, something that the Japanese market alone can't sustain. 'Achieving major growth in the game industry is difficult now for companies that compete primarily in the Japanese market, given its greying demographics,' said Square Enix president Yosuke Matsuda. 'The Japanese market is no longer sufficient for achieving a level of earnings that enables us to recoup our development investment and generate a profit, and we therefore need to approach our development efforts based on the assumption that we have to succeed in the global market.' This may all sound fairly obvious (releasing games worldwide means more people available to spend money on them), but as this comes from a financial report, this is a statement meant more for Square Enix's investors than its customers. The obvious concern is that this will signal a return to the bad old days of the Xbox 360 era, when Japanese publishers first began to worry their games were no longer appealing to West){kind=link}
In a statement to shareholders, Square Enix explains why it’s only going to do more to target global audiences and not just rely on Japan.
The news of Square Enix selling practically its entire Western division remains one of the most surprising industry stories of the year. However, despite what some may think, this doesn’t mean the company is giving up on the Western market.
Aside from the fact that Square Enix said at the time, that it would continue to publish Western made games such as Just Cause and Life Is Strange, the company has also recently admitted it can no longer afford to ignore markets outside of Japan.
It’s even gone so far as to call the Japanese market insufficient for recouping development costs and turning a profit, meaning it is ‘critical’ that it release games that can succeed globally.
One major contributing factor is the increased costs of game development. It’s been obvious for a while that games are becoming more and more expensive to make (it’s Sony’s justification for selling its titles at £70), something that the Japanese market alone can’t sustain.