You were building a studio organization in Los Angeles internally but rumors suggest the studio is not around anymore.

MF: Well, "studio" is a pretty big name for what we were doing. We had a small internal team that was working on a project, and I read a lot of those news sources that are that are really focusing more on external projects -- but we're still going to need a lot of internal resources to support that.

So what kind of resources do you want to have in Los Angeles?

MF: I mean, obviously, we're looking for producers, creative directors -- that type of work -- in addition to a strong sales and marketing team.

And that's mostly people who are going to be interfacing with external teams who will be working on projects?

MF: That's my thinking right now. The advantage that we have -- again, because we have such strong lineup and strong IP -- it helps us attract first tier partners, so that brings a big advantage, and I'm also lucky because we do have an organization really, from top to bottom, that's passionate about games, and that includes myself.

I grew up a gamer, my entire career is in the games industry, so even though right now things like social gaming is already hot, and it's attracting a lot of VC attention, I'm not confident that a lot of that interest will still be there in a number of years as some other category becomes hot down the road.

We've got an organization here whose passion really is built around that. That gives me confidence in a long term success as well as just the fact that the trends that right now happen to be hot in the gaming area.

You'd like to build around games for gamers, primarily, is what you're saying?

MF: No. How you define the gamer is very subjective. And I think that obviously we have the core Final Fantasy fans, as well as the action and adventure fans that have come to us through the acquisition of Eidos' studios. But I think that the definition of gamer as "official hardcore gamer" is a very artificial definition and I've just seen all kinds of interesting ways people try to force industry definitions on the consumer.

So, for example, in the industry we make a hard definition between say an RPG and an action-adventure, but if you talk to consumers, they may see things in terms of fantasy or science fiction. They're a completely different blend, so I think sometimes we force artificial definitions, and "gamer" is one of them.

Now, the fact of the matter is, right now television networks are canceling soap operas because so many of the official soap opera audiences are playing games. If they're playing more games an hour than a college student, who is the gamer?

I also think you're seeing the maturation of the gaming audience. So someone who played Final Fantasy VII back in 1997, they're still playing our games, but they're in a very different part of their lives and they may be playing some games in a different way.

Heroes of Ruin

You know you signed a deal with n-Space for Heroes of Ruin. I cannot remember the last externally Western-produced Square Enix game.

MF: Well, Front Mission was built by Double Helix here, and I'm trying to think. Obviously Dungeon Siege III was a completely made in the U.S.A. game. We did that through Obsidian Studios, we managed that internally, and again that's another example I should go back to, in terms of using U.S. resources.

We have an internal producer, our biz dev team delivers the opportunity, we acquired the IP from Gas Powered Games, we hired an internal producer who managed the game through Obsidian, and it's launching in a couple of weeks. So that's a type of model that, I think, is going to be easy for us to manage. We have the resources, we have the assets. It's not necessary for us to hire the internal studio to make these projects happen.

So Heroes of Ruin follows along a similar path. That, in fact, is being managed through the Square Enix Studios out of the UK. So there's a lot of cross-pollination that you see. Dead Island, that we're helping to sell and distribute here in the U.S., is obviously developed in Poland from a German studio. That introduction was made to us by our sister company, so there's a lot of cross-pollination that's happening right now.

It seems like your opportunities are to shift into a publisher that doesn't rely just on its own studios.

MF: Well, but understand -- yeah, this is all being done from the context of, I have these fantastic internal studios now, Square Enix Europe or Square Enix Japan, that are providing that for me. So my goal for Square Enix in America is not to replicate what we already have, but to do some things that we're not. And that's why I'm looking at these things, like external partners, or licensing and publishing agreements the way that we are, because I already have world-class traditional games coming at me from both organizations.

If you look around, I don't know that there's any publisher right now that has that kind of globally-balanced product the way that we do. And there have been Japanese companies that have made big investments in Western publishers, or Western developers, but I don't think anyone has ever delivered a lineup the likes of what you see here on the show floor. So because I have that, I can take advantage of the opportunity to do some of these smaller, more agile projects.