Square Enix Talks About Embracing "Games As A Service" Model

Back in May, Square Enix management said the video game industry is heading towards the "games as a service" model, at the time stating that the Final Fantasy publisher "will approach game design with a mind to generate recurring revenue streams." Now, Square Enix president Yousuke Matsuda has doubled down on those comments, saying in a new note to shareholders that the games as a service model is the way forward.

"Gone are the days in which single-player games were of primary status and multiplayer games secondary," Matsuda said (via @Nibellion). "Lately, multiplayer games have taken the lead, and it is standard for games to be designed for long-term play."

Games as a service is not a new concept, and it's a term that is defined differently depending on which company you're looking at. For Square Enix, games as a service means a game that "place[s] a strong emphasis on longer-term user engagement."

Square Enix will continue to make games that fit this description. The idea is to make games that people play for a long time instead of completing them quickly and moving on. "In so doing, we will increase customer satisfaction and enhance the lifetime value of the games themselves," Matsuda said.

One of Square Enix's biggest recent games, Final Fantasy XV, is adding online multiplayer through an expansion coming up soon. And just this week, the company announced a brand-new shooter called Left Alive, which we wouldn't be surprised to learn has a significant online element. The games as a service model makes business sense, as a publisher can continue to sell the game and its related content over time. And provided that content is compelling enough, it can be a good thing for gamers.

Also in the note to investors, Matsuda spoke about the growing importance of gameplay streaming. Square Enix is looking into how it can turn this into a business to create another form of revenue.

"An increasing number of our customers around the world enjoy not only playing games themselves, but also watching other gamers play them. You do not actually need to play a game yourself to enjoy it," Matsuda said. "Watching the advanced techniques of professional gamers and the unique broadcasts of game streamers is another way to enjoy games. Watching gaming is growing into a major form of entertainment thanks to considerable advances in the online streaming environment. It is the presence of e-sports spectators that make this meaningful."

"Once the size of gaming spectatorship grows, gaming itself will gain value as a form of media. This conversion of gaming into a form of media is proceeding rapidly. We also have a great deal of interest in this field and intend to proactively work to turn it into an actual business."

You can read Matsuda's full note to investors here.