Close
Are you sure? Are you sure you want to report this comment? I understand, report it. Cancel

Square Enix president describes "urgent" need for reform

Square Enix president describes "urgent" need for reform

Mon 07 Oct 2013 8:48am GMT / 4:48am EDT / 1:48am PDT
PublishingDevelopment

Yosuke Matsuda will put customer interaction and regular content drops at the core of the company

Yosuke Matsuda, the man who replaced Yoichi Wada as president of Square Enix, has outlined the "urgent" changes the company must make in order to remain competitive.

In an interview with Infoseek, translated by Siliconera, Matsuda attributed the problems Square Enix now faces to the changes in the games industry's prevalent business model - from a 'price x units sold' model, to one where development and sales are more fluid.

"Development and and sales were divided, and the game developers only needed to concentrate on their work. That's where the strengths of our company laid within," he said.

"It is necessary for us to set up a system that allows us to meet the demands of our customers in a more timely manner. We can't just have a year of leniency. We must reform with urgency"

"Past gaming generation changes took roughly three to five years. Nowadays, released titles are updated every day, and it only takes about three months for a situation to completely change. In order to react with such speed, it is urgent for development and sales to be unified as one."

Matsuda, who pledged to overhaul Square Enix's operations when he stepped up as president, emphasised the importance of "personality" to the core of a modern games business. Developers no longer have the luxury of being cloistered away from the public as they diligently work on a new project. Content must now be created on a more consistent basis, a should be accompanied by direct interaction with the audience.

"An especially important index is 'asset-turnover ratio'," Matsuda said. "When making something, developers want to spend more time and money. However, that can be related to lowering the asset-turnover ratio, so the key point is to find a good balance.

"In fact, one of the factors of the final deficit is the delay from the development to release. Such time-lag means a decrease of contact frequency with the players. It is necessary for us to set up a system that allows us to meet the demands of our customers in a more timely manner.

"We can't just have a year of leniency. We must reform with urgency."

Yoichi Wada stepped down after more than a decade as president of Square Enix following a string of commercially disappointing releases. The company lost more than $130 million in the last fiscal year, with multi-million selling titles like Tomb Raider, Hitman: Absolution and Sleeping Dogs all failing to meet its internal sales expectations.

In addition to financial and logistical concerns, Square Enix has also lost a number of key employees in the last few months. Stephane D'Astous resigned as general manager of Eidos Montreal - the Square Enix's most prominent AAA studio - in July, citing a, "lack of leadership, lack of courage and [a] lack of communication," in the aftermath of the company's disastrous fiscal year results.

"I wasn't able to conduct my job correctly," D'Astous said at the time. "I realised that our differences were irreconcilable, and that the best decision was unfortunately to part ways."

More recently, Eidos life president Ian Livingstone left the company after more than 20 years and, last week, Square Enix lost its influential technical director, Julien Merceron, to Konami.

9 Comments

Nicholas Pantazis
Senior Editor

968 1,161 1.2
Popular Comment
A translation of this translation is: Faster turnover on titles (less development time = smaller games and likely worse games), more DLC (Square Enix doesn't feel like they are monetizing you enough), and developing games around business models rather than the other way around.

So, yeah, that will surely improve Square Enix's "relationship with consumers." Wrong path guys. Pay more attention to the games lighting up the charts. It's the Skyrims and GTAVs, the games that get long dev cycles and genuine effort. Brand devaluation is a real thing. Just ask Activision if Call of Duty is as valuable today as it was in 2010 and 2011. Ask Nintendo if having too many Mario titles clustered together in a short time last year damaged sales (spoilers: It did, and could even be blamed for devaluing NSMBU as a system seller for the Wii U's launch).

Gamers want games to feel special. They want a launch of a new title to be an event. If you don't want them picking up your title used or in a bargain bin 6 months after launch, make it something that everyone NEEDS to play right now. Square's losses are certainly in large part due to quality problems with FFXIII. Why would you continue that franchise when people were clearly dissatisfied with it? And now they're releasing a THIRD game in a series gamers have already rejected.

Honestly there is just so much wrong here I could talk about it forever. Square Enix has a long way to go for a turnaround, and this doesn't sound remotely like the right direction.

Posted:6 months ago

#1

Steven Hodgson
Programmer

77 111 1.4
Faster turnover on titles (less development time = smaller games and likely worse games)
Hard to imagine anything worse than Final Fantasy 13, oh wait, they made a sequel didn't they

Posted:6 months ago

#2

Tim Spencer
Designer

11 6 0.5
Hire some western design directors to work over the FF series. The art/style/story/core mechanics teams will be fine, but that IP definitely needs some better steering at the high level... and yes, I'm one of those people who hasn't seen an appealing FF since 7 (9 at a push).

