Square Enix still sees "tremendous potential" in AI but is wary of the "many risks involved"

• Square Enix CEO Takashi Kiryu has noted the "many risks" involved in AI use, taking a more reserved approach than earlier in the year
• The subject of generative AI as a creative tool is an "extremely delicate" one

Square Enix’s latest shareholders' meeting brought with it an updated statement on the Japanese studio’s AI ambitions, changing tack from "aggressive" to being much more risk-averse.

In the meeting held on June 21st, Square Enix CEO Takashi Kiryu’s comments were more user-conscious as regards generative AI in particular, noting that while the technology offers "tremendous potential", there are also "many risks involved".

It’s a change of tone from Kiryu’s letter this January where he spoke much more optimistically about AI, having suggested the tech could be used towards developing, marketing, and bringing "new forms of content for consumers".

Now, as reported by Automaton, Square’s stance on generative AI appears to have soured somewhat, at least in a creative sense: Kiryu shared in the meeting that he might be "changing course", commenting that AI’s creative use is an "extremely delicate" subject with customers.

Keeping up with trends

This isn’t the first time Square Enix has tried to ride the trendy tech wave; before AI it was blockchain, which former president Yosuke Matsuda believed represented "a new business domain" with "the potential to create new forms of gaming content".

Square created an NFT ecosystem with Animoca Brands in 2022 and despite pivoting towards AI since, their game Symbiogenesis continues to run. Square also invested in Web3 games platform HyperPlay as recently as March 2024.

The latest meeting has reaffirmed AI as the current direction of travel, albeit a more cautious journey than was laid out in January, as Kiryu explained to shareholders: "AI itself has tremendous potential. However, there are also many risks involved. We have introduced a flow whereby AI-related tools are used internally only after being properly examined."

These various strategies come as Square attempts to remain a big player in the video games space, but coincide with the closure of many mobile games, a 69.7% fall in yearly profit, and abandoned projects to greater focus on its most important new games.

Square Enix does, at least, have its own geolocation hit in Dragon Quest Walk, which outearned Pokémon Go in Japan last year.