After first taking the stage, Wada joked that he "had absolutely no surprises in store," eliciting laughter from the audience. He then gave an overview of the current state of the worldwide game industry, which is now worth an estimated 1.9 trillion yen (about $16.3 billion) annually. Despite some analysts' gloomy predictions, international retail games sales have expanded an average of 9.3 percent annually over the last four years. If income from online games is added to the equation, that growth rate shoots up to 11.9 percent. "You will not find any other segment that enjoys such high annual growth," he told the crowd confidently.
Ironically, given his position, Wada has been a longtime vocal critical of the game industry in Japan. In his hour-long speech, he once again stressed the sector's need to move forward. His message was clear: Wada feels there is a lot of potential for growth in the ever-changing game market--and publishers must take advantage of this, or be left in the dust.
"Games will have to cater to a much broader spectrum to succeed," he said. "The crisis in the game industry is not volume, but quality. As far as volume goes, there is no need for concern. If you take a business-as-usual approach, there will be a crisis."
The executive's thoughts on untapped game markets seemed to echo those of Nintendo, which is attempting to reach out to non-traditional gamers with its Wii console--and already has with its DS handheld, which is extremely popular amongst diverse age groups in Japan. He said that although people associated games with teenagers, 50 percent of men and two-thirds of women under 40 want to start gaming.
From there, Wada gave a brief overview of pivotal events in Japanese game-business history, such as how the original PlayStation's introduction of discs as game media slashed production costs. "The appearance of the PlayStation has created a richer system for game [production]," he said. "SCE has brought down the cost of the hardware, and they have redistributed the savings rather well to their customers."
Wada then mentioned how the proliferation of increasingly complex electronics makes virtually any device a potential game platform. "I think the industry can respond to this challenge, as all kinds of devices are available," he declared. "Devices found in living room, in your office, and on your desktop can be used for games. Games will be available in all aspects of your life. Thus we see a wider range of people, such as females, with a growing interest in games."
However, going after that wider audience means a fundamental rethink on how games are made, according to the executive. "In the past, game users were young men," said Wada. "We have to grasp the needs of new customers, as lifestyles differ from customer to customer. We need to choose what is best for them. Until now, gaming machines were specialized devices. From now, almost every electronic device will be able to play games. There are great possibilities, but it will be very challenging for developers, because each machine will require different programming.
The Square-Enix chief also said that soon, games will no longer be confined to the flat screen. He gave many futuristic possibilities for graphics, such as the projection of images on retinas, output through robots, laser beam graphics, and holograms.
However, in the nearer term, Wada sees the biggest advances coming from networked gameplay over the Internet. "Communication with certain rules is what games are all about," he proclaimed. "Until now, only creators produced content. From now on, though, users will also produce content, and consumers can join game-creation networks." This, in turn, will change the emphasis of development itself. "The community itself may soon become the value of the content," he said.
The key to this new online paradigm, Wada asserted, was the massive exchange of data now possible between gaming machines. That, in turn, will also allow for "a historic change in cost" via digital distribution of games and new business models such as scalable pricing. "There are huge opportunities in the game market, but these require huge changes from the publishers," Wada concluded.
