Square Enix 2013 Annual Report Download - page 8

titles, showcasing our technologies. We will never lower the flag of such
titles. In fact, they are strong brands and therefore have the potential of
diverse content exploitation. It is possible to establish a business model
that delivers content in various formats to customers even before the
launch of a game. Through implementation of such a development
process, we will promote approaches to raise investment turnover by
accelerating earnings opportunities and reducing financial risks. These
approaches should not be discussed in the context of financial
consequences. A lack of earnings opportunities over a long period of time
means, essentially, having no contact with customers during the same
period. In these days, it is becoming crucial to strengthen customer
relations. Re-examining our approach to long-term, large-scale
development is also a step toward building a better customer relationship.
Next, let me comment on the earnings model. In the online game area,
including games for mobile devices, flexible pricing models represented
by free-to-play (“F2P”) have become mainstream. Sales units of F2P-
based games are not physical discs, but rather are in-game items or
virtual currency. Therefore, the F2P model is flexible in that earnings are
adjustable according to players’ demand without any restriction on
distribution of game products. My aim here is not to discuss the
dichotomy between F2P and the fixed pricing model, but I would like to
put emphasis on the major transformation of the game-playing
environment in these days and big changes in consumer preferences
regarding games. Devices for playing games are undergoing a rapid
evolution and customer requirements for game experiences are becoming
diversified accordingly. Consequently, the time has come for us game
makers to take more flexible approaches in offering games and to devise
various earnings models conforming to customers’ game-playing
environments, moving away from the limited outlet of disc-based
distribution of games. In this current of change, it is extremely important
for the HD games category to enable transition from a disc-based
earnings model to a more flexible one. This will define the future way we
pursue HD games development.
The evolution of devices, particularly smartphones and tablets, is
progressing at an amazing pace. Consumer game consoles are becoming
smarter as well. It is too soon to predict if all of these devices will
ultimately converge or diverge, but regardless of the direction taken, we
still have to have the capability of supplying games to any platform. On
top of all that, the market has even more choices: new game machines
called microconsoles, as well as the upcoming commercial launch of
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