with anime characters, maneirisms and all that, and that thing sold 30 millions.

I dont know why you guys trying to Create a narrative that Young people doesnt like JRPGS when we have these series exploding in sales.

Even Genshin, that thing have millions of players in console.
 
It’s hard to make the argument that FF should be more like DQ or Persona when they put out 1 mainline game per generation. They’re objectively worse managed than FF who’s disappointing sales have a pretty obvious issue with their platform strategy, which SE has already publicly acknowledged.
 
It's not Fortnite and whatever new F2P game that is killing Final Fantasy. It's Square Enix being top to bottom poorly run for well over a decade with no consistent vision, or audience for that matter. Following any Square Enix franchise is a nightmare, any single game release is a magic 8 ball of platform availability. Final Fantasy no longer has an identity of its own and nothing to get someone from one title to the next. At this point Final Fantasy is about some crystals, summons and chocobos, and that's about it, Final Fantasy 17 has as much chance of grabbing me, a longtime fan, as any other new random IP that might pop up in the next couple of years.

About the anime thing, the only problem could be not being anime enough, nowadays anime is popular. period. Mainstream even.
 
It's not Fortnite and whatever new F2P game that is killing Final Fantasy. It's Square Enix being top to bottom poorly run for well over a decade with no consistent vision, or audience for that matter. Following any Square Enix franchise is a nightmare, any single game release is a magic 8 ball of platform availability. Final Fantasy no longer has an identity of its own and nothing to get someone from one title to the next. At this point Final Fantasy is about some crystals, summons and chocobos, and that's about it, Final Fantasy 17 has as much chance of grabbing me, a longtime fan, as any other new random IP that might pop up in the next couple of years.

About the anime thing, the only problem could be not being anime enough, nowadays anime is popular. period. Mainstream even.
The weird half-anime half-realistic aesthetic quite a few final fantasies have going on worked in the early 2000s, but honestly it's just not a selling point in comparison to just straight up anime at this point. Choose a lane and stick to it, I would say.
 
KH is going to Steam under a different SKU/version right?

Maybe the contract with Epic was actually "permanent" and Square needed to do this in order to be able to release it on Steam. I remember some other games were stated to be permanent exclusives but eventually released on Steam under other versions.

More likely an issue with the talent agencies on the Japanese voices (notably Johnny's, who not only is notorious to work/clear contracts, has also been restructuring and been subject to heavy allegations as of late), rather than a contract with Epic.
 
If kids can be convinced to play pokemon, they can be convinced to play other RPGs

Pokemon's as big as it's ever been, and many series are posting their best numbers ever (Persona, Nier, Mario RPG, Kingdom Hearts I think, Dragon Quest, Fire Emblem [Three Houses, not Engage], Monster Hunter if you wanna count that one because it's kind of an armor-based RPG). There hasn't been meaningful erosion in the RPG space. There's ben meaningful erosion in Square's cultural cache

God willing they can pull it together for DQ12
 
That's not a good tweet at all, lol.

Sorry, but crying 'evil f2p games!!1' is just giving up. Truly great games will sell, if your AAA game didn't sell, then that's probably because your game wasn't exciting enough.

I don't get how people are downplaying the content of that thread. A lot of that thread is true. The rise of live games that expand and consistently introduce new content is something that wasn't common 10 years ago. The amount of audience capture singular games have these days is way higher than back in the day. That's something that publishers have to accept and address in the market given that games are much more expensive to make.

No where did he say FTP games are evil but it is true that a smaller pool of games eat up the average playtime available for games. Lots of excellent games don't find commercial success. The market is fierce. Perhaps your game was not "exciting" enough but margin for error is a lot lower these days and that drives costs.

Obviously traditional model games still sell really well but the room for error is lower and that's something publishers have to acknowledge. Consolidation around fewer brands and bigger brands is a thing. Obviously SE has lots of other issues but I don't think this is just them. The math for AAA games is changing.
 
Western gamers prefer RPGs like Elden Ring and Skyrim over Final Fantasy, Dragon Quest, Tales of style JRPGs. And the Japanese market for JRPGs is not as big as before either. That is all there is to it.

I just want to point out to you that the Souls games and really From Software's sales explosion didn't come out of thin air. Demon Souls didn't sell that well and while Dark Souls did better it wasn't crazy. And stuff like Sekiro and Bloodborne while they did well and eventually chugged to very good totals, were not super crazy sales juggernaughts like Eldin Ring was outta the gate. Western gamers may prefer RPGs like Elden Ring or Skyrim over your stamdard JRPG at the highest level but those games are from series and developers that had to work their way up to these insane sales and the games also were generational experiences when they came out (look at the metacritic of Eldin Ring or the original Skyrim, they both have 96s).

You're acting like every game that looks like Eldin Ring and Skyrim does well. That shit is very much not true and it is not like the developers of those 2 games have been consistently cranking out games that sell 25+ million copies.

Most WRPGs are not those games. Most of them do not sell much better than how FF was selling before 16 and 7:Rebirth.
 
I just want to point out to you that the Souls games and really From Software's sales explosion didn't come out of thin air. Demon Souls didn't sell that well and while Dark Souls did better it wasn't crazy. And stuff like Sekiro and Bloodborne while they did well and eventually chugged to very good totals, were not super crazy sales juggernaughts like Eldin Ring was outta the gate. Western gamers may prefer RPGs like Elden Ring or Skyrim over your stamdard JRPG at the highest level but those games are from series and developers that had to work their way up to these insane sales and the games also were generational experiences when they came out (look at the metacritic of Eldin Ring or the original Skyrim, they both have 96s).

You're acting like every game that looks like Eldin Ring and Skyrim does well. That shit is very much not true and it is not like the developers of those 2 games have been consistently cranking out games that sell 25+ million copies.

Most WRPGs are not those games. Most of them do not sell much better than how FF was selling before 16 and 7:Rebirth.
And if you really want to go there, FromSoftware has been making dark fantasy RPGs with slow paced combat since 1994.
 
Lots of excellent games don't find commercial success.
That's where I disagree. Yes, the market is fierce, but maybe these games also aren't as excellent as you think they are.

The past couple years has fostered an environment in certain online communities where criticizing games has almost been turned into a kind of taboo. "Don't be mean to game X, it's hurtful to the developer!", that sort of thinking. The consequence is that games keep getting praised above their actual achievements, and those who do are called haters or met with variants of 'but corona!!1'. There's a reason why many feel disappointed by the "PS5-generation", not because the games are necessarily bad, but because they're still on the gameplay/ambition level of previous gen-games, outside of framerate and resolution. And that's catching up to big publishers now who depend on high sales for their AAA-budget productions.

In other words, which SE-jrpg should the greater masses have been excited for beyond the FF-core fanbase? When I look at their output, it's no wonder to me why f2p-games win over many gamers. SE, but other publishers too, are making 'maintenance games' and that has worked for a long time, but apparently that time is over now. I mean, you see it with Capcom and RE, too. To boost sales, Capcom heavily relies on cheap gimmicks like Lady Diminestru. Maybe the open wold-RE9 will be the truly exciting game that attracts the masses with the quality if the game itself. Halo is in a deep crisis because Microsoft cannot figure out how to bring good change to the franchise. And Nintendo keeps Metroid around for prestige, but can't figure out how to hoist the franchise past 3 mio. It's not just SE. But to blame the different market and f2p is such a copout imo. Make more exciting games and people will flock to them. Some movie critics explained Netflix productions that are generally made to be 'just alright', neither great nor bad, to keep the new audience of streaming content captivated. Whether that's working for tv shows is questionable, but I'm sure it's definitely not working for video games. When a game excites, people will come. Despite f2p existing.
 
so we need a new Final Fantasy anime, a Final Fantasy monster raiser (how has there not been one?), a new World of Final Fantasy, and toys

actually realistic
Pokemon has an anime for generations with iconic characters and pokemon roster. Did Ash win anything in the end? I have no idea but the pokemon is an iconic IP within iconic universe. With FF you have different universes every couple of games.

You also need to release the games on a consistent basis to the audience that actually buy it....Pokemon has been a seller for generations, despite being only on Nintendo. But that's a separate matter.
 
Pokemon has an anime for generations with iconic characters and pokemon roster. Did Ash win anything in the end? I have no idea but the pokemon is an iconic IP within iconic universe. With FF you have different universes every couple of games.

