When Square Enix declared that the critically acclaimed Tomb Raider did not reach sales expectations, many were confused. The game sold 3.4 million in its first month. Those were incredible numbers, but Square Enix was expecting six million. Now there is a growing realisation within the company that the AAA retail business model must adapt to changes in the marketplace.
As reported by Games Industry International, Square-Enix has been discussing the different ways in which the company can adapt. At a briefing a couple of weeks ago Square Enix director Yosuke Matsuda claimed that the company had to move away from the rigidity of the packaged goods model and find new ways to profit from large scale productions while games are in development.
“I believe it is difficult to guarantee an appropriate return on our investments within the revenue model of purely packaged software,” he said.
“There is a huge difference from the perspective of business risk between a model where no revenue opportunities take place for several years until the product is completed (upon which investments are recovered at one time), and a model where revenue opportunities exist in some form prior to product completion, even if the amount of money invested is the same.”
But how will Square Enix profit from games in development? Is it about finding different ways to profit from the same IP? These are the questions Square Enix seem to be asking themselves. Square Enix seems committed to releasing big budget titles like Tomb Raider, but wants to maximise its profits during the long term development of quality products, which is fair enough — but what does that mean for consumers?
Time will tell I suppose.
Square Enix: “It is necessary to review the definition of ‘AAA Title'” [Games Industry International]