According to a recent financial report published by Square Enix, the publisher has concerns that the West’s console market is too difficult to break into.
According to the document “Consolidated Financial Results for the Six-Month Period Ended September 30, 2016,” Square Enix demonstrated an overall strong showing on the stock market thanks to their recent titles, but the Japanese publisher is still concerned about the direction console gaming is heading in the West. As they note under “Qualitative information on consolidated business forecasts,” the company believes the “business environment surrounding the Group is in the midst of major changes, where consumer needs for content suitable to smart devices such as smartphones and tablet PCs are rapidly expanding, while the console game markets in North America and Europe are increasingly getting competitive and oligopolistic.”
Instead, Square Enix looks to a more flexible business model for their ventures. “The Group is focusing all efforts to achieve growth coupled with profits on a solid revenue foundation through introduction of flexible content development conforming to the ever-changing environment as well as diversification of profit opportunities,” the report notes. In other words, Square Exnis is looking into diversifying their content for “the ever-changing environment,” which most likely means focusing on “content suitable to smart devices such as smartphones and tablet PCs.”
The report, which was later posted on NeoGAF, left many Square Enix fans worried about the company’s future. However, the corporate wording doesn’t suggest that Square Enix is pulling out of the console market any time soon. Rather, they’re looking to new platforms, such as mobile. This falls in line with Nintendo and Ubisoft’s recent moves towards smartphone gaming.
Square Enix’s catalogue as a publisher has only grown in recent years. Releasing such highly acclaimed games as Life is Strange, Deus Ex: Mankind Divided and Rise of the Tomb Raider, one would expect the Japanese publisher would see high returns from Western players. Time will tell how Square Enix’s business model changes.