You also need to release the games on a consistent basis to the audience that actually buy it....Pokemon has been a seller for generations, despite being only on Nintendo. But that's a separate matter.
Ash won the Pokemon League in Alola and then he won the anime's quaivalent to the Pokemon World Tournament, I think. When those two things happened, it was pretty big news. Saw some mainstream outliets talk about it.

Pokemon's a massive marketing and merchandising machine. The games feed into that, and naturally said games have to come out consistently to keep the machine going and generate synergy everywhere. It'll be extremely hard for FF to do that.
 
Ash won the Pokemon League in Alola and then he won the anime's quaivalent to the Pokemon World Tournament, I think. When those two things happened, it was pretty big news. Saw some mainstream outliets talk about it.
I remember than funny comment under some youtube video that "I wanna be the very best...But I will take the second place".

Pokemon's a massive marketing and merchandising machine. The games feed into that, and naturally said games have to come out consistently to keep the machine going and generate synergy everywhere. It'll be extremely hard for FF to do that.
In theory FF7 had that potential at one point - if SE doubled down on FF7 IP in the past (like they had anime or movie at one point) it could have become a much bigger thing. But it self FF7 is kinda its own IP, separate from FF. But oh well.
 
That's where I disagree. Yes, the market is fierce, but maybe these games also aren't as excellent as you think they are.

I wasn't even talking about SE titles specifically. Just that lots of good/great/amazing products don't find commercial success. Which has been true in games (and really in entertainment as a whole) forever. Unless you think any game that doesn't sell well isn't well made which we can just stop now then. Because what what metrics are you using to say that these games are not excellent?

The past couple years has fostered an environment in certain online communities where criticizing games has almost been turned into a kind of taboo.

Sounds more like a constructed strawman to me tbh

"Don't be mean to game X, it's hurtful to the developer!", that sort of thinking. The consequence is that games keep getting praised above their actual achievements,

Again, according to whom? You? The only achievement you're pointing to is sales. No one is denying that certain games were not sales successes. But if a game has good critical reception and good player reception, that normally points to people saying it was good.

and those who do are called haters or met with variants of 'but corona!!1'.

I mean you do sound like a hater to be blunt. And covid-19 was a real thing that affected lots of games. It was a well documented fact. That doesn't change whether a game was financially or critically successful and it doesn't change the economics of business in play, but in an industry where games can take 4 to 6 years to make, it is totally fair to acknowledge a once in a lifetime event's impact on industry stakeholders.

There's a reason why many feel disappointed by the "PS5-generation", not because the games are necessarily bad, but because they're still on the gameplay/ambition level of previous gen-games, outside of framerate and resolution. And that's catching up to big publishers now who depend on high sales for their AAA-budget productions.

As generations go on we're not going to see the leaps in ambition and gameplay of past years. That's just reality. These things just cost way too much money to make and tech hasn't been a limiter to gameplay design in a long time.

In other words, which SE-jrpg should the greater masses have been excited for beyond the FF-core fanbase? When I look at their output, it's no wonder to me why f2p-games win over many gamers. SE, but other publishers too, are making 'maintenance games' and that has worked for a long time, but apparently that time is over now. I mean, you see it with Capcom and RE, too. To boost sales, Capcom heavily relies on cheap gimmicks like Lady Diminestru. Maybe the open wold-RE9 will be the truly exciting game that attracts the masses with the quality if the game itself. Halo is in a deep crisis because Microsoft cannot figure out how to bring good change to the franchise. And Nintendo keeps Metroid around for prestige, but can't figure out how to hoist the franchise past 3 mio. It's not just SE. But to blame the different market and f2p is such a copout imo.

Acknowledging the market conditions that you operate in isn't the same as blaming them. That you choose to read it like that is a you problem. Every publisher has this information and is adapting/trying to find the optimal strategy.

Make more exciting games and people will flock to them.

Ohhhhhhhhh, well if you just put it like that it's easy. Why did no one think of that?
 
Ohhhhhhhhh, well if you just put it like that it's easy. Why did no one think of that?
More developers really should just push the "excellent, genre defining game" button. Would save so much trouble.

Seriously though, if it were that easy, Square would've done that already. It doesn't help that nobody seems to even agree what Final Fantasy is even supposed to be anymore - the nice thing about Zelda is that in a way it was something of a return to the original 2D style - just reinterpreted to something vastly more expensive and impressive given the technology finally existed to allow for it.

What exactly is a genre defining Final Fantasy supposed to be? You ask 10 different people and you're going to get 10 different answers.
 
They need to make a new FF game with multiple possible story route and ending possibilities instead of a linear one, like Baldur's Gate III or the older Bioware Rpg Games. Or make a new openworld FF game with multiple possible story possibilities and endings like Witcher III but with actual controllable party members.
 
I wasn't even talking about SE titles specifically. Just that lots of good/great/amazing products don't find commercial success. Which has been true in games (and really in entertainment as a whole) forever. Unless you think any game that doesn't sell well isn't well made which we can just stop now then. Because what what metrics are you using to say that these games are not excellent?



Sounds more like a constructed strawman to me tbh



Again, according to whom? You? The only achievement you're pointing to is sales. No one is denying that certain games were not sales successes. But if a game has good critical reception and good player reception, that normally points to people saying it was good.



I mean you do sound like a hater to be blunt. And covid-19 was a real thing that affected lots of games. It was a well documented fact. That doesn't change whether a game was financially or critically successful and it doesn't change the economics of business in play, but in an industry where games can take 4 to 6 years to make, it is totally fair to acknowledge a once in a lifetime event's impact on industry stakeholders.



As generations go on we're not going to see the leaps in ambition and gameplay of past years. That's just reality. These things just cost way too much money to make and tech hasn't been a limiter to gameplay design in a long time.



Acknowledging the market conditions that you operate in isn't the same as blaming them. That you choose to read it like that is a you problem. Every publisher has this information and is adapting/trying to find the optimal strategy.



Ohhhhhhhhh, well if you just put it like that it's easy. Why did no one think of that?

More developers really should just push the "excellent, genre defining game" button. Would save so much trouble.

Seriously though, if it were that easy, Square would've done that already. It doesn't help that nobody seems to even agree what Final Fantasy is even supposed to be anymore - the nice thing about Zelda is that in a way it was something of a return to the original 2D style - just reinterpreted to something vastly more expensive and impressive given the technology finally existed to allow for it.

What exactly is a genre defining Final Fantasy supposed to be? You ask 10 different people and you're going to get 10 different answers.

First of all, ofc, sales and quality aren't firmly tied to each other. That's why I said that I'm not calling all the games SE makes are 'not good'. I use the word 'exciting' and I thought my choice of games that I mentioned made clear what that contains.

Now, you're making fun of my proposition, but I actually disagree, because imo it IS not that difficult to make exciting, groundbreaking games. And that doesn't require unrealistic budgets necessarily either. I assume big publishers simply are too risk averse, so instead of trying something truly fresh, they're repeating old, 'proven' designs. Hence my Netflix example.

Take FF16. What did it actually bring new, exciting to the table? Medieval setting? Maybe new to 3d-FF, but gamers are used to countless Medieval games. Action-combat? Maybe new for FF, but for one, did fans really want that, and for two, action-combat is nothing new, either, in the Industry. It's not easy to pinpoint what's 'fresh', because someone will surely counter me with 'but there were games with climbing before BotW!', so execution matters, too. But SE, like many publishers, relies too much on changes that feel like shifting forth and back between old, beentheredonethat-elements.

I'm actually sure that there's lots of designers at SE that have truly exciting ideas, but they're not getting the chance to do it. So we're stuck with 'only good' games and only when that ship crashes and sinks, new ideas will get their chance. It's exactly what happened with Zelda after Skyward Sword sank the franchise. Up the quality of your game design, make things interesting, and the f2p-crowd will raise an eyebrows, too.
 
