How Square Enix Montreal is making the leap to free-to-play mobile games

Square Enix has a lot of important game franchises, including Final Fantasy and Tomb Raider. But not all of those franchises are available on mobile devices.

Square Enix Montreal started out with premium mobile games that users paid for ahead of time at a fixed price. But the whole mobile market moved away from premium to free-to-play games. It hasn’t been easy for Square Enix, which is focused on PC and console games, to get the skills to be competitive in mobile.

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But making that transition is important, as mobile games are the largest chunk — $70 billion — of the global $137.9 billion global games market. And the responsibility for getting good in mobile falls on Patrick Naud, head of the Square Enix Montreal studio.

I interviewed Naud at the recent Casual Connect Europe in London.

Here’s an edited transcript of our interview.

Patrick Naud: I’ve been in the game space for the last 20 years, and the last six on mobile. You see how this business matured, how the mobile industry matured. Consumers are looking for better and better experiences. That’s stimulating for us as developers, to craft something for that new audience.

GamesBeat: At some point you converted from console to mobile?

Naud: I come from Montreal, where everyone started at Ubisoft or at Electronic Arts. One of those two. We all came from there. But at one point we had the opportunity to move to mobile, and actually tablet. Back then it was mostly focusing on tablet. You could see that the power of a tablet was coming on par to console. What kind of experience could you do with that? We made the switch about five years ago.

I spent 14 years at Ubisoft on the console side and then came on to start this new strategy in late 2011 or early 2012. I spent a year in the Square Enix group, and then there was a major shakeup. We didn’t meet expectations. Back then it was Tomb Raider, Sleeping Dogs, a lot of changes. I think what everyone realized is that the whole portfolio at Square Enix was geared toward third-person action-adventure games for consoles: Just Cause, Tomb Raider. It was all the same type of game, the same type of audience. So how do we diversify? That’s why we were asked to take on the challenge of mobile.

GamesBeat: Structurally, among all the things in Montreal—were you always a distinct startup within Square Enix?

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Naud: It was started by our friends at Square. The group has two studios in Montreal. There’s Eidos Montreal, focusing on console, and Square Enix Montreal, focused on mobile.

GamesBeat: So there’s always been that division.

Naud: Right. It was to grow Montreal on a human scale. We could have two relatively big studios, but not one massive ones. Square loved Montreal, loved the talent in Montreal, and they wanted to keep growing in Montreal without having to go to a single thousand-person studio. We wanted to keep that human scale. Right now the mobile side is 55 people, going on about 75.

We’ve converted the whole studio from premium. The years of Hitman Go and Lara Croft Go were amazing. They helped us understand mobile and transition from premium console development to premium mobile development. In the past two years we were heavily converting Hitman: Sniper from a premium game to more of a live game. We’re making more revenue now from in-app purchases than from downloads. It’s helped the whole studio to make that journey, to move into the free-to-play space, to move into live ops space. We’re taking the freemium approach in all of our next games.

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GamesBeat: That part of the Hitman talk was interesting, about all the different kinds of experimentation.

Naud: We’re very honest about it, very canny about it. We grew up through these five years on mobile. We were not experts. We tested things out. Maybe it worked. We’re sharing our experience. We’re now at a stage where we believe we can do it. We can embrace free-to-play. The whole mindset of the studio is still the super-strong DNA of crafting something unique and different, reinventing genres the same way we’ve done in the past, but with a mindset that these are games we want people to play for years.

GamesBeat: Were there other pioneers that helped to teach you free-to-play?

Naud: It starts from us coming to events like these and just absorbing everything, understanding all the theory, and starting to implement it. We have to learn from our mistakes. We’ve brought in experts like Jeff, who gave the talk earlier. We’ve had monetization experts, economic experts. We work to the best of our knowledge, but we’re missing some knowledge. When we bring in these people, we grow the global mindset of the whole studio.

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GamesBeat: Sniper rifles seem like a very popular item these days.

Naud: It’s a game that no one else has been able to clone. It’s a strong experience in itself. There’s a depth of gameplay. The scene is fully scripted. There are 40 different characters that navigate the environment. You can interact with the scene and puppeteer the scene the way you want. No other game offers that. It’s performing better and better as more people get into the game. Year three was better than year two, which was better than year one. We’ve been constantly growing the game.

GamesBeat: What else are you able to do now? Are you spinning up more examples of this, new franchises?

Naud: I can’t really talk about any of our next projects. But the focus is that new projects we’re working on right now were designed from the ground up to be free-to-play experiences, to be designed a certain way so that we think about how our players will stay in the game for longer. How can they play this game for two, three, four years? With a premium game, we’d design a game as a finite experience. There’s a beginning and an end. You might want to replay it, but that’s the extent of retention. Now, how do we build experiences from the get-go that can be played for years?