Posted:6 months ago

#3

Nicholas Lovell
Founder

179 120 0.7
I'm not sure I agree, Nicholas P. Or at least, the level of risk in the Skyrim's and GTAs is incredibly dangerous. That's punts that cost in the tens or hundreds of millions of dollars. Tomb Raider tried that approach and even with (IIRC) 3.6 million units, it wasn't enough.

the reason the console market is in trouble is, amongst other reasons, that the big are getting bigger and few people can take the seriously big bets needed to compete. Sure, you can point at Call of Duty, Skyrim and GTA. Or you can point at The Old Republic or the fate of THQ to see the dangers of focusing in the direction you are saying.

Posted:6 months ago

#4

Morville O'Driscoll
Games Blogger & Journalist

1,374 1,021 0.7
I think part of their problem is misjudging the audience, and audience numbers. Obviously the Sleeping Dogs/Tomb Raider estimated sales were ridiculous, but just as bad is surely the pursuit of a certain sub-section of Final Fantasy fans at the expense of JRPG fans in general. As an example, look at the milking-dry of the FF7 fanbase - multiple games, with an animated film, all based on a single entry in a series that produces emotions at both ends of the spectrum (love or loathe). Yet, whilst money is spent on that, it's not being spent on other things. Square alone has an abundance of IP (with fans) which appears to just be ignored.

Another example, non-JRPG based. The advance-word on the new Thief is abysmal. Truly dire. It appears to be shaping-up to be something that isn't like any of the previous Thief games. So, the company is misjudging its audience (and the fanbase of the Thief franchise). Whilst it may pan-out for them, it's a very risky move to move so far-away from the basic concepts that the original audience appreciated.

Edited 1 times. Last edit by Morville O'Driscoll on 7th October 2013 5:20pm

Posted:6 months ago

#5

Adam Campbell
Associate Producer

1,118 888 0.8
Square-Enix do require reform.

If they brush up on technology, team sizes, efficiency and other practices, I expect more regular, high quality content with a lower and less complex overall development cost.

Posted:6 months ago

#6

Matthew Sainsbury
Journalist

7 17 2.4
Square Enix should stop trying to sell to a western audience, and should certainly not be hiring western developer leads or outsourcing game development to western teams.

The Japanese developers that are doing well right now are the ones making games for the Japanese, and if it happens to go down well in the west, that's a bonus. The Tecmo Koeis, Nippon Ichis and Namco Bandais aren't nearly as concerned with American sales figures as Square Enix, and this works to their benefit.

It is a source of never ending bemusement to me that there are so many people in America and Europe that seem to think Japanese companies owe them good games. No. Where Square Enix and others (Konami, Capcom) have gone wrong is that they have forgotten that they do actually owe Japanese consumers stuff they want to play.

Posted:6 months ago

#7

Paul Jace
Merchandiser

768 1,001 1.3
@Nicholas--
Just ask Activision if Call of Duty is as valuable today as it was in 2010 and 2011
I'd say it's still just as valuable today(if not more so) as it was back then. GTAV is breaking all the current records but out of those two series COD makes more because of it's annual release schedule. You'd be hard pressed to find a single publisher that didn't want to own the COD series as it is one of the most successful, valuable, mainstream video game series of all time and I don't see it slowing up to "only" selling 15 million units or less per iteration anytime soon.

@Matthew--
Where Square Enix and others (Konami, Capcom) have gone wrong is that they have forgotten that they do actually owe Japanese consumers stuff they want to play.
From a business perspective all of those Japanese companies want to make as much money as possible in order to, well, stay in business. And because the Western video game market is several times the size of the Japanese market, the Japanese companies see the benefit in targeting a good portion of those Western sales. They still make games targeted specifically for their Japanese audiences but for the larger IP's they seem to be going after the international market much more fiercely than they have during previous gens.

Posted:6 months ago

#8

Kingman Cheng
Illustrator and Animator

929 150 0.2
I'm with Morville on this one, they don't seem to know their audience anymore. Pumping a tonne of money into development does not mean a completely relative increase of sales.
"Development and and sales were divided, and the game developers only needed to concentrate on their work. That's where the strengths of our company laid within,"
They keep rattling on about development to sales ratios and didn't talk about their audience really, you should focus more on the people who buy from you not just the people who work for you.

Posted:6 months ago

#9

Login or register to post

Take part in the GamesIndustry community

Register now