Now, you're making fun of my proposition, but I actually disagree, because imo it IS not that difficult to make exciting, groundbreaking games.
When working in any craft—writing, carpentry, cooking, programming, game design—it is hideously, unbelievably difficult to produce anything truly noteworthy on a national or global stage. The material realities experienced by people, such as working for a multinational corporation where competing interests are at play creatively and financially, makes it effectively impossible. Making something groundbreaking is at least an order of magnitude harder than that. Maybe more

I think your position betrays a lack of perspective. Regardless of the mistakes Square has made, the act of developing an excellent video game is still incredibly difficult and time-consuming for the actual software developers, artists, testers, etc. who work on these games. These things only feel easy to executives, because they're not doing any work
 
When working in any craft—writing, carpentry, cooking, programming, game design—it is hideously, unbelievably difficult to produce anything truly noteworthy on a national or global stage. The material realities experienced by people, such as working for a multinational corporation where competing interests are at play creatively and financially, makes it effectively impossible. Making something groundbreaking is at least an order of magnitude harder than that. Maybe more

I think your position betrays a lack of perspective. Regardless of the mistakes Square has made, the act of developing an excellent video game is still incredibly difficult and time-consuming for the actual software developers, artists, testers, etc. who work on these games. These things only feel easy to executives, because they're not doing any work
Yep. It feels like a disservice to the devs who manage to create something truly zeitgeist defining like BoTW to suggest that something like that is in any way easy. Even then, you have to catch the eye of the public - I'm sure there are plenty of unique video games with potentially genre defining ideas that just go quietly by. Now this is where Square actually shouldn't really have an issue - they still have a large core fanbase and plenty of streamers and influencers are more than willing to play a FF game to catch the eye of the public.

Besides, by all accounts Rebirth is an incredible video game - but the many, many mistakes Square has made with the IP and as a company in general have led them to this point.
 
Kids play F2P
So don't play games
Kiddo is also the main Nintendo core target (for the developers of "games)
But Nintendo hasnt been impacted by F2P
Anyway developers of "games" arent focusing on Nintendo platform

There is something wrong in there.
 
Yep. It feels like a disservice to the devs who manage to create something truly zeitgeist defining like BoTW to suggest that something like that is in any way easy. Even then, you have to catch the eye of the public - I'm sure there are plenty of unique video games with potentially genre defining ideas that just go quietly by. Now this is where Square actually shouldn't really have an issue - they still have a large core fanbase and plenty of streamers and influencers are more than willing to play a FF game to catch the eye of the public.

Besides, by all accounts Rebirth is an incredible video game - but the many, many mistakes Square has made with the IP and as a company in general have led them to this point.
Exactly, if it was easy to make a franchise break out, Nintendo would have managed that for Zelda during the Wii era already. Instead Skyward Sword sold less than 4 million copies.
 
Kids play F2P
So don't play games
Kiddo is also the main Nintendo core target (for the developers of "games)
But Nintendo hasnt been impacted by F2P
Anyway developers of "games" arent focusing on Nintendo platform

There is something wrong in there.

Who says it's just kids playing F2P games? You think Apex Legends, Valorant, Warzone, Rocket League, Genshin Impact, League of Legends etc are only played by kids?

I feel like you're already starting this argument with a conclusion and the data doesn't suggest that. Certainly F2P games have large kid playbases just based on thr fact they don't cost money but there is nothing that suggests those games don't eat up a significant amount of adult available hours.
 
Who says it's just kids playing F2P games? You think Apex Legends, Valorant, Warzone, Rocket League, Genshin Impact, League of Legends etc are only played by kids?

I feel like you're already starting this argument with a conclusion and the data doesn't suggest that. Certainly F2P games have large kid playbases just based on thr fact they don't cost money but there is nothing that suggests those games don't eat up a significant amount of adult available hours.


The ex SE employee quoted in this very thread? He continues to cite "younger audience" to explain FF sales curve difficulties

Anyway even if F2P are played by all ages (not against that idea) that wouldn't still explain why certain traditional products decreased while other increased to record breaking numbers
 
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Commentary from Jacob Navok, who previously worked for Square Enix.



His commentary is absolute nonsense, although it's useful in helping explain why S-E's western operations were an ongoing mess. Just to pick through the core issues with this:

-He claims to have "correctly predicted S-E would break exclusivity", but writes paragraphs about issues with audience size which he erroneously blames on costs, Fortnite and Roblox, instead of, you know, S-E's repeated decisions to arbitrarily limit their audience size through exclusivity, which is never mentioned. Of course, when you add the context of S-E's western business infamously flubbing their Tomb Raider reboot series in part through exclusivity with Microsoft, you can see why he might ignore this element.
-Again, despite identifying audience size as an issue, he also doubles down on endorsing the path Square-Enix have repeatedly chosen which has decreased their audience size - taking deals with Epic:
There's another path that I can think of, which is increasing the take rate. If publishers can capture more of the platform side revenue, they can moderate price point increases while capturing a better return on investment because they'll be capturing say $50 or $55 out of $70.
@TimSweeneyEpic knows this which is why he's fighting the good fight on platform fees, both at EGS and with the app stores, to open up PC and mobile ecosystems.This is also why you'll see MS and others take advantage of his fight and start their own app stores. (You would think MS would chip in for Epic's legal fees given they're capturing the benefits with no risk!)But this path will take time, and is very hard on consoles, where the AAA publishers make a lot of their money, so expect price increases to still be the norm.
"Fighting the good fight on platform fees" really says it all - essentially rolling on the ground crying to the referee because you can't make a business model work, when plenty of others in the same position demonstrably can. I actually can't believe he posted this while S-E sits in the smouldering wreckage of their follies with Epic, and while EGS has been an utter failure.
-On top of all of the above, he fails to mention that not only do S-E have a service game that generates massive recurring revenues for them, they have a Final Fantasy themed one, and not only that, it's a mainline numbered entry. So S-E are not only a beneficiary of the recurring sales model that he claims traditional games can't compete with, but they actually have a successful Final Fantasy game in this model, and have simply failed to capitalise on its success in other parts of the franchise. We also have Foamstars - an example of Square-Enix creating a modern service game with the Fortnite/Roblox revenue model, but of course they couldn't help but engage in blatantly greedy self-sabotage by somehow making their service games more exclusive to PlayStation than Sony's own titles.
-Finally, picking pre- and post-2015 as an inflection point betrays that he is merely reacting to events rather than innovating or driving events. The "Fortnite/Roblox business model" dates back to Team Fortress 2. It's convenient to pretend this business model was some kind of surprise that nobody in the industry could have predicated (it means you can absolve yourself of blame for not responding to it until after the fact) but the model was very obviously a gigantic success on Steam long before Fortnite's release. And of course, as mentioned above S-E actually had a Final Fantasy game with a recurring revenue model of its own, but back then it was recovering from being the most catastrophic MMO launch in history.

All in all, he simply omits the most critical factors in Square-Enix' poor fortunes - a long recent history of games with production issues, coupled with an eagerness to fuck over their own customer base through either arbitrary platform choices (let's scatter Kingdom Hearts fans to multiple competing handhelds followed by some mobile games between sequels) or simply taking bags of money from platform holders with no regard for the consequences of doing so.
 
Jacob wasn't decrying F2P games, just saying things that we've heard over the past year or two where live service games like Minecraft, Roblox, Fortnite, etc are gobbling up whatever growth there is for the industry. Square Enix made plans a decade ago for XVI and Rebirth prior to this radical shift in consumer attention and spending while also making a bet that the PS5 would follow suit in the PS4's footsteps, people would widely adopt it and also be willing to purchase Final Fantasy games exclusively released on it. Sony themselves released their biggest PS5 games early on with PS4 versions despite the 'we believe in generations' tagline. Miles Morales, Horizon Forbidden West and God of War Ragnarok would have sold a lot worse had they launched exclusively on PS5.
 
