With uncertainty on the rise in society as a whole, change was also underway in the realm of digital entertainment, where we position our core business. In 2023, we saw the release of eye-catching products and services in multiple domains where the commercialization and adoption of emerging technologies had seemed a more distant eventuality. The potential of these offerings also garnered greater attention than ever before.
For example, whereas the extended reality (XR) domain had previously developed primarily around business applications for the metaverse and other virtual spaces, 2023 saw the rise of many new services fusing virtual spaces with the real world. A case in point is the way the architecture sector, which previously had limited integration of XR in its business, began increasingly adopting these technologies because they enable the conversion of real-world architectural structures into data, a process also facilitated by the widespread use of commercial drones. In the realm of digital entertainment, where the focus has been on pioneering the development of new content, the experiential value of digital content itself increased dramatically as devices came to market that were capable of delivering even more immersive, realistic experiences using virtual reality (VR) and augmented reality (AR). The next step will be applying these technologies to new forms of content that fuse the real and virtual worlds.
Artificial intelligence (AI) and its potential implications had for some time largely been subjects of academic debate. However, the introduction of ChatGPT, which allows anyone to easily produce writing or translations or to engage in text-based dialogue, sparked the rapid spread of generative AIs. Its release made it apparent that the applicability of generative AI was by no means limited to text, and the subsequent months saw a quick succession of launches of new services and content that expanded generative AI into a variety of domains with close ties to digital entertainment, including images, video, and music. I believe that generative AI has the potential not only to reshape what we create, but also to fundamentally change the processes by which we create, including programming.
We also intend to be aggressive in applying AI and other cutting-edge technologies to both our content development and our publishing functions. In the short term, our goal will be to enhance our development productivity and achieve greater sophistication in our marketing efforts. In the longer term, we hope to leverage those technologies to create new forms of content for consumers, as we believe that technological innovation represents business opportunities.
In terms of new business domains, we previously identified three focus investment fields, namely blockchain entertainment/Web 3.0, AI, and the cloud. Last year we redefined our overarching mission and goals for these three fields. We are currently working to modify our organizational structure and optimize our resource allocations to support these efforts.
There’s nothing I wish more for Square Enix than a solid earnings loss, if not an outright bankruptcy scare.
(Of course it won’t happen because companies are too big to fail, see the Metaverse fiasco, but one can dream)
