Square Enix Surges on Metaverse Embrace Despite Gamer Backlash

(Bloomberg) -- Square Enix Holdings Co. President Yosuke Matsuda issued an enthusiastic endorsement of novel technologies such as blockchain gaming, non-fungible tokens and the metaverse over the weekend, triggering an 8% jump in the game maker's shares -- as well as a backlash from wary gamers on social media.

In his new year's letter, Matsuda touched on the full range of nascent technologies, including artificial intelligence and the proliferation of 5G wireless connectivity, but it was his comments about using blockchain tokens to entice players that drew the most attention. He also said Square Enix would consider issuing its own token in the future.

“I realize that some people who ‘play to have fun' and who currently form the majority of players have voiced their reservations toward these new trends,” Matsuda wrote in the letter, which was released on Saturday.

“However, I believe that there will be a certain number of people whose motivation is to ‘play to contribute,' by which I mean to help make the game more exciting,” he added. “Traditional gaming has offered no explicit incentive to this latter group of people.”

Many gamers and industry observers expressed dismay on social media at the suggestion that playing to have fun was about to be outmoded by a different method of engagement.

However, the president's sentiments led Square Enix shares to their biggest jump since August in Tokyo on Tuesday, the first day of trading after the letter was published.

The embrace of NFTs and in-game blockchain token economies to incentivize players to create more content will “enable self-sustaining game growth,” according to Matsuda.

“Incorporating decentralized games into our portfolio in addition to centralized games will be a major strategic theme for us starting in 2022,” the president wrote. “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.”