His commentary is absolute nonsense, although it's useful in helping explain why S-E's western operations were an ongoing mess. Just to pick through the core issues with this:

-He claims to have "correctly predicted S-E would break exclusivity", but writes paragraphs about issues with audience size which he erroneously blames on costs, Fortnite and Roblox, instead of, you know, S-E's repeated decisions to arbitrarily limit their audience size through exclusivity, which is never mentioned. Of course, when you add the context of S-E's western business infamously flubbing their Tomb Raider reboot series in part through exclusivity with Microsoft, you can see why he might ignore this element.
-Again, despite identifying audience size as an issue, he also doubles down on endorsing the path Square-Enix have repeatedly chosen which has decreased their audience size - taking deals with Epic:

"Fighting the good fight on platform fees" really says it all - essentially rolling on the ground crying to the referee because you can't make a business model work, when plenty of others in the same position demonstrably can. I actually can't believe he posted this while S-E sits in the smouldering wreckage of their follies with Epic, and while EGS has been an utter failure.
-On top of all of the above, he fails to mention that not only do S-E have a service game that generates massive recurring revenues for them, they have a Final Fantasy themed one, and not only that, it's a mainline numbered entry. So S-E are not only a beneficiary of the recurring sales model that he claims traditional games can't compete with, but they actually have a successful Final Fantasy game in this model, and have simply failed to capitalise on its success in other parts of the franchise. We also have Foamstars - an example of Square-Enix creating a modern service game with the Fortnite/Roblox revenue model, but of course they couldn't help but engage in blatantly greedy self-sabotage by somehow making their service games more exclusive to PlayStation than Sony's own titles.
-Finally, picking pre- and post-2015 as an inflection point betrays that he is merely reacting to events rather than innovating or driving events. The "Fortnite/Roblox business model" dates back to Team Fortress 2. It's convenient to pretend this business model was some kind of surprise that nobody in the industry could have predicated (it means you can absolve yourself of blame for not responding to it until after the fact) but the model was very obviously a gigantic success on Steam long before Fortnite's release. And of course, as mentioned above S-E actually had a Final Fantasy game with a recurring revenue model of its own, but back then it was recovering from being the most catastrophic MMO launch in history.

All in all, he simply omits the most critical factors in Square-Enix' poor fortunes - a long recent history of games with production issues, coupled with an eagerness to fuck over their own customer base through either arbitrary platform choices (let's scatter Kingdom Hearts fans to multiple competing handhelds followed by some mobile games between sequels) or simply taking bags of money from platform holders with no regard for the consequences of doing so.
Honestly his analysis about what reasonable sales targets are was also shit, essentially saying every business needed their products to beat the unprecedented returns of the uninterrupted longest bull market in modern history, which was itself sustained only by zero and near-zero interest rates, to be considered a success.

1) Well gee why doesn't Square Enix and every other company that isn't an investment broker just become an investment broker? Clearly that's the only way to make "reasonable" profits according to This Guy!

2) When managed correctly, the returns from a business should be far more predictable and less at-risk than stock market returns, with the trade-off that they're often lower. Risk-reward scale is a basic investing principle. It's either disingenuous or plain stupid to look back at 14% annual return and say, "Investing in that what was obviously the smart play," as if SE could have known with any certainty 10 years ago that the market wouldn't crater until March of 2020 and could have confidently plowed all their spare cash into investing in 2014 instead of game development without fear.

Honestly this venture capital mentality that has infected companies like Square Enix is the biggest problem facing Western games. Not all businesses can or should be run like financial firms, pursuing limitless growth on steroids and anything less than that is a failure. It's very possible to make good games that make steady profit and keep a company healthy and thriving at a comfortably small size. It's the obsession with needing to make enough profit to fuel growth to make even more profit to fuel even more growth, ad infinitum with no ceiling in sight, that causes them to make these high risk high reward bets, the inevitably poor results of which have been shuttering Western studios for the past couple of years now.

I'm reminded of the Phil Spencer email from the FTC case files, where he seemed positively bewildered that Nintendo wasn't trying to grow as fast as they possibly could, lamenting that a hostile takeover was unlikely because for some bizarre reason, Nintendo's board are just "letting them sit on a pile of cash" without pressing them to invest it in market expansion. Nintendo has more cash than debt, which Western games companies can't even wrap their minds around long enough to understand why they would choose such a strategy.
 
Honestly his analysis about what reasonable sales targets are was also shit, essentially saying every business needed their products to beat the unprecedented returns of the uninterrupted longest bull market in modern history, which was itself sustained only by zero and near-zero interest rates, to be considered a success.
Uh no, the idea that a business would set their return on investment to be atleast the average of what they could have gotten investing that money into the stock market is very normal. That's the bare minimum you would expect a project to make back to justify the investment and that's how you would budget it. Otherwise quite literally, you're better off throwing your money in the Nasdaq or Dow or hell, any random portfolio of stocks and you'd see a better return than taking on all the additional risk.

And like, just use logic. If you invest $100 million in a project, over 5 years, what return would you expect to make to justify using that kind of money into a one time endeavour? 10% ROI? 15%?

No, most of the time you're looking to double your investment on a serious project of this length. Even if the NPV of the project was positve and thus it technically wasn't a bad use of money it certainly would be suboptimal. A 5% average return over 5 years on a $100m investment is $28m and 5% return is something low enough that most people as even amateur investors could get. Nothing he said is strange or off base.

1) Well gee why doesn't Square Enix and every other company that isn't an investment broker just become an investment broker? Clearly that's the only way to make "reasonable" profits according to This Guy!
No, he's just explaining the basics that big companies use to pick projects and budget them. Also, no one fucking invests in these companies just for them to take that money and put it into the stock market instead of the business itself. If you're an investor, you'd be saying "if you were just going to put this shit in the stock market, I could have just done that myself". People invest in you to use your expertise to make gains over what they would get with average market performance. Like duh, otherwise why are they wasting their time?

2) When managed correctly, the returns from a business should be far more predictable and less at-risk than stock market returns, with the trade-off that they're often lower. Risk-reward scale is a basic investing principle. It's either disingenuous or plain stupid to look back at 14% annual return and say, "Investing in that what was obviously the smart play," as if SE could have known with any certainty 10 years ago that the market wouldn't crater until March of 2020 and could have confidently plowed all their spare cash into investing in 2014 instead of game development without fear.
I'ma be honest, you're way out to lunch. That's not what he is saying at all. All he is saying is that this is how you budget projects. And those budgets are all risk adjusted as well because markets always ride highs and lows that have some periodic trends to them where you can more of less ball park if something will hold. And again, it's a market average return, it isn't calculated over 1 year, it's averaged over a notably long period.

2x return over a 5 year investment is not crazy. And this isn't $200m discounted back to its present value either. This is just $200m unadjusted income. What the dude said is very basic project selection and budgeting. They are never going to invest that money in the stock market for reasons I already stated. But they do need to set a base to decide if this project still makes sense to pursue. And the economics for the types of games SE make are obviously in danger now because they can't/aren't having returns that match even the most average of market returns. Which means, they just risk spending money on projects with fuck all to return.

Now obviously SE is a games company and they have to make games in the series that built the company but that's where all the economics and the changes in the market he described come into effect.

Honestly this venture capital mentality that has infected companies like Square Enix is the biggest problem facing Western games. Not all businesses can or should be run like financial firms, pursuing limitless growth on steroids and anything less than that is a failure. It's very possible to make good games that make steady profit and keep a company healthy and thriving at a comfortably small size. It's the obsession with needing to make enough profit to fuel growth to make even more profit to fuel even more growth, ad infinitum with no ceiling in sight, that causes them to make these high risk high reward bets, the inevitably poor results of which have been shuttering Western studios for the past couple of years now.

I might agree with that analysis but that really is not what he said. You can't run a company the size of SE on projects that take 4 to 6 years to make and are doing 20% ROI. This is not feasible. This is not necessarily about pursuing limitless growth. This is about the market for AAA games changing the economics of how you budget and set expectations. And I've said it many times, the average AAA game will eventually get to the point where budgets will get capped because they can't make reliable returns anymore. Eventually the math stops working and what he said will happen. The price goes up. Cost cutting measures come into play. Or you find more accessible audience to buy.

I'm reminded of the Phil Spencer email from the FTC case files, where he seemed positively bewildered that Nintendo wasn't trying to grow as fast as they possibly could, lamenting that a hostile takeover was unlikely because for some bizarre reason, Nintendo's board are just "letting them sit on a pile of cash" without pressing them to invest it in market expansion. Nintendo has more cash than debt, which Western games companies can't even wrap their minds around long enough to understand why they would choose such a strategy.
Nintendo's capital structure is interesting and I would imagine it is a strategy born from a lot of market analysis and understanding of their competitive advantage. But it isn't odd a board of directors or shareholders don't want companies they invest in to sit on cash instead of using it for something. Most invest in you to use your skills to generate value. They don't invest in you to just be a bank account for money. They can do that themselves. If you are going to have all this money then pay us dividends is the thought. This is the same thing that shareholders had asked of Apple in the 2000s into early 2010s despite Jobs being super opposed to dividends.

I know everyone wants to think people that run these companies and investors are dumb but they aren't. Now, do I think we can operate in this growth over everything capitalistic society indefinitely? No, it's not sustainable. But the logic that this former SE employee was saying is sound. There was nothing crazy in there.

