Final Fantasy VII Remake Turns Classic 1990s Game Into a Billion Dollar+ Product
On April 10, Square Enix released Final Fantasy VII Remake. This game was based on the 1997 hit PlayStation title. Rereleasing classic titles is not new. However, what Square Enix is doing with Final Fantasy VII Remake is taking a historic franchise and making it into a billion dollar plus product.
Upon its release, Final Fantasy VII was seen as a key driver for the first PlayStation system. At the time Square, along with then competitor Enix, had the best-selling role-playing titles in Japan with the Final Fantasy and Dragon Quest franchises. Both products were exclusive to Nintendo.
In 1996 Nintendo was taking the world by storm with its Nintendo 64 system and pioneering 3D games with Super Mario 64. However, Square was not satisfied with the limited cartridge-based storage system of the Nintendo 64. They needed the larger storage space of CD-based systems like the Sony PlayStation (the game launched on 3 discs).
When Square announced they were publishing for the PlayStation, Nintendo was not happy. In a bit of cutting off the nose to spite the face, Nintendo refused to allow Square to publish for Nintendo systems. The companies eventually made up, but for many years Final Fantasy products were exclusive to Sony platforms.
With Final Fantasy VII Sony knew they had a huge success in Japan. However, they were also confident that FF VII could be a huge hit in North America and Europe. Sony helped Square with marketing by flooding tens of millions oi dollars into Western marketing campaigns.
The marketing worked. Final Fantasy VII had sales over 10 million units with over 50% of those sales outside Japan. Prior to the success of FFVII, Japanese role-playing games (JRPG) had niche sales in the U.S. and other Western markets.
Despite many sequels and spinoff products, the Final Fantasy franchise has struggled to reach the heights of Final Fantasy VII. Final Fantasy VII Remake could change that and is an exciting indication of the potential for all the older Japanese video game companies.
A week before Final Fantasy VII Remake launched, Capcom released Resident Evil 3, a remake of a 1999 game. Like other Resident Evil remakes, the title is doing well but is not earth shattering.
Final Fantasy VII Remake is different because it is not so much a remake as an entirely new game. It takes the original as a basic template. From that template it adds new storylines and significantly changes the game play elements. This was a title with a large budget that was years in the making.
Most importantly Final Fantasy VII Remake only tells part of the story. The original took over 100 hours to complete while most are claiming the remake is good for about 30 hours. Clearly there will be a Final Fantasy Remake Part 2 and possibly more.
The game launched exclusively for the PlayStation 4. Coronavirus impacted physical distribution and the game was delayed a month from its scheduled early March launch. Nevertheless, reviews have been excellent, and it is clear the game will be a major hit.
In terms of sales, Final Fantasy VII Remake is just getting started. Not only is there potential for additional parts, but the game can be released for other platforms. This not only includes the upcoming PlayStation 5, but PC and possibly Xbox platforms once the PlayStation exclusivity window ends.
Final Fantasy VII Remake is a key indicator of one of the most important trends in the video game space, the nostalgia factor. Maturing gamers like to revisit the products of their youth. In addition, with proper updates, these products can be marketed to a new audience.
DFC Intelligence has been working with investors to understand the value of classic game franchises. This is crucial because a game like Final Fantasy VII Remake is a major investment. This was not a quick cash-in.
The good news for Square Enix is that this investment will pay off. Over the next years, Final Fantasy VII Remake will easily generate over a billion in revenue.
DFC Intelligence is currently hosting calls with both institutional investors as well as individuals and companies looking to get some understanding of market trends.
Contact us to schedule a consulting call and hear our current thinking on the video gaming and digital entertainment space.