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Interview: Challenges And Opportunities Abound For New Square Enix U.S. President

Interview: Challenges And Opportunities Abound For New Square Enix U.S. President

August 2, 2010 | By Christian Nutt

August 2, 2010 | By Christian Nutt
More: Console/PC

On July 21, Square Enix announced that its U.S. division, based in Los Angeles, would have a new president and CEO, Mike Fischer.

Fischer, who says his ambition has always been to work in games, got his start at Sega in Tokyo 20 years ago, most recently worked in London as Microsoft's consumer and online marketing officer. His extensive resume, also includes stints working on the Xbox in the U.S. and Japan, and at Namco, during that company's PlayStation 1 and 2 salad days.

Though he's still getting his bearings, having just finished out his first month and "still living out of a suitcase", Fischer is so far extremely bullish on the company compared to those at which he's worked in the past.

He describes the U.S. office's staff as "remarkable", many of whom joined the company because they were long term fans with passion for the company's games. "That's really been my first and my biggest takeaway," says Fischer. "What I've experienced here has reinforced the decision I've made about this company and this industry."

It's not just the staff in LA; he also sees a lot to like about the current setup and attitude of the global Square Enix organization, which spans development studios and publishing offices in Asia, North America, and Europe.

"What [product development at Square Enix] really is, is a roundtable discussion looking at all of our development, for all of our markets together. I've worked in the international marketplace for quite a few years and I've never seen such an open, collaborative approach as I have here," says Fischer.

He will oversee the U.S. arm of the company, as Phil Rogers, former CEO of Eidos, sits above the European division, and Yoichi Wada, the Japanese parent company's president and CEO, remains above the overall organization.

Online Ambitions for Growth

Says Fischer, "I think the real opportunity [for Square Enix] is what I've already seen from Wada-san in terms of looking to me and my counterpart in Europe, Phil Rogers, as real equal partners, and building our global strategy, and getting the most out of all sides of this business."

"In one of the first conversations I had with Wada-san after I came on board he was saying, 'Look, of course I want you to do your best to sell our products, but I need you to do so much more than that. I need you to give me your feedback on what we can do to be more successful.'"

Now that he's at Square Enix, he says, "there are short, medium, and long-term goals" for the company. While the short term includes the currently-announced product slate -- from Deus Ex 3 and Kane and Lynch 2 to Final Fantasy XIV and Kingdom Hearts: Birth By Sleep -- "in the medium term, there's a really important charter to take advantage of my position here, and really be a connection point for a lot of the innovation that is happening in game development, particularly on the online side," explains Fischer.

Positives In The Social Space

At E3, Wada told Gamasutra that social networking is an "example of a place where we might bring in fresh blood," and Fischer appears to think that this and other online markets present the most opportunity for the company.

"In the longest term, I'm part of this new global leadership team that's looking at the longer-term business decisions that we have to make in terms of platforms, audiences, genres and technologies," says Fischer. "Obviously, some of that you're very familiar with: what we've done with... Final Fantasy XI [and] XIV. And there's a lot of exploration that we're doing in terms of social media, and social games, as well as work that's already being done on the mobile side. What I'm not ready to do right now is talk about any specific, unannounced projects in progress."

While traditional media like music, movies, and TV have struggled with the online shift, says Fischer, "You talk to the video game industry, and this is all upside; you can now add DLC revenue to our retail sales, we can now bring online subscriptions into play, we can make new money from social networking. It's such a positive, optimistic view. It's in some degree because of new business models, but I think in large part it's also because there are new audiences that are coming into play."

And these audiences are already engaging with platforms like Facebook and iPhone as games platforms -- whether or not they think of themselves as gamers. "I think that's a remarkable difference between our industry and the other entertainment industries."

Unique Opportunities

Interestingly, Fischer feels that the company's strength in storytelling through the games medium could be an asset to its online and social games business -- two areas of the industry that typically resist narrative more strongly than single-player games do.

"There's a storytelling component that is continuing to become more important over time. I think that gives us a very strategic advantage," says Fischer. And noting the Final Fantasy series' strong appeal with female players, "I don't know what the secret sauce is that makes that special, but it really is a remarkable example of the opportunity that's there if you can broaden your net... if you look at the people that are playing Facebook games or iPhone games, you see more of the 50-50 gender mix. I think that speaks to the opportunity to grow our audience."