The ex SE employee quoted in this very thread? He continues to cite "younger audience" to explain FF sales curve difficulties

You're grossly simplifying it. Like lets looks at what he actually said. First about older gamers.

I expect Fortnite, Roblox, Warzone, and similar products to continue to grow revenue. Meanwhile, put yourself in an older gamer's shoes: if you're a gamer with disposable income but less free time, and you have the choice of paying $70 to play 100 hours in FF16 or to just continue playing Fortnite with your friends for free, you'll wait to see the FF16 reviews before you decide whether to switch off FN.

In other words, your switching costs (how good a game is, how exciting it needs to be) are now substantially higher than when you'd finish the latest Assassin's Creed and look for the next title to fill your time, because you’re awash with content options. Fortnite doesn't end.

Now about younger gamers.

Now if you're a younger gamer in your teens, you may not even be thinking about FF. If you are 13 years old now, you were 5 years old when the last mainline FF, FF15, came out.

Your family may not own a PS5 and you may not care. You're satisfied with Fortnite or Roblox or Minecraft with your friends on your phone or laptop. I'm not say that this is the case for everyone. But it is certainly a trend.

You're nitpicking his statements in an extremely disingenous way. Explain how any of this is untrue?

I swear we're just making shit up about what was being said.

Anyway even if F2P are played by all ages (not against that idea) that wouldn't still explain why certain traditional products decreased while other increased to record breaking numbers

Do we need to deal in extremes? Logically some traditional products will thrive under new market conditions and some will suffer. That has "always" been the case. That isn't something that needs an explaination. Some series grow massively. Some fall off a cliff. Time and taste always comes into play. However, no one can say with a straight face that the barriers to success for your average AAA title have not increased. Which is what he is talking about. In aggregate. There are obvious exceptions and there are also industry mainstays too. It would be like saying the fact that GTA6 will sell a billion copies means nothing in the market has changed.
 
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Uh no, the idea that a business would set their return on investment to be atleast the average of what they could have gotten investing that money into the stock market is very normal. That's the bare minimum you would expect a project to make back to justify the investment and that's how you would budget it. Otherwise quite literally, you're better off throwing your money in the Nasdaq or Dow or hell, any random portfolio of stocks and you'd see a better return than taking on all the additional risk.

And like, just use logic. If you invest $100 million in a project, over 5 years, what return would you expect to make to justify using that kind of money into a one time endeavour? 10% ROI? 15%?

No, most of the time you're looking to double your investment on a serious project of this length. Even if the NPV of the project was positve and thus it technically wasn't a bad use of money it certainly would be suboptimal. A 5% average return over 5 years on a $100m investment is $28m and 5% return is something low enough that most people as even amateur investors could get. Nothing he said is strange or off base.


No, he's just explaining the basics that big companies use to pick projects and budget them. Also, no one fucking invests in these companies just for them to take that money and put it into the stock market instead of the business itself. If you're an investor, you'd be saying "if you were just going to put this shit in the stock market, I could have just done that myself". People invest in you to use your expertise to make gains over what they would get with average market performance. Like duh, otherwise why are they wasting their time?


I'ma be honest, you're way out to lunch. That's not what he is saying at all. All he is saying is that this is how you budget projects. And those budgets are all risk adjusted as well because markets always ride highs and lows that have some periodic trends to them where you can more of less ball park if something will hold. And again, it's a market average return, it isn't calculated over 1 year, it's averaged over a notably long period.

2x return over a 5 year investment is not crazy. And this isn't $200m discounted back to its present value either. This is just $200m unadjusted income. What the dude said is very basic project selection and budgeting. They are never going to invest that money in the stock market for reasons I already stated. But they do need to set a base to decide if this project still makes sense to pursue. And the economics for the types of games SE make are obviously in danger now because they can't/aren't having returns that match even the most average of market returns. Which means, they just risk spending money on projects with fuck all to return.

Now obviously SE is a games company and they have to make games in the series that built the company but that's where all the economics and the changes in the market he described come into effect.



I might agree with that analysis but that really is not what he said. You can't run a company the size of SE on projects that take 4 to 6 years to make and are doing 20% ROI. This is not feasible. This is not necessarily about pursuing limitless growth. This is about the market for AAA games changing the economics of how you budget and set expectations. And I've said it many times, the average AAA game will eventually get to the point where budgets will get capped because they can't make reliable returns anymore. Eventually the math stops working and what he said will happen. The price goes up. Cost cutting measures come into play. Or you find more accessible audience to buy.


Nintendo's capital structure is interesting and I would imagine it is a strategy born from a lot of market analysis and understanding of their competitive advantage. But it isn't odd a board of directors or shareholders don't want companies they invest in to sit on cash instead of using it for something. Most invest in you to use your skills to generate value. They don't invest in you to just be a bank account for money. They can do that themselves. If you are going to have all this money then pay us dividends is the thought. This is the same thing that shareholders had asked of Apple in the 2000s into early 2010s despite Jobs being super opposed to dividends.

I know everyone wants to think people that run these companies and investors are dumb but they aren't. Now, do I think we can operate in this growth over everything capitalistic society indefinitely? No, it's not sustainable. But the logic that this former SE employee was saying is sound. There was nothing crazy in there.



You're grossly simplifying it. Like lets looks at what he actually said. First about older gamers.



Now about younger gamers.



You're nitpicking his statements in an extremely disingenous way. Explain how any of this is untrue?

I swear we're just making shit up about what was being said.



Do we need to deal in extremes? Logically some traditional products will thrive under new market conditions and some will suffer. That has "always" been the case. That isn't something that needs an explaination. Some series grow massively. Some fall off a cliff. Time and taste always comes into play. However, no one can say with a straight face that the barriers to success for your average AAA title have not increased. Which is what he is talking about. In aggregate. There are obvious exceptions and there are also industry mainstays too. It would be like saying the fact that GTA6 will sell a billion copies means nothing in the market has changed.


I am over simplifying while it's ok to day "some series sell other don't"?
His analysis on (especially younger) consumers is obviously right, in terms of new ways of spending behaviours or spending time from more than a decade ago
Now, this analysis is telling nothing or WHY this series specifically (FF) has been impacted by this new landscape of F2P
While others not
And it's not only Nintendo, there are plenty of thriving classic products doing not only fine, but great on the market
Also on PS5

So, let's discuss: why has FF been impacted so negatively by F2P new playing/spending behaviours?
 
I am over simplifying while it's ok to day "some series sell other don't"?
His analysis on (especially younger) consumers is obviously right, in terms of new ways of spending behaviours or spending time from more than a decade ago
Now, this analysis is telling nothing or WHY this series specifically (FF) has been impacted by this new landscape of F2P
While others not
And it's not only Nintendo, there are plenty of thriving classic products doing not only fine, but great on the market
Also on PS5

So, let's discuss: why has FF been impacted so negatively by F2P new playing/spending behaviours?
Well there's the obvious Console exclusivity bit that's really not helping, but aside from that? Normally, I actually think that something with the release cadence of the series of the whole actually shouldn't be having any problems retaining and attracting new fans - they release spinoffs, and if you count VII Remake series as part of the "mainline" (which you essentially should, they're AAA games) then they only really go a few years in between releases, which is mostly fine. Problem is that Final Fantasy's insistence on reinventing itself every single game has completely screwed its ability to actually grow - FF15, FFXVI, FFVII Remake - none of these games play alike at all. And Remake series aside, there's no guarantee they will ever iterate on the other gameplay formula - so they've pigeonholed themselves into cultivating what are effectively entirely separate core fanbases - with lots of overlap of course among the hardcore FF fans, but at the end of the day, someone who likes FFVII Remake is not guaranteed to like FFXVI and is not guaranteed to like FFXV and is not guaranteed to like their remasters and is... you get it. This is a problem. (While Rebirth iterated, the fact that it is exclusive to the PS5 and more importantly - is a direct JRPG sequel outweighed that by far.)

Its not you can't have multiple gameplay formula and iterate on them separately, as long as you continue both styles. Just look at good old Capcom - REmakes and RE7/8 play differently, though they both have core overlap (like FF does) but they're also able to grow because they keep iterating and improving on the gameplay and they release multiple games using the same core style. RE9 is apparently featuring Leon so I guess it'll play like the REmakes - again, fanbase expansion, probably critical acclaim, I'm sure it'll be the fastest selling in the series.
 
