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An analysis of the global decline of Japanese console development Part 3

In the third part of the series we take a look at Square-Enix and their strategic stance on current generation home console development.

In the second part of this series the corporate strategies of Konami and Capcom were discussed, concentrating on how they differ now from what they were 10 years ago and how this difference has effected the global presence of each company. In this part a continued look will be taken at the strategies of interest being used by the next of the former triumvirate of Japanese giants, Square-Enix.




Square and Enix have been and continue to be some of the most important players in the Japanese industry since the 1980’s. This they have each achieved by virtue of being the twin crowned rulers of the most favoured game genre in their domestic region, that of the RPG.

Each have had their own evergreen main franchise in that popular genre, that of Final Fantasy, and Dragon Quest. But what overwhelming domestic presence they each enjoyed only one of the two was able to successfully project across all regions. At the advent of the 32bit era Square chose to divorce itself from their former platform of choice, that of Nintendo, and instead chose SONY’s new console platform contender, the PlayStation, as the future host of their golden goose Final Fantasy franchise.

That proved to be a most fortuitous move by way of Final Fantasy VII becoming not only a domestic phenomenon, but equally so on an international level. Before Final Fantasy VII the genre had enjoyed somewhat of a niche interest overseas, thus Final Fantasy VII served as the first introduction to the genre for many western players, and subsequently it is remembered fondly by many to this day.

Square managed to maintain this global momentum which they had generated by continuing to put out new installments in the main FF series at a steady pace. Meanwhile they also displayed great interest in branching outside of the Dragon Quest template for RPG’s with experimental concepts such as Parasite Eve and Vagrant Story.

One could feel a clear presence of a pioneering spirit at work within Square. This was reflected not only in their more experimental efforts, but also in the many installments in their main franchise series. While main Final Fantasy titles did not deviate much from the Dragon Quest template Square nevertheless tried to push the boundaries by taking certain mechanics in each installment for a spin, and the mechanic most subjected to this process was the core fighting mechanic.

While the Dragon Quest traditionally had, and continues to revel in the familiar, never deviating much from the rigid formula settled upon in the 80’s Final Fantasy was not afraid to change things around with each installment, sometimes to the applause and other times at the scorn of fans.

One rising trend having come to be and in part largely responsible for the success, domestic and otherwise, of Final Fantasy VIII was a heavy use of FMV sequences for spectacle as well as a storytelling crutch in the title.

In the late 90’s use of lengthy FMV sequence in games were still a novel concept to gamers and they were accepting of it. This had lead to Square making heavier use of it with each new installment in the series after the success of FFVII. Thus they had gained much experience with computer animation and felt they were ready to put those acquired skills to a good use by way of a feature length animated film.

This was to be the directorial debut of Hironobu Sakaguchi, the creator of the Final Fantasy series. This film project proved to put a majour drain of resources on Square, with a production cost of over 130 million, of which it only made back 80 or so. Thus this movie project into which Square had put an unprecedented level of faith and resources proved to be a disastrous loss of funds.

The outcome of this misstep counted Sakaguchi being force to leave Square, and also acted as a blow to the company’s pioneering spirit, making their future strategy be more prudent minded, with an over reliance on the golden Final Fantasy game brand. This should not come as a surprise as the millions of losses caused by the Spirits Within movie had put Square in a tight spot financially.

Perhaps unrelated to these developments the 2000’s was also the time where Square became host to a number of damaging internal struggles. The first victim of these struggles was the title that was to follow the successful and timely PlayStation 2 generation entry of the main Final Fantasy series, this being the 10th iteration, FFX.

Because of Square’s MMORG FF entry sharing numbering with the main series the next in the single player FF series was to be FFXII. In a move reflective of Square’s old pioneering ways the director of said title had chosen to be Yasumi Matsuno, the genius behind the innovative and forward looking RPG Vagrant Story.

This decision had no doubt been taken due owing to Matsuno’s creative track record as Vagrant Story had not sold well, but was highly regarded by critics.

