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Square Enix president believes NFTs and blockchain tech will be a "major trend" this year

Share prices grow despite backlash.

Square Enix president Yosuke Matsuda has published a letter in which he expresses hope that NFTs and blockchain technology will become a "major trend" in gaming.

In a New Year's letter, Matsuda expressed what he believes will be major areas of growth for the industry in 2022, including cloud gaming, AI, and blockchain games.

The latter "are built upon the premise of a token economy and therefore hold the potential to enable self-sustaining game growth," said Matsuda.

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"NFTs were met with a great deal of enthusiasm by a rapidly expanding user base. However, we do observe examples here and there of overheated trading in NFT-based digital goods with somewhat speculative overtones, regardless of the observed value of the content provided."

The idea of NFTs in games has generally been met negatively by many players, despite developer enthusiasm to integrate the technology. Following the letter's publication, Square Enix share prices rose eight percent, according to Bloomberg.

In his letter, Matsuda wrote of a distinction between those who "play to have fun" and those who "play to contribute".

"I realise that some people who 'play to have fun' and who currently form the majority of players have voiced their reservations toward these new trends, and understandably so," he says.

In his view, however, NFTs will incentivise contributions and inspire more user-generated content in games.

"I believe that this will lead to more people devoting themselves to such efforts and to greater possibilities of games growing in exciting ways. From having fun to earning to contributing, a wide variety of motivations will inspire people to engage with games and connect with one another. It is blockchain-based tokens that will enable this.

"By designing viable token economies into our games, we will enable self-sustaining game growth. It is precisely this sort of ecosystem that lies at the heart of what I refer to as 'decentralized gaming,' and I hope that this becomes a major trend in gaming going forward."

As such, the Square Enix portfolio of games will consist of both "centralised" and "de-centralised" games as a "major strategic theme for us starting in 2022".

"The basic and elemental technologies to enable blockchain games already exist, and there has been an increase in the societal literacy and acceptance of crypto assets in the past few years," he says. "We will keep a close eye on societal shifts in this space while listening to the many groups of users that populate it, and ramp up our efforts to develop a business accordingly, with an eye to potentially issuing our own tokens in the future."

Elsewhere, Square Enix established a new AI division in March 2020, with a focus on "natural language processing, world models, and simulation technology". The aim is to enhance the company's games and share the technology with third-parties.

Cloud technology will allow Square Enix to distribute their games more widely and develop new types of content. "Leveraging cloud technologies is extremely effective as a means of making our content and services uniformly available and as a catalyst for creating new forms of excitement that expand upon the content development capabilities for which we are known," Matsuda said.

It's unknown exactly how NFTs and blockchain technology may be used in forthcoming Square Enix titles, but the news has been received negatively by fans at large.

This follows similar cynicism from players against Ubisoft's Quartz platform and other uses of NFTs in gaming.