So, let's discuss: why has FF been impacted so negatively by F2P new playing/spending behaviours?
While FF being not the only one impacted, the reason for that is mainly exclusivity. Right now, the biggest successes right now are either the games that are released on multiple platforms (1) or the ones with a huge IP attached to it, either established or transmedia (2).

1. PC is essential that regard - Baldur's Gate, Cyberpunk, Palworld, HellDivers etc. Most of their success I safely attribute to PC.
2. GoW and SM2, despite being exclusive - has a hugely popular IPs attached to them (though of course in their case they also bundled with consoles but that's a separate matter). Even older games have a resurgence like FO4 due to transmedia power.

One of the observations that I have is that by and large, exclusives do not drive the console sales anymore - how many consoles did Hogwarts move? And it was not an exclusive game at all. Same is expected with GTA6 - and it is not the exclusive game either. So far, the pattern is basically people either sticking to the last gen or just ignoring the game altogether if it is not coming to their preferable platform. And even then they buy platforms looking at - "can I play FIFA there? And Hogwarts? Then I will buy it". And other games will be hardly relevant in making that decision. I would not be surprised if some folks bought consoles to play FO4 too for example (like PS4, the cheapest console to play FO4 now).

But what does FF have exactly? It is attached to a single platform (for years), meaning that people on Xbox and PC will just ignore the game altogether. It will also affect purchase decisions on PS5 - if your friends who play games on other platforms cannot play the same game, you won't be inclined to buy it too. Gaming has become much more social than ever before. FF also has zero media pull (it is not early 2000s anymore). I think the push that Square Enix made with FF15 years ago (with their their attempts to expand to games, comics, whatever it was and plus multiplatform push) was a correct way to promote the game - but it was a little bit too early.

It is one of those problems I see with Xbox - I do believe that a lot of games suffer from the fact that they are not available on PS, meaning that the whole markets like european or asian, are basically ignore their games. "Oh, there is that cool game! Sorry, bro, I play on Playstation. Let's play something else". And it is the same situation with FF - sure people will dismiss Xbox - but the point is that the whole set of PC gamers who generate millions CCU will also ignore the game, meaning that people on PS won't buy the game because their friends cannot play the game.

On Switch situation is a little bit different because - coincidentally due to lower power - Nintendo has less huge F2P games. COD and GTA Online for example are not there at all. Or for example Genshin Impact. But we see from the charts that Minecraft is a consistent seller, so Nintendo is also affected. Just with a delay due to less powerful platform (maybe a demographics is little bit different, I still believe that Switch is appealing in a lot of ways to the same people who play mobile games). Mario Kart is also a GaaS in all but name (it is similar in a way) but by and large - everywhere there are consistent same games selling tons, despite being released years ago. And that's while we still have some random older games popping up from time to time. Top sellers on Switch are Mario Kart, Animal Crossing, Minecraft, Splatoon...Hardly new games. So Nintendo is also influenced by the market reality - I mean arguably BOTW is/was doing better than TOTK despite TOTK being a newer game released on a much bigger Switch userbase (though again in case of BOTW it has been a seller for years).

Essentially there is a trend of "playing the games I want on a device I want". Otherwise people just skip the games and play "evergreen" COD and Fortnite.
 
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I don't get how people are downplaying the content of that thread. A lot of that thread is true. The rise of live games that expand and consistently introduce new content is something that wasn't common 10 years ago. The amount of audience capture singular games have these days is way higher than back in the day. That's something that publishers have to accept and address in the market given that games are much more expensive to make.

No where did he say FTP games are evil but it is true that a smaller pool of games eat up the average playtime available for games. Lots of excellent games don't find commercial success. The market is fierce. Perhaps your game was not "exciting" enough but margin for error is a lot lower these days and that drives costs.

Obviously traditional model games still sell really well but the room for error is lower and that's something publishers have to acknowledge. Consolidation around fewer brands and bigger brands is a thing. Obviously SE has lots of other issues but I don't think this is just them. The math for AAA games is changing.
There is no "rise" in live games, is the point. Square Enix themselves have been releasing "live games" since 2002. Once such game, originally released in the 90s, is still getting updates as recently as last year. Telling me such games weren't common even a decade ago is a farce and easily disproven by release catalogs. To claim to the contrary is historical revisionism. Everyone has more audience they can capture in every market segment, the market has always been fierce since its inception. The room for error is only lower because publishers are taking on more costs in development than the market can uniformly withstand for every release, and thus over-inflating their own risk. It's a self-made problem utterly, the boogeyman being invoked is not real. And knowing that, the whole premise falls apart because it's built on top of a fiction.
 
There is no "rise" in live games, is the point. Square Enix themselves have been releasing "live games" since 2002. Once such game, originally released in the 90s, is still getting updates as recently as last year. Telling me such games weren't common even a decade ago is a farce and easily disproven by release catalogs. To claim to the contrary is historical revisionism. Everyone has more audience they can capture in every market segment, the market has always been fierce since its inception. The room for error is only lower because publishers are taking on more costs in development than the market can uniformly withstand for every release, and thus over-inflating their own risk. It's a self-made problem utterly, the boogeyman being invoked is not real. And knowing that, the whole premise falls apart because it's built on top of a fiction.
There were few and between games like that. And most of them - PC WoW aside - never got updates beyond their original platform. Now we have games spanning 10 years and getting consistent updates across wide range of devices. Those games are platforms by themselves and basically form PC ecosystem on steroids. We even have resurgence of games being playable on previous gen devices. It would be akin in PS3 era games charting being playable on PS2 in the middle of PS3 gen.

Another thing is that these days, the games are getting updates months and years after the release. New patches, visual upgrades, performance patches. In the past, you had not many games that even had DLCs, much less 30fps to 60fps updates. Which also create a situation with older games pulling away the attention from newer games.
 
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Sony themselves released their biggest PS5 games early on with PS4 versions despite the 'we believe in generations' tagline. Miles Morales, Horizon Forbidden West and God of War Ragnarok would have sold a lot worse had they launched exclusively on PS5.

And then Sony has proclaimed Spider-Man 2, which released exclusively on PlayStation 5, as the fastest-selling PlayStation Studios game in the company's history.

At the same time Final Fantasy XVI, released on the same console during the same year, sold less then Square Enix expected, while Final Fantasy VII Rebirth, released on a bigger userbase in 2024, sold even less.

Userbase is absolutely not a problem today. PS5 is mature enough to have its record-breaking exclusive hits. Problem is in Final Fantasy itself and terrible IP management over the years.
 
I am over simplifying while it's ok to day "some series sell other don't"?
His analysis on (especially younger) consumers is obviously right, in terms of new ways of spending behaviours or spending time from more than a decade ago
Now, this analysis is telling nothing or WHY this series specifically (FF) has been impacted by this new landscape of F2P
While others not
And it's not only Nintendo, there are plenty of thriving classic products doing not only fine, but great on the market
Also on PS5

So, let's discuss: why has FF been impacted so negatively by F2P new playing/spending behaviours?

Well FF has been in decline for 25 years. Since the PS1 basically. And the titles have not had their original levels of critical acclaim since FF12. So FF specifically has had quality issues and also release cadence issues. And JRPGs generally don't have anything resembling good trailing sales. The games also have no replay value so like he said in the snippet I quoted, if you have to pick between this $70 game from this franchise that has fallen from its quality high or invest in other ecosystems and play games with unusually high stickiness the answer is really easy for consumers.

Then Rebirth specifically is episodic. And of course FF not leaning into consistent release and platform strategies. Like there are lots of reasons for FF specifically "but" his analysis wasn't even saying FF fails to sell because of F2P games. He said in his opening statement:

There's a misunderstanding that has been repeated for nearly a decade and a half that Square Enix sets arbitrarily high sales requirements then gets upset when its arbitrarily high sales requirements fail to be met.

He spent about half that thread talking about how budgeting worked and the other talking about how new market economics change the way AAA games need to be addressed in the market. He doesn't really come out and say FF is doing amazing in all facets and F2P games ruined everything. The closest he said was having a titles like Rebirth get a 92 on metacritic and not get the attention of consumers is a difficult position.

So again, what he said is being taken way out of context with your original post.