Unfortunately with Japanese companies being mostly black boxes whenever they chose not to speak publically in an official manner it is hard to gauge what exactly went wrong during the development of the FFXII project. There are some facts from which some conclusions can be drawn from though. FFXII had an unprecedented 5 year development cycle owing mostly to internal conflict. The director and producer of the project, Matsuno, was forced out of all his involvement in the project about halfway through. The official reason cited for this devastating move was illness, but from circumstantial evidence it is easy to conclude that the real root cause was creative conflict between Matsuno and his co-director or certain fractions within the team.

In the FFXII team there were a number of members coming from the from Vagrant Story and a number from the MMORG Final Fantasy entry. The conflicting design aesthetics of those two very different projects is detectable in the final design of the delay stricken project. Many innovative design aesthetics were carried over from Vagrant Story, such as a lack of random encounters, and a complete lack of separation between exploration and combat phases. But gone is the direct control players were given over the actions of the main character in Vagrant Story being instead replaced by an MMORG like auto battle system, though of the fully customizable variety which was a very innovative take on the concept.

In the wake of his departure from the team Matsuno subsequently left Square altogether. In the end, FFXII, while critically well regarded, bore the negative traces of the split and subsequent delay which had the added detriment of seeing the title released in a most inopportune time, at the tail end of the PlayStation 2 life cycle.

The internal difficulties that broke with the timely momentum with which main Final Fantasy had so far been introduced proved to become a trend for Square going forward. Final Fantasy XII’s much delayed debut had put its release at the very tail end of the console cycle thus the next installment would have its debut on next generation hardware.

Unlike FFX which was introduced in the first year of its console cycle FFXIII’s lengthy development meant it saw release in year 4 of the new console cycle and this delay had cost Square dearly. The western climate which that had welcomed FFVII so warmly had in the subsequent years cooled considerably since the last series debut.

To make matters worse once FFXIII did see release it seemed to have shed many of the innovations introduced in the previous entry and its linear design, made so mostly to aid its focus on FMV aided storytelling was out of vogue with current generation design sentiments.

Looking at the presumed lengthy development cycle of FFXIII it is hard to detect where all the time was spent other than on graphical polish and production of stylish FMV sequences. There however fault to be found with the assumption that the title was under full development for the entirety of those 5 years. While Square certainly chose to reveal the title to the world as early as E3 2006 the fact remains that little actual development took place on the title until much later.

The root cause of this delay was an decision within Square to develop an internal multi-platform engine for use in all of their current generation efforts. Majour delays were caused by this engine being developed to concurrently incorporate the requirement and needs of so many different internal projects. These delays in the development of the engine in turn pushed back the development schedule of all the projects dependent on it.

As such as late as 2009 the FFXIII project still lacked a coherent vision, which was finally settled upon when the team was commissioned to make a gameplay demo for inclusion in the Advent Children animated movie Japanese Blu-ray release.

The fact that the team responsible for the project was still as unsettled on an overall strategy for the project so late is indicative of the internal conflict that marred Final Fantasy XII’s development being still at work at Square today.

If there is any conclusions to draw from Square’s current generation console strategy is that their approach differs greatly from that of the other giants. Unlike them Square has maintained a big focus on internal development, but their output has suffered somewhat from the loss of such visionaries as Matsuno, and strong presences such as Sakaguchi.

While awaiting the completion of their internal engine Square licensed Unreal Engine 3, an engine often at the center of troubled Japanese projects, and used it to create the title Last Remnant which was to be their answer to the westernization movement.

The title, however, proved to be a majour misstep for the company. This was a troubling development for Square as despite their past liberal experimentations with other genres they remain still a largely and overwhelmingly RPG focused company. This was a dangerous position to be in since the JRPG genre had seen a rapid decline in popularity overseas as the current generation had matured. There the zeitgeist had instead shown a clear preference for the rising western RPG movement.

With the designs of Last Remnant and Final Fantasy XIII drawing much criticism in the west it is clear that unlike the other Japanese giants it would be very much in the interest of Square-Enix to keep an intelligent finger on the pulse of the overseas zeitgeist in order to equip their future efforts to better suit a worldwide audience.

