Square Enix 2009 Annual Report Download - page 9

for its customers has much in common with our own approach.
We anticipate significant opportunities to generate short-
and medium-term synergies between SQUARE ENIX and Eidos.
Although Eidos develops excellent content, the company’s
major source of revenue is limited to game software sales. By
promoting SQUARE ENIX’s unique strength in creating multiple
revenue opportunities for content, we will strive to maximize
Eidos’ earnings potential. In addition, since the entire SQUARE
ENIX Group’s sales will become more geographically balanced,
we believe we can generate substantial scale advantages
through our publishing of games. Furthermore, while SQUARE
ENIX has built its reputation principally based on its strengths in
the role-playing game (RPG) genre and on its capabilities in
high-quality graphics, Eidos is known for its strengths in the
action and adventure genres. Consequently, we think the two
companies can build an ideal complementary relationship. I am
sure that by providing opportunities for game creators from both
companies to communicate and share their know-how, we can
forge a sound base for the creation of superior content.
Another key point is the potential for long-term advantages.
Unlike consumer electronics or business software, the “global
standard” model is not applicable to the entertainment industry.
By this, I mean that a single standard does not dominate all
markets. I believe that striking the correct balance between
global and local is particularly crucial. Based on this awareness,
I think that there are limitations to what can be achieved in
overseas business expansion if we simply rely on extending
bridgeheads out from Japan. By this, I mean a model whereby
Japanese staff members are sent out to overseas locations to
establish offices and hire local staff as a means of expanding the
business internationally.
Eidos has a history in Europe spanning over twenty years,
and was listed on the London Stock Exchange prior to the
acquisition by SQUARE ENIX. The experience and track record
built up by Eidos now becomes part of the SQUARE ENIX
Group, and we anticipate significant benefits from the ideal
fusion of these two corporate cultures.
Established Framework for Growth
We can spare no effort as we strive to create the highest quality
content. Naturally, until now, we have focused on building a
sound framework for growth. We have been making every effort
to establish a broad variety of points of contact with our customers
and to build a business platform capable of expansion into a
global concern.
The beginning of this building process was the merger of
ENIX and SQUARE. Through the birth of SQUARE ENIX, we
have been able to construct a solid business foundation
comprising of our respective game businesses, characters and
derivative products, publication and mobile phone content.
Through this we have successfully established a diverse range
of customer points of contact.
Later, by acquiring TAITO, we added physical points of
contact with our customers through the game arcade-based
Amusement business. Now, with the addition of Eidos, we have
successfully established the foundations for a truly global enterprise.
The framework we have been aiming for is now largely
visible. What remains is the establishment of business bases in
China and other parts of Asia, and the shift to an online business
platform. Of course, a framework on its own does not make a
business. We must build out from what we have established,
and, I am acutely conscious of the necessity to follow up with
tangible results.
Over thirty years ago, the arcade revolution was triggered by
“Space Invaders” (TAITO). Twenty years ago, home game-con-
sole software first entered popular consciousness with the arrival
of “DRAGON QUEST” (ENIX). Ten years ago, the 3-D graphics
that enabled game content to provide the same viewing experience
as other video-based content was “FINAL FANTASY” (SQUARE).
Also 10 years ago, a milestone in 3-D action adventure was
reached with the launch of “Tomb Raider” (Eidos).
The SQUARE ENIX Group has consistently been at the fore-
front of major breakthroughs in the history of the game industry.
Although it may seem somewhat immodest, I believe we have a
mission to play a major part in the coming convergence between
media and entertainment. Our focus on building a sound growth
framework is based on this mission.
Although our business results for the fiscal year under review
were less than satisfactory, we are steadfast in our commitment
to be a driving force in the media and entertainment industries.
In these endeavors, I look forward to your continuing loyal support.
July 2009
Yoichi Wada
President and Representative Director
SQUARE ENIX HOLDINGS CO., LTD.
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