There is no "rise" in live games, is the point. Square Enix themselves have been releasing "live games" since 2002. Once such game, originally released in the 90s, is still getting updates as recently as last year. Telling me such games weren't common even a decade ago is a farce and easily disproven by release catalogs. To claim to the contrary is historical revisionism. Everyone has more audience they can capture in every market segment, the market has always been fierce since its inception. The room for error is only lower because publishers are taking on more costs in development than the market can uniformly withstand for every release, and thus over-inflating their own risk. It's a self-made problem utterly, the boogeyman being invoked is not real. And knowing that, the whole premise falls apart because it's built on top of a fiction.

This is wildly disingenuous. The market in the 90s was way different than the market now. And live service MMOs in the early 2000s is not the same as the rise of F2P games in the modern era. Games like Counter Strike (if that's what you are referring to, I'd prefer if you actually just said the games you're talking about instead of being wishy washy and leaving it to interpretation) may still be popular and enjoyed today but they don't/didn't receive the type of consistent content updates and changes that big live service games do.

In the 90s and the early 2000s, live service games were basically a PC only thing. Consoles didn't have good online infrasture to support these types of experiences until the PS3/360 (see Call of Dutys sales explosion and other titles like Battlefield majorly breaking into the console space. Battlefield had alresdy been big on PC for a long while before this) and the explosion in this model on consoles didn't arrive until the PS4/Xbox One. This is important to note since lots of AAA games in the 360/PS3 era were console facing experiences primarily and this was true early in the PS4/Xbox One era as well.

World of Warcraft at its peak which was Wrath of the Lich King had 12 million monthly subscribers. That was the biggest MMO by far. Fornite in 2024 has 230 million active monthly players. And this is comparing the 2 most popular games at the time. There is no way you can actually be arguing live industry games have always existed in the form being noted now.

No one was arguing that the market hasn't always been fierce. He was explaining how budgeting worked for products before the change in live service game consumption occurred. The whole discussion of his twitter thread was how the change in the market caught many publishers off guard.

But you're not being serious if you are arguing the market before internet was even common on consoles had lots of live service games. To say that having games like Roblox, Warzone, Fortnite, Apex Legends, Valorant, League of Legends have not significantly changed the way consumer distribute their available playtime and spending is horse shit

The premise is not fiction. You're not being real and I'm definitely not getting into it with you if this is how you're going to invent the current market. That is a waste of my time.
 
And then Sony has proclaimed Spider-Man 2, which released exclusively on PlayStation 5, as the fastest-selling PlayStation Studios game in the company's history.

At the same time Final Fantasy XVI, released on the same console during the same year, sold less then Square Enix expected, while Final Fantasy VII Rebirth, released on a bigger userbase in 2024, sold even less.

Userbase is absolutely not a problem today. PS5 is mature enough to have its record-breaking exclusive hits. Problem is in Final Fantasy itself and terrible IP management over the years.

It’s not so much of an install base issue as the fact that their fans are spread out among 5+ platforms and they’re only targeting one of them.
 
And then Sony has proclaimed Spider-Man 2, which released exclusively on PlayStation 5, as the fastest-selling PlayStation Studios game in the company's history.

At the same time Final Fantasy XVI, released on the same console during the same year, sold less then Square Enix expected, while Final Fantasy VII Rebirth, released on a bigger userbase in 2024, sold even less.

Userbase is absolutely not a problem today. PS5 is mature enough to have its record-breaking exclusive hits. Problem is in Final Fantasy itself and terrible IP management over the years.
Square-Enix will never have a "record-breaking exclusive hit" targeting PS5 only, regardless of the game's quality. The market has completely changed. That's why even Sony target PC now. The only difference is that Sony has an internal reason to artificially delay and limit their PC sales (whether we agree on the viability of that strategy or not), but Square-Enix simply has no good reason to do so, because it has repeatedly failed to the point of damaging the sales potential of their flagship brands.

This has nothing to do with Fortnite, Roblox, COD etc either - "Final Fantasy VII Rebirth looks good, but actually Fortnite will do" is not the thought process of an actual human customer, but of someone who has to make excuses about their company's performance. It's like a producer claiming "my superhero movie failed because people are watching daytime soap operas."

Jacob wasn't decrying F2P games, just saying things that we've heard over the past year or two where live service games like Minecraft, Roblox, Fortnite, etc are gobbling up whatever growth there is for the industry. Square Enix made plans a decade ago for XVI and Rebirth prior to this radical shift in consumer attention and spending while also making a bet that the PS5 would follow suit in the PS4's footsteps, people would widely adopt it and also be willing to purchase Final Fantasy games exclusively released on it. Sony themselves released their biggest PS5 games early on with PS4 versions despite the 'we believe in generations' tagline. Miles Morales, Horizon Forbidden West and God of War Ragnarok would have sold a lot worse had they launched exclusively on PS5.
Square-Enix have repeatedly taken money to deliberately stay away from a platform that constantly delivers constant year-on-year user growth (growth which dates back to any decisions around platforms for their most recent flagship games) and constant growth in emerging markets. So Jacob can't complain about opportunities for growth being denied to Square-Enix by Roblox or the latest Vampire Survivors DLC or whatever, when they have deliberately avoided those opportunities in exchange for lump sum payments.
 
And then Sony has proclaimed Spider-Man 2, which released exclusively on PlayStation 5, as the fastest-selling PlayStation Studios game in the company's history.

At the same time Final Fantasy XVI, released on the same console during the same year, sold less then Square Enix expected, while Final Fantasy VII Rebirth, released on a bigger userbase in 2024, sold even less.

Userbase is absolutely not a problem today. PS5 is mature enough to have its record-breaking exclusive hits. Problem is in Final Fantasy itself and terrible IP management over the years.

Not sure if this is a serious post or not. Do you really want me to entertain the notion that Spider-Man and Final Fantasy are equivalent in any way, shape, or form? From public perception, global popularity / brand name recognition, budget, etc?

Square-Enix have repeatedly taken money to deliberately stay away from a platform that constantly delivers constant year-on-year user growth (growth which dates back to any decisions around platforms for their most recent flagship games) and constant growth in emerging markets. So Jacob can't complain about opportunities for growth being denied to Square-Enix by Roblox or the latest Vampire Survivors DLC or whatever, when they have deliberately avoided those opportunities in exchange for lump sum payments.
Not sure what this has to do with anything. Square Enix leadership sucked and the company was successful despite boneheaded decisions. Where is Jacob complaining about anything? He is literally explaining why things are the way they are and how they look at success since he reported to the last two CEOs. He doesn't work there anymore.
 


Many thanks to everyone who shared or retweeted my dive into Square Enix’s financial results. I noticed a few recurring questions that I’ll respond to here.

First, I’ve seen several questions about how to build games cheaper or set budgets based on smaller sales figures.

It’s important to understand that game budgeting is an art rather than a science. I have very rarely seen a game stick to its budget. Through the creative process you may go back into pre-production three times, or throw out entire game directions, or find that the gameplay sucks, or that testing means that you need to completely rewrite the game mode you are working on. This is how games like Helldivers 2 go from an estimated 3 years of development to 7+ years: https://pcgamer.com/games/third-per...araderie-and-compassion-saw-the-team-through/

Linear paths do not exist for game dev. Making a game is not like painting a picture with Bob Ross or like making a movie (which, btw, go well over time and budget all the time).

My old boss, Yoichi Wada, who ran Square Enix for over a decade, used to say that games are the most complex form of mass-consumer software. Most consumer software like Word or Slack can run only on a CPU or even in a browser. Only games require GPUs, a specialized complex piece of hardware, to be able to run. There’s a reason that Apple showed off their iPhone 15 last year by promoting games like Resident Evil and Death Stranding being able to run on them.

(Today, ChatGPT and other LLMs can probably lay claim to being more complex than games (again, in terms of mass consumer software) given that they require huge numbers of even more complex GPUs than consoles run. But the point that I am making is that games are exceptional relative to most other forms of software.)

In sum, games are technically complex pieces of software that, unlike most other software, also require significant investments in story, art, interactive design, and network design. And dev will always go wrong before it goes right.

When a producer comes to you and says “Sorry, this isn’t working, we’re going to need twelve more months to redo then retest half the game” you can’t say, “Sorry you are over budget, ship it as it is” at a publisher like Square Enix. A 10% additional investment in time or budget will be the difference between a 5/10 game and a 9/10 game, and generates millions of units more sold. And there is no world where everything in a creative product always goes the way it is intended.

