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Introduction
The transition from "current-gen" consoles to "next-gen" consoles is almost always a challenging phase for most publishers, and a time sure to strain profits. Development costs ramp up as a result of more expensive and technologically advanced hardware, which puts a greater need on minimizing risks--but at the same time, the risks are higher for a number of reasons. There's a developmental learning curve involved; it's often unclear which console will emerge as the market leader; it typically takes a long time to bring new entries in top-tier established franchises to the market; lack of familiarity with new hardware often leads to more unpolished efforts that can scare off potential consumers. On and on the reasons go, but one thing is clear--the hurdles are such that it's a rocky time for the large publishers.
Over the past year, we have been transitioning into one of the more interesting next-gens we've seen in quite a long while--the last market leading console dominated the landscape by an almost unprecedented margin (certainly unseen in the last nearly twenty years), its successor began showing early signs of being off to a turbulent start, while all three new consoles took divergent, unique paths to their hopeful eventual success.
But what's a publisher to do? They can't simply refrain from releasing any games at all; they need to find a way to keep releasing content to keep their brand name strong and in consumer minds, as well as to bring in monetary gains, despite the uncertainty and risk involved in the volatile landscape being shaped. If one scrutinizes the market, it's interesting to see how different companies can actually personify viable, yet very distinctive approaches in how to make this transition, and it's even more interesting to contrast the roads these companies are walking.
Square Enix: Handholding the Transition
As the PS2 era began drawing to a close, Square Enix had a problem. The company, even more than most, was heavily reliant upon the multiplatinum franchises it was most well known for--Dragon Quest, Final Fantasy, and the Final Fantasy + Disney hybrid of Kingdom Hearts. PS2 software sales were dwindling, and unfortunately, two of the three franchises were well known for their enormously high production values and budgetary expenses, requiring years of development time by large, dedicated teams. There just wasn't a feasible way to deliver such high-end content on a timely basis following the launches of new hardware, which could have and would have meant a period of multiple years in the lurch without the tentpole releases on which the company banked.
But a solution presented itself, and a pretty unusual one at that: handhelds. Or, to be specific, the DS. For those who haven't been paying attention, the little dual-screened wonder has propelled itself to an incredible status in Japan--it's the fastest-selling gaming system ever, it's on track to become the best-selling system ever (it's passed the GBA and the SNES, and should pass the PS2 by the end of the year), it's launched software sales to new heights, and it will certainly end up with the largest number of platinum games in Japanese console history. Few expected this from a handheld. Even fewer would have predicted this of the DS specifically, which was initially ridiculed as a gimmicky stopgag to hold off the PSP while prepping for the launch of a GBA2 and now has wound up as the surest successor to the PS2 that the market could possibly have created. Most publishers anticipated the PSP would be the victor in this handheld battle, and the software support provided by third party publishers has matched those expectations. But somehow, incredibly, Square Enix seems to have predicted, to some extent, this seismic shift within the industry and allotted its resources appropriately.
Traditionally, no one aside from Nintendo has meted out full console-level support to its handheld platforms--and by "console-level support" I mean something specific in high budgeted, heavily marketed games made by top- and second-tier teams. For everyone else, the systems were largely a dumping ground for lesser works and trainee projects. Square Enix early predicted that the PSP would lose to the DS, and accordingly meted out GBA-level games, the sort of stuff that was good, but not altogether out of the ordinary. However, the company quickly reacted when the DS began to transcend the traditional limitations of handheld gaming. Soon Square Enix was delivering true console-level games (the sort of products that just a year earlier would have wound up on the PS2): an innovative new franchise headed up by rising star developer Tetsuya Nomura; a sequel to a numbered, main series Final Fantasy game headed up by the director of FFX-2; full remakes of main series Final Fantasy games by the same team that did the PS2 remake of Dragon Quest V; and, of course, the crown jewel in this shift, the latest numbered installment of one of the three multiplatinum franchises... Dragon Quest IX. And who knows what else is on the horizon?
The move is yielding impressive dividends for Square Enix. It's already seen two million-selling games on the DS, which at least one more guaranteed to also reach that platinum status. If the company plays its cards right, it could have as many million-sellers on the DS as it had on the PS2--unprecedented, especially considering that they had not a single one in Japan on the GBA (Dragon Quest Monsters went from selling little over five hundred thousand to topping 1.4 million). With this, a period of development that would normally see Square Enix at its lowest financially instead has the company riding high in the public's eye... not to mention that as long as the DS continues to print money, they're free to take as long as they want cultivating the release of their high production value console sequels and mull over future plans as the market shakes itself out.
No other company (other than Nintendo, natch) has seen the success Square Enix has on the DS. So could this strategy have worked for other companies in need of a next-gen transition, like Konami, Capcom, or Namco Bandai? Sure... if they had taken the gamble early on and put the requisite effort and resources in.
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