It is here that once again the loss of an aggressively innovative designer such as Matsuno is damaging to the future prospects of Square. Matsuno’s Vagrant Story was ahead of its time with its open world design, direct control combat system and focus on gameplay over static storytelling putting that 10 year old game better in tune with current sentiments than 2010’s Final Fantasy XIII.

Last Remnant is an especially interesting case study exactly because it was positioned to be part of Square's strategic move to conquor the western home console market which had slipped out of their hands in their long absence of any releases coming from them at a time when the market was shifting. In a way the design of efforts such as Last Remnant and Final Fantasy XIII show that Square does not possess an intuitive understanding of overseas sentiments.

In case of Final Fantasy XIII this is especially tragic as the core combat mechanics of that game, while the polar opposite of the engaging direct control combat of Vagrant Story by being a offshoot of the auto fighting variety was nevertheless a very innovative and interesting take. By speeding up the auto figh combat to feel almost instantanious and require rapid change of paradigms the insipid turnbased combat of JRPG's was made exciting and engaging in FFXIII. The tradegy of FFXIII is that they got one of the most important parts right but the overwhelming focus on story, a prevalence of lengthy stylish cutscenes and a percieved lack of freemdom in the linear design of most of the game put off their overseas audience. It is especially aggrevating that hese issues in particular held the game back when considering that the 16bit era Final Fantasy titles employed a design structure, much better in keeping with current sentiments with their open world design and emphasis on exploration.

That being said, Square-Enix, with their internal engine at a state where projects of the scope of FFXIII can be made using are positioned favourably, at least in pure technical terms. While their attempts at breaking out of their role as an RPG only developer have been largely unsuccessful so far, if not halfhearted as well, they did chose to complement that perceived weakness by buying Eidos. While this decision is questionable at best it is still a much better strategy than the overseas outsourcing path taken by Capcom and Konami. That is not to say that they have not dipped their toes in those waters for they had a Final Fantasy project comissioned to the now defunct overseas Grin studio, and they recently comissioned Double Helix to reboot their Front Mission franchise, which netted predictably dissapointing results. Hopefully with Eidos in their posession and with many examples of overseas outsourcing being a bad strategy Square experimentation with that method is at an end.

In conclusion the future home console prospects of Square-Enix’s Japanese branch is a question of wither or not they will be able to incorporate design elements into their future products that fall better in line with global sentiments while at the same time avoiding the pitfall of trying to outright imitating other properties which is the easy road so far having caused many Japanese casualties on their path to global success.

Another factor that hindering their success is the lack of internal focus and organization that is continually causing majour delays to internal productions such as the upcoming Final Fantasy Versus XIII. These internal inefficiencies are an hindrance to Square’s traditional flexibility, and prevents them from responding to shifts in a promptly manner.

Yet another factor working against them is their vast experience with making high quality computer animation. The choice to prioritize story telling over gameplay in Final Fantasy XIII led to its mostly linear design which became the focus of much criticism. Much of the story in FFXIII was conveyed through use of elaborate pre-rendered animated sequences and their next title Versus seems to feature a similar heavy use of such sequences.

This practice, while partly responsible for Square’s success in the past, is now a detriment as use of lengthy FMV sequences are out of vogue in modern game design, and for a good reason.

Yet, despite criticisms and its troubled development FFXIII was still a sales hit with 5 million units sold. Thus the franchise remains a very good and profitable property in Square’s hands and the their future prospects are still very bright, though somewhat dimmed.

Therefore, unlike the other two of the former triumvirate they are the one most interesting to keep an eye out for as their behavior over the next few years will be the main determining factor of their fate. If they manage to successfully listen to and please a global audience by making a number of prudent changes to their design philosophy going forward then they will likely retain their global seat. Alas such as it is they are currently in danger of losing their grip on the global market in lieu of a few bad decisions going forward.

The next part of this series continues to look at notable Japanese developers and their respective home console strategies.

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