FF12 and FF15 both had a change of director (Matsuno, Tabata) during development. FF15 famously took a decade to make and started off as an FF13 spinoff. You cannot dictate “devs, be more efficient," you have to be able to know which creatives to give control, when to cut your losses and to have the cash reserves to pivot.

And as technology changes, games tend to change. There are huge technology strides in just two to three years in our industry, forget five years.

The 1990s FF7 had as many myriad things to do as FF16, and also pushed the edge of computer graphics (taking up nearly all of the CGI capacity of Japan at that time, a story its developers loved to repeat to me over drinks.)

FF7 was done faster because the technology was simpler and the bleeding edge of graphics at a far lower fidelity. Engineers have not gotten less skilled, and artists have not gotten worse at their craft in the ensuing decades. Everyone has gotten BETTER. It is the bar that is set higher because of what it takes to achieve fidelity.

To that end, you cannot make an 20 hour, AA Final Fantasy and have it still be Final Fantasy. You can make amazing 100 hour AA game like Octopath, or you can make an incredible 20 hour AAA game like Alan Wake II (which btw did not recoup its dev costs on launch. ( https://gamerant.com/alan-wake-2-sa...ort/#:~:text=Highlights,to break even in 2024 )

But the FF brand is supposed to be a spectacular, 100+ hour AAA journey. That is what the brand means, anything less will get terrible reaction from consumers, so if you want to make cheaper, shorter, lower quality products you need to use a different brand.

Square Enix attempted shorter, lower, cheaper new brands. That is how you got successes like the aforementioned Octopath (though no where near the revenue rate of an FF), and failures like Balan Wonderland, as well as mid-tiers like Foamstars. It’s hard to create new IP, to empower creators, to try new things. Many times there are failures. But we should not accuse Square Enix of not trying; they made many attempts and they should be lauded for all their attempts, and instead they were shamed.

If every game needs to be a 9/10 for you to buy it, the problem is going to be exacerbated. When you purchase 6/10 games or 7/10 games from a new IP, you help a publisher justify its investment into a better version of the next title. But the wallet voting here has been clear: people aren’t buying the 6/10 games, Square Enix shouldn’t try to make smaller, cheaper games unless they're 9/10 quality or greater, and it turns out quality is really expensive, even for a "smaller" game like Alan Wake II.
@stephentotilo put the results of this trend, seen across the industry, succinctly: https://gamefile.news/p/nintendo-microsoft-square-fewer-games

To that end, FF as a brand cannot simply get smaller, be made better, be made cheaper, and still be FF. And frankly speaking, the lesson from my prior thread isn’t being learned in responses that say FF specifically should be smaller or cheaper.

Cost is not the problem, sale price and market size are the problem. We need to admit that a larger portion of players today prefer service games and are voting with their wallets and time, playing titles like Genshin Impact instead.

It is plausible that if Sony released the numbers publicly, the lifetime revenue of Fortnite, WarZone and GTA5’s online mode on PS5 would dwarf the combined totals of the titles after them. Today, even first party titles like The Last Of Us are fodder to get you to buy a PS5 so that your service game of choice is played on a PS instead of an Xbox. Fixed-price AAA titles that don’t belong to the platform holder are going to be for smaller audiences and for those niche audiences to get the same level of quality they need to justify the purchase, prices for third party publishers will have to go up.

We also should not expect publicly traded AAA publishers to become AA publishers. Square Enix’s efforts with Balan were to build new IP but these new IP were never being counted on to be the main driver of returns because new IP and lower price point titles can’t incrementally move the needle enough for a company at Square Enix's size. They were seeds for the future that failed to bloom.

Public game publishers will thus continue to place their main bets on the side of the market they can influence the most (AAA) while gamers should look to Indies and smaller publishers for their AA hits because expectations from consumers and investors are different between the two. (The real puzzle to me, which I hinted at in the previous thread, is why someone other than SQEX made Genshin Impact; that should have been their market to capture. Expect creating a similar title to be a major focus the next few years.)

So I return to, the problem is that FF brand was not selling to what the product’s budget needed it to be. Part of this is going to be resolved by going multiplatform. And part of the problem is simply greater competition that isn’t recoverable from. Today, FF14 and F2P mobile titles are subsidizing the fixed price titles, further indicating where consumers are willing to spend the most time and money within the SQEX family of titles.

Next, a recurring theme that I saw in discourse on the prior thread was with regard to games being art and capitalism. I’ll note that the context of the original thread was statements made by Square Enix (a publicly traded company) on their annual financial results.

A public company, unless its mission statement is otherwise, has a fiduciary duty to its shareholders. This includes Japanese firms. There was a time where some Japanese public companies cared less about share price in the name of employment but the lifetime employment system broke down after the bubble collapsed in the 1990s.

Square Enix’s shareholders include Enix founder Fukushima-san, several major Japanese banks, Vanguard (my own company’s 401k), JP Morgan Chase, and the Public Investment Fund (PIF) of Saudi Arabia and many more. (PIF has a large enough holding to have board representation: https://hd.square-enix.com/eng/company/officer.html )

When a bank like JP Morgan gives you interest on your savings account, it does so from the profits it receives by holding shares in companies like Square Enix. Similarly, when Japanese banks invest into Square Enix they do so with the deposits of their customers. Financial systems are deeply intertwined.

It is the responsibility of the company to generate the best return it can in order to fulfill its obligations to its shareholders. By definition, many companies will not surpass the average rate of return of the stock market. And by definition, many companies do surpass. The better the company performs, the higher its shares go, the more it can afford to reinvest.

If a public company intentionally set its budgets to underperform stock market returns, it would have a harder time raising money, servicing debt, and in turn, sustaining its employees. This does not mean that the company will hit its financial goals, but it does mean that in general public companies must seek better returns (the company may alternatively focus on growth, or dividends or other financial goals as fits the business and its sector).

Additionally, shareholders elect board members who control the budgets and can hire and fire the CEO. In other words, the CEO of Square Enix reports to its board, who reports to its shareholders, who seek greater returns on investment. This is the case for many public companies without alternative mission statements.

That does not mean that their games aren’t art, or creativity aren’t important to their businesses. It does mean that public companies, be it Electronic Arts, Take-2, Capcom, Nexon or otherwise generally build games to generate returns on investment. (Note that beating the stock market on a per-dollar basis was only an example of a way to determine a baseline, conservative return on investment. In fact most times the return on investment for a publisher like a Take-2 needs to be substantially higher than just stock market return baselines.)

There are of course non-public game publishers. Valve is one. Epic is another. You also have studios like Larian which have been able to remain independent. These companies can determine what’s important for their returns their own way without the same pressures of public companies. They produce a lot of amazing products. Public companies cannot behave the same way as private companies.

The resulting industry:

1. Publicly traded AAA game publishers will focus on fewer titles, with a combination of live service (microtransaction; e.g. an FF version of Genshin) and a higher price point fixed-price (CoD, GTA, FF) in the $70-$150 range
2. The mid-tier is the domain of independent developers and smaller publishers at the $30-$60 price point
3. Live service titles will increasingly platform-tize and offer UGC tools (expect this to be a big part of GTA)
 
It doesn't take a genius to figure out that multiplatform releases will make more money for AAA titles, it's understandable that consumers have a preference of their ideal platform, but for major video game publishers to simply choose to limit their game's sales potential and make less money for some weird reason is beyond stupid.

If games like Monster Hunter, Resident Evil and Souls were successful in this modern era, why couldn't FF replicate their success? The answer is the exclusive deal they signed with PlayStation, not the Live Service game nonsense they had to compete against.

Whoever made the decision to release FFXVI and Rebirth exclusively on a single console deserve to be sacked.
 
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He's creating a false dichotomy between AA and AAA here. You could cut the budget of a AAA game a lot before it drops to the level of an AA game. We saw that demonstrated with the Insomniac hack where if you were to take Spider-man 2 and cut it's budget by 2/3 you would be left with the budget of... Spider-man.

In the same vein if FFXVI and FFVII Rebirth were developed as cross-gen PS4 games rather than high-end PS5 games they would still be AAA games, but presumably with smaller scope, lower budget and greater reach.
 

There's so much wrong with what he says here, again talking about all sorts of reasons EXCEPT the ones that truly matter for FF's decline.

Just came back from the eye doctor, will write more later ;o
 
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