Square Enix eyes potential of XR, blockchain, and cloud gaming in 2020

A New Year’s letter from Square Enix president Yosuke Matsuda outlines the trends the company expects to play a part in 2020, noting some particular developments it is keeping a watchful eye in the new year. In that letter, he notes that 2020 is particularly interesting thanks to both the rise of multiple cloud-based game platforms and the looming PlayStation and Xbox console launches expected at year-end.

On the game streaming front, Square Enix already has a handful of cloud-focused titles in the works. Matsuda says the setup’s unique offerings pave the way for games that “would have been impossible on traditional game consoles,” and that such titles will be key to the adoption of cloud platforms as a whole.

“From a game development perspective as well, we will strive to create gaming experiences only possible in the cloud, meaning developing cloud-native or cloud-centric games. For cloud streaming to enjoy mass adoption, there will need to be innovation not only in terms of distribution, but also in terms of gaming experiences,” says Matsuda.

“We naturally face a mountain of challenges, including technological hurdles that must be overcome and issues with telecommunications costs,” he writes. “However, we have no doubt that cloud gaming will represent a major trend over the next five years as we enter the age of 5G and that our strategies for flexibly responding to that trend will be key.”

For Square Enix, the rise of cloud gaming means the shift from physical to digital sales will accelerate, and that those platforms are likely to usher in a larger shift in industry-wide business models through a stronger focus on subscriptions. Matsuda also notes that cloud gaming can help the company reach wider audiences in regions where physical game consoles haven’t quite taken off like India and South America.

The full letter mentions some of the other emerging tech Matsuda says Square Enix is keeping in its crosshairs as 2020 kicks off. XR is a field Square Enix has already included in its R&D plans, and with devices like AR devices on the horizon the company plans to continue those efforts and potentially detail its steps later in the year.

Blockchain is also a technology on Square Enix’s mind, with Matsuda noting that the company plans to explore the tech in a more meaningful way.

“Rather than treating blockchain gaming as an opportunity for speculative investment, we believe establishing whether it is capable of bringing something new to our customers’ gaming experiences will be the key to growth,” he explains.