Japanese video game company Square Enix has taken a bold step towards adopting blockchain-based games. The company has signed an agreement to sell some of its game development studios and intellectual property (IP) to fund new investments in blockchain, AI and cloud services.
The deal was struck with Swedish game company Embracer, which is paying Square Enix $300 million. Square Enix will divest two of its North American-based studios, Crystal Dynamics and Eidos Interactive, as well as several popular game series, including Tomb Raider, Deus Ex, Thief, Legacy of Kain and more than 50 back-catalog games.
In a letter, Square Enix President Yosuke Matsuda said the move would help the company change its global business environment. It will also strengthen the company’s core business in digital entertainment. But above all, it allows the launch of its investment in the fields of blockchain, AI and the cloud.
“…the transaction enables the launch of new businesses by continuing investments in areas such as blockchain, AI and cloud,” Matsuda said.
Under the deal, which is expected to close between July and September 2022, Embracer will increase its staff by more than 1,100 people, the company revealed. The agreement also includes the recently announced installation of grave robber, a game that has sold over 88 million copies.
Meanwhile, Square Enix has long aimed to develop play-to-earn games backed by NFTs and blockchain technology. In an interview with Yahoo Japan earlier this month, Matsuda said focusing on traditional games wouldn’t be enough for the company as player interest shifted.
“If, instead of relying on goodwill, we can also provide incentives to those who contribute to development using technologies such as blockchain, it is possible that innovative and interesting content can be created from the ideas of people. users,” he said.
Gaming industry still opposes NFT-powered play-to-win model
Experts have predicted that the gambling industry will be dominated by gambling in the future. Alexis Ohanian, the co-founder of Reddit, said he thinks more people will be looking to get paid to spend time playing games over the next five years.
Similar to Square Enix, game companies like Electronic Arts are also paying attention to the model. However, the model was seriously rejected by some factions of gamers and game developers.
Bloomberg reported that Minecraft players and some developers have backed down on the company’s plans to integrate NFTs. The developers cite the environmental impact issues of blockchain technology.
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