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Square Enix’s New Year’s Letter Is Mostly About NFTs, Again – Forbes

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Final Fantasy XVI

Square Enix

One year after releasing a letter that was roundly mocked for being focused on web3, the blockchain and NFTs, Square Enix president Yosuke Matsuda has once again released a New Year’s letter…focused on web3, the blockchain and NFTs.

It’s a baffling sign that despite the industry roundly rejecting the concept of NFTs throughout the past two years, causing even early evangelists like Ubisoft and EA to flee from the concept, Square Enix stands alone in still trying to make this happen.

To be clear, Matsuda’s NFT references are not just passing asides, in this letter, they make up almost half of the entire thing. The 1525 word letter has 655 words devoted to web3 and NFTs, with Matsuda waving away the collapse of the NFT market this past year by calling it “volatility.”

“New technologies and frameworks lead to innovation, but they also create considerable confusion. Having ridden out such societal tides, some such technologies and frameworks gradually become part of people’s lives, eventually giving rise to new businesses and growth. Following the excitement and exhilaration that surrounded NFTs and the metaverse in 2021, 2022 was a year of great volatility in the blockchain-related space. However, if this proves to have been a step in a process that leads to the creation of rules and a more transparent business environment, it will definitely have been for the good of the growth of blockchain entertainment.


Keeping a steady eye on these environmental changes while considering from a higher-level perspective what Web 3.0 and blockchain entertainment are actually all about presents a different vista than if we focus on them solely in technological or speculative investment terms. As I said in last year’s New Year’s letter, if we consider traditional gaming to have been centralized, then blockchain gaming must operate based on a self-sustaining decentralized model. It is that concept, that philosophy that I see to be key.”

It’s the old “people don’t hate NFTs in games, they just don’t understand them,” philosophy that Ubisoft once used before gamers rejected their forays into web3 so roundly they don’t even talk about it any more.

The reason for this focus is because Matsuda reiterates that Square Enix has multiple blockchain games in development, and will be starting up even more this year. He hopes “blockchain games will transition to a new stage of growth in 2023.”

It’s honestly astonishing. It’s true, web3, crypto, the blockchain and NFTs are not dead as a concept despite recent declines, but in terms of their integration in video games, it’s been nothing short of disaster after disaster. Anything even tangentially related to NFTs from traditional publishers has been roasted so hard it’s made these companies feel like they’ve touched hot stoves. In the wider NFT game space, we saw the utter collapse of the game that was held up as a paragon of the potential of web3 gaming, Axie Infinity. Square Enix is living in a fantasy world where none of this seems to have happened, and believes it’s definitely a great idea to throw lots of money down this hole while selling off studios like Eidos and Crystal Dynamics which made actual video games.

Good luck, Matsuda, you’re going to need it.

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