Outline of Tokyo Game Show 2011 Keynote Speech held on September 15, 2011

*This keynote was made by the president and CEO of Square Enix Holdings in his role as chairman of the Computer Entertainment Supplier’s Association.

(Continued from previous page.)*

Furthermore, in the first half of the 2000s, the specs for iMode capable cell phones grew remarkably.* Cell phones are not bought with the intention of playing games, but rather for communication. But they can play some great games. Here, we reached an era where games could be played on general purpose devices. When this happened, the necessary investment needed by consumers to play games was reduced even further.

The next watershed came in 2007. It was in 2007 that all the game consoles became connected to the net. And, it was when the iPhone debuted. You could play games on both dedicated consoles and general purpose devices- thus, the necessary investment needed by consumers dropped to zero. Of course, up to this point, the PC as a general purpose device could play games, but in the first half of the 2000s if you talked about the PC you needed a pretty strong CPU, GPU and a ton of RAM, in other words if you didn’t have a special machine that's beyond what you typically needed for non-game applications, you wouldn’t be able to play games. Thus, the “gaming PC” was a type of dedicated game console. And this began to change in the first half of the 2000s. And while I'm repeating myself, I want to highlight that it was not as though dedicated devices were replaced by general purpose devices. Both dedicated devices and general purpose devices have their own benefits. Rather, the market expands in compounding layers similar to geologic stratum- but the platform driving growth changes. And thus, in the period after 2007, in this new network-connected world, it was neither the general purpose device nor dedicated device which drove growth, because the physical device was not the platform; we entered an age where the network itself was the platform. Both general purpose devices- iPhone, iPad, Android, etc.- and game consoles made the network their platform. Consider the PlayStation Network (PSN), Xbox LIVE, and Nintendo. The undercurrents began to shift toward the network as the platform.

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