Square Enix 2007 Annual Report Download - page 9

07
I think PC-based casual game market in U.S. -consisting of
people who play games occasionally and informally-is typical
example of such threats. It has unexpectedly swelled into a market
worth several billion dollars in a few years.
The shift in game media from masked read-only memory and
optical discs to networks is transforming marketing and distribu-
tion. Even though the industry may accept the logic of this meta-
morphosis, concrete plans to counter it are few and far between.
Many of the leading game companies lagged behind the smaller
competititors to realize the huge potential of the PC-based casual
game in U.S, whereby housewives and other people who had
never before played games suddenly became aficionados.
We are seeing a dramatic increase in opportunity for com-
panies in other industries to enter the video game industry with
totally different business models. As a result, there is no future
for those of us who have staked our futures on the game busi-
ness unless we are willing to break free of tradition and make
conscious decisions to changes our strategies.
At present, our basic policy is to be diverse.
As customers themselves have diversified, as has their inter-
action with content, content and services naturally should also
become more varied. By this, I mean not to seek the middle
ground or to become more decentralized. Rather, I mean that
we must identify a few groups of customers that each share
tastes and preferences, understand each group deeply, and
deliver a number of selected content and services that truly
cater to each of specific customer group. We should seek to
have diverse customer groups as possible.
Moreover, our business model must be flexible. As our
vision of the future for the ecosystem, or the huge industry sys-
tem including games remains unfortunately unclear, it is vital to
have a host of strategic options, which enables us to conform
to any environmental changes responsively.
In closing, I would like to describe our long-term objectives. We
want to build a company that evokes specific emotions or mem-
ories among everyone who hears the name SQUARE ENIX.
Earlier, I mentioned that we aimed to be the world’s leading
content provider and community management company. I
mean the same thing here.
Next, I would like to refer to our essential business domains
and priority areas to realize this vision. I admit it is somewhat
abstract, but I believe it is important to mention here.
It is often said that the value in the computer industry has
changed from the realm of hardware to software, and is now
moving from software to services. The concept of “communities
(relations)” in our business may correspond to the “services” in
the computer industry.
To clarify this argument, it is useful to break down software
into code and data. Code is the “engine” that drives data,
“content.” Game is unique software in which data plays more
important role than in business software.
We shall focus on creating the content, data, and derive our
revenue and earnings from the communities.
Immediate task for us is to ride out the transition period and
emerge in our new identity. We are putting our full efforts into
generating results that will meet the expectations of our stake-
holders. As we take on these new challenges, we look forward
to your continued support.
July 2007
Yoichi Wada
President and Representative Director
SQUARE ENIX CO., LTD.
SQUARE ENIX Group aspires to evoke emotions
Value Transformation
Hardware Software Communities
Data
Code
[Figure 6]
#H2-14-07ｽｸｴﾆ-欧文 07.8.31 14:26 ページ7