He also sees "remarkable" opportunities for product releases in China and Southeast Asian markets -- markets neither Square Enix nor Eidos could previously address. "It's really been amazing in these last few years to see these markets open up," says Fischer. Eidos has a Shanghai studio, too, which is a "fantastic development resource, as well as a great outlet for business." However, Fischer was not willing to specify any plans for marketing to the region, which Square Enix has yet to enter as publisher.

Closer to home, Fischer sees the retail model -- even with subscription fees, as in the case of Final Fantasy XIV -- as the "simplest". "What's really interesting, for example, is seeing what GameStop is experimenting with by selling digital content at retail, or using DLC as a presale premium for pre-orders. These are amazing innovations that I didn't have in mind when some of these technologies first came out, but it's really creating fantastic added value," says Fischer. "A store associate can say, 'Oh you're buying Kane & Lynch 2, did you know there will be a new level available next week? You can buy it here for 10 dollars.'"

Square Enix Studios - Going Global

Of course, one of the biggest driving forces behind the Eidos acquisition for Square Enix was increasing its foothold in Western markets -- thanks to studios like Io Interactive and IP like Kane & Lynch, and of course Tomb Raider. While the company's titles, particularly Final Fantasy, have maintained popularity with audiences outside of Japan, current generation game development budgets mean that global launches are a must.

"The scale that's required to recoup that investment is made easier when you're focusing on a global market instead of just one. There's the opportunity to take some [existing] franchises more global. I'm also more interested in the opportunity of taking some of the Eidos studio output and taking advantage of Square's position in Japan to make them more successful in Asian markets."

However, he says, "There's always going to be a place for global content and a place for local content," echoing comments made previously by Wada.

Prior to its Eidos acquisition, Square Enix had not done much development in the West. Though the company currently has Front Mission Evolved -- based on a cult IP that dates back to the 16-bit Super Nintendo -- under development with California-based Double Helix Games, that isn't the best example of global collaboration, Fischer says.

"The real opportunity that I'm seeing here... [is] a more collaborative approach to our studio management. I'm seeing more cross-pollination... What I'm seeing is a really fantastic dialogue of the leadership in the U.S., in Europe, in Japan, together.

"The discussion isn't just, 'We're making this game for the Japanese market, what's your quota in the U.S.?' What it really is, is a roundtable discussion looking at all of our development, for all of our markets together. I've worked in the international marketplace for quite a few years and I've never seen such an open, collaborative approach as I have here," says Fischer.

Since the merger, people like Square Enix's worldwide technology director Julien Merceron have been working to integrate the company fully as a development organization. "I'm learning Japanese; I've already started since November. I know that there are people in Tokyo that are starting to put more effort into English, as well. So on both sides, I see that people are really willing to make it work, and I find this extremely amazing," said Merceron earlier this year in a Gamasutra interview.

More Challenges and Opportunities

Of course, Square Enix has passionate fans, many of whom have been playing its games since the NES days. Says Fischer, "Wada-san has a dynamic vision... We're in a business where you either evolve or die. I'm really impressed with the willingness to innovate that I see here. Of course, we also have to make sure that we don't neglect our current franchises and our current audiences. We have a very loyal fan base for Final Fantasy and Dragon Quest in particular, that have expectations about what their experience is going to be."

This is something the company has struggled with recently. As Wada acknowledged in a recent Gamasutra interview, Final Fantasy XIII was a polarizing game. "I think this is a product that was able to meet the expectations for those who know Final Fantasy... Should Final Fantasy become a new type of the game or should Final Fantasy not become a new type of game? The customers have different opinions. It's very difficult to determine which way it should go."

And as Fischer points out, Square Enix is not just a games company -- it has a successful toys business (which includes figures based on non-Square Enix properties such as Metal Gear Solid, Resident Evil, and Bayonetta. It also has a successful manga division -- and the company recently announced plans to launch an online portal for its popular titles, such as Fullemtal Alchemist and Black Butler, in the U.S. and France -- which Fischer says "opens up the door to a whole new industry."

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