Square Enix gets serious

TOKYO--Square Enix is taking a step out of the entertainment business. Today, the company held a press conference with textbook publisher Gakken to announce the establishment of a joint subsidiary on May 1. Dubbed SG Lab, the company will specialize in the development and distribution of what's generally known as "serious games," interactive programs designed to train or educate users. Aside from creating serious games for educational facilities, SG Lab will also make them for public facilities, industries, and professional training purposes.

Square Enix is the first major Japanese publisher to announce its entrance into the serious games market. While still growing, the market has traditionally been much stronger in North America, where there's already a Serious Games Summit established as an annual event.

SG Lab will start off with a capital fund of 10 million yen (approximately $100,000), of which 60 percent is from Square Enix and 40 percent is from Gakken. SG Lab doesn't have any projects underway yet, and it will start off its business by accepting orders for custom-designed software.

During the press conference, Square Enix president Yoichi Wada explained that the serious-games market is a great business opportunity because of its potential audience, which would cover both genders and range from children to seniors. But in entering the market, Square Enix needed a business partner with a knowledge base vastly different from its own. Thus, the company teamed up with Gakken, which also sees Square Enix as its best-fit partner. The textbook company has a long history in creating educational aids but doesn't have much experience working with technology or creating software.