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Square Enix: "We always look out for new IP"

President Yosuke Matsuda on Avengers, Final Fantasy VII, game streaming and its commitment to new projects

2020 is shaping up to be a big year for Square Enix. In fact, just ten weeks separate two of its biggest ever releases: Final Fantasy VII: Remake and Marvel's Avengers.

One is probably the most anticipated Final Fantasy game, arriving almost five years since it was first announced to rapturous scenes at E3. And the other is a project that's bigger than anything Square Enix's Western studios have attempted before. "We want it to be a big year," laughs Square Enix president Yosuke Matsuda.

Final Fantasy VII: Remake is expected to deliver the level of commercial success that a traditional numbered Final Fantasy title would deliver, if not more. Indeed, Matsuda tells us that it would be "difficult to rank" the remake versus a more traditional Final Fantasy XVI

Marvel's Avengers is a significant project, too. Crystal Dynamics, the developer best know for the modern Tomb Raider franchise, has already described it as the biggest title it's ever worked on. There are five different studios working on the game, but Matsuda dismisses concerns of over-spending. Indeed, he suggests that this is just how modern AAA games are made.

Square Enix head Yosuke Matsuda

"The lead studio on the project is Crystal Dynamics, and Eidos Montreal is supporting them, and there's support from [Netherlands studio] Nixxes, and they're interacting with each other in a variety of different ways," he explains. "But, when you talk about blockbuster or AAA titles these days -- in general -- you'll find your resources are too limited if you try to develop them only at a single studio. For that reason, a variety of studios are collaborating with one another.

"Even if you look at our Final Fantasy games, it's not just our Japan team that's working on that, but they're collaborating with a variety of external organisations as well. And so, if you think of Avengers as a AAA, blockbuster title, then I would say that the investment in it is not out of line with that type of game. It's nothing special in that respect."

Square Enix has high hopes for Marvel's Avengers. Although the game didn't completely wow the crowds at E3 2019, neither did Insomniac's Spider-Man (the previous project in this new video game push for Marvel) when it first debuted at E3 2016. And that PlayStation 4 exclusive went on to deliver huge critical and commercial success. Indeed, Matsuda says that Spider-Man's popularity has raised his hopes for The Avengers.

"Spider-Man was a huge title and a major success, so we would like to work hard to have that kind of success," he says. "So I guess it did increase my expectations [for Avengers]. I do believe you have to have high goals. I thought that Spider-Man was fantastic, but we don't want to be bested by them. We are working very hard on the development effort right now, so that we are able to provide a new experience."

"We thought that by doing [Avengers] it would give us experiences that we could then leverage moving forward when making other new titles"

Moving into developing a AAA licensed game could be seen as a bit of a step back for Square Enix's Western ambitions. At one stage, the firm was proudly investing big sums in its owned Western IP -- namely Tomb Raider, Hitman and Deus Ex.

The commercial success of these titles has been mixed, with the latter two in particular failing to deliver the numbers the company expected. Yet Marvel's Avengers isn't a sign of the publisher moving into safer, more bankable territory. Indeed, Matsuda says that Square Enix is using this opportunity to create new experiences it hasn't done before, and then take them forward into future projects.

"Regardless of whether it is a licence or a new IP, it's always both challenging and fulfilling to try to create new forms of expression and new experiences," he tells us. "It doesn't have to be a licensing arrangement, but this time with Marvel we decided we were going to produce a new Avengers experience that was going to be completely separate to the very famous cinematic universe. We saw this as a considerable challenge, and we thought that by doing that, it would give us experiences that we could then leverage moving forward when making other new titles."

The Avengers, Final Fantasy VII: Remake and a whole heap of re-releases may have dominated Square Enix's E3 showing, but to suggest the company is resting on licensed IP and classic brands would be doing the firm a disservice. Indeed, hidden behind the big names were a few new concepts, too.

Square Enix revealed Outriders at E3

Square Enix Collective revealed the indie project Circuit Superstars (by Vancouver-based Original Fire Games), there's the internally created RPG Oninaki, while the publisher has also teamed up with AAA polish studio People Can Fly on a new project, Outriders.

"We are always on the look out for new IP," Matsuda explains. "[With Outriders] we spoke with the producers on the ground there, and we decided that they were interesting and we should try and make this new shooter game with People Can Fly."

He continues: "There are a variety of different ways of going about [working with external teams], including acquisitions. But when making something new, who you work with, the team that you work with, is very important. So forming partnerships is a key way of going about that.

"And there are other methods as well, including investing in other organisations. For example, in the West we did invest in Bulkhead Interactive, and they have realised Battalion 1944. We have a minority stake in that. But there is a variety of different possibilities. We want to think flexibly about these opportunities. But the point is working with good teams and excellent talent."

"For people who are already playing games on consoles or PCs, I think it will be unlikely for them to suddenly switch over to the cloud streaming environment"

Square Enix has a lot of product coming up, so perhaps it's unsurprising that Matsuda and his team are considering a move into subscriptions, and developing the kind-of service that Xbox, EA and Ubisoft are currently working on.

It's not just subscriptions that have caught the company's eye, either. Game streaming is something that the firm is interested in. Indeed, Marvel's Avengers was announced for Google Stadia, with Phil Harrison among the attendees at Square Enix's E3 press conference.

"Google has Stadia and Microsoft has xCloud, and I am very much interested in the fact that these major players are getting into the game streaming space, because I think that these new platforms offer significant potential to reach new customers," Matsuda says firmly. "I am very much hoping that cloud streaming gets off the ground successfully... Because this will be so highly reliant on internet infrastructure, I don't think it will necessarily take off right away.

"For people who are already playing games on consoles or PCs, I think it will be unlikely for them to suddenly switch over to the cloud streaming environment. I say that because the consoles and the PCs right now offer a very stable and great environment in which to play games, so for that reason, with the services that are just launching and there being a lack of clarity on what the gameplay experience is going to be like, I just think it is unlikely that these people are suddenly going to switch over to the cloud.

"But, at the same time, I think there is a lot of people around the world who might not own a console or a PC, but are still interested in these games. There are a lot of people who are watching the gameplay on Twitch and YouTube. When you think about how many people who are watching these games being streamed, you realise that there are probably a lot of people out there who might not be willing to invest upfront in a console, but they still want to play these games.

"If you have a way to drive those people who are watching gameplay on YouTube to a place where they can buy the games, then I think that will give you access to a certain new customer base. Because they do not own consoles or gaming PCs, they are potential customers that we've been unable to reach, but now we might be able to."

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Christopher Dring avatar
Christopher Dring: Chris is a 17-year media veteran specialising in the business of video games. And, erm, Doctor Who
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