Square Co.

Back to Contents of Issue: June 2000

by Yoko Shibata

Company: Square Co.
Ticker: 9620
Exchange: OTC
President: Tomoyuki Takechi
Employees: 744

Square Co., a developer of home console games best known for the Final Fantasy series, is leaping into network gaming. Play Online, the company's Net-based entertainment information service, allows for network play via PCs, game centers, and Sony's PlayStation2. It also gives users email, schedule management, information on comics and sports events, and the ability to download comics and music. The service is being offered through OCN, an Internet service provided by NTT Communications.

To attract young customers to the service, Square will make good use of its upcoming Final Fantasy X title, scheduled to be released next spring. That version will, among other things, allow users to obtain info about game strategies online, instead of going through books, which more than one-third of Final Fantasy enthusiasts do now. Worldwide, Square has sold more than 25 million units of the Final Fantasy series.

Square expects its new venture to contribute significantly to the bottom line, particularly membership fees from Play Online.

Square shares saw heavy buying after the company reached an agreement with Disney Interactive to develop a game for the PlayStation2. The title is scheduled to be released in Japan by the end of next year and in North America and Europe in 2002.

The company suffered an earnings setback in the year to March 2000, but that came about more from strategizing, says Nomura Securities analyst Yuta Sakurai: "It was a transient phenomenon caused by the strategical postponement of the release of the Final Fantasy IX game until July 2000." Square's rival, Enix, postponed the launch of its Dragon Quest VII three times to May 2000. "It will not undermine Square's predominant position in the industry," Sakurai says. "Its creative content development ability and its brand name recognition remain intact."

The question is, even if Square can develop creative content for network gaming, do gamers really want network gaming, and are they willing to pay a membership fee for it? Only time will tell, and much of Square's success will depend on the answer.

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