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GamesBeat: Is there a logical effect where you narrow down what you’re doing to one or two things that you do very well for a long time, then? I’ve been watching EA make fewer and fewer titles, but bring in more and more revenue from games like Madden and FIFA through live services. It takes enormous resources to create these year-round, long-lived games.

Naud: Hopefully at one point we’ll get there. We’re starting from very far back. We have a few different games in development. The idea, again—you never know until you soft launch and see how it performs, how consumers play it. Are we appealing to the consumers we thought we would? Maybe some of them won’t work. But the goal is to obviously have games that we’ll be able to maintain and grow for five, six, seven years. Hitman: Sniper has been live for three years. It was designed for that. I hope we’re able to craft experiences that would be able to play year-round. If you look at the top-grossing charts, you see games that seem to have been there forever.

GamesBeat: You have the good fortune of having these brands available to you.

Naud: The brands help. It’s a strong accelerator. Not only are people fans of these IPs, but you get automatic recognition. Even if you’re not a fan of Hitman, you know about Hitman. It’s part of gaming culture. People know that and support us a little more. It’s the circle of awesomeness, is what we call it. The better we do with a game, the more people support it, the more Apple and Google support it.

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GamesBeat: Every now and then we still see examples of companies that don’t quite get free-to-play right, what fans will accept. EA had their loot boxes. Harry Potter had a pretty harsh paywall in the first 10 minutes of gameplay. In some ways it still surprises me, but in other ways it reminds me just how hard it is to pull off something in free-to-play that satisfies your fans.

Naud: And on the other end, it’s also part of our DNA, and the wider Square Enix DNA – not only us in Montreal, but others around the group – how can we make great games first? Before we make games that monetize, how can we just make something that people are passionate about, that brings them to the game on a regular basis, that they want to talk to their friends about? They’re more likely to monetize because of this, rather than being hit with a paywall. A paywall is short-term revenue. We’re focused on making amazing experiences.

When we take on a new genre, the way we did with the Go series, or a new treatment of an old genre, we want to make sure that it becomes the reference. We believe that by doing that, by making amazing games, we’ll monetize in the long run. That’s not the approach that every publisher is behind, but we feel like this is what we’re good at, so we’ll focus on that aspect of development.

GamesBeat: Is there a clear distinction for you in that area? Like pay-to-win is not okay but cosmetics are?

Naud: Just call it respecting our players. Square Enix is a beloved company for a reason. Catering to what our players want, what they feel, that’s more important. It’s long-term thinking. That will help us win in the long term, rather than trying to go with the more evil approach. [laughs]

GamesBeat: There’s a lot of evil out there.

Naud: Yeah. We don’t need to be a part of that.

GamesBeat: In some ways, the thinking used to be that you’d just re-create a console experience on mobile, because mobile was getting more powerful, more able to handle the visuals.

Naud: That’s not the approach. Sadly, it still works in some ways. There are some games that are cloned or ported, let’s say, like Fortnite. But the mobile version doesn’t match up to the original version. People are getting used to subpar experiences on mobile. As a developer and as a player I can’t understand why you’d do this. There might some money in it, but that’s all.

That’s why, in the Go series, the question was, “What are the pillars of these brands? How can we craft an experience that caters to the mobile device, to the mobile player, to the mobile experience?” It has a mobile gameplay loop. You don’t play for half an hour at a time. You play 12 times a day for six or seven minutes. The game needs to reflect that behavior. I feel like this is the best approach for a quality mobile game.

Ideally, we’ll have as little porting the game with thumbsticks as we can. The mobile port never compares to the original. We think our mobile players deserve better.

GamesBeat: It almost seems like Fortnite is more of a tech statement, that Unreal can do the same game across all platforms.

Naud: Yeah, but you can still see it performing well on the business side. Even if you have PC players that are a lot more agile playing against mobile players—again, I’d like to understand who is playing Fortnite on mobile and how they’re playing it. My theory is that they’re already fans of Fortnite, that they’re already playing on PC. They’re just happy to be able to play in between their classes or on the bus going home. That’s a testament to the fact that our mobile players are looking for great experience, and that’s why we need to cater to them.

GamesBeat: It still seems like a very small team that you have compared to some others that are out there. Do you operate in very small groups?

Naud: Yes, but it’s also a very different approach. Because we’re focused on creating that experience first, we start—up until soft launch, we never have more than five or 10 people. Once a game starts performing, it’s easier to add people. You can scale production. You can’t really scale conception. It’s not as if conception will go any faster because you added twice as many people. That’s not how it works.

It’s about fostering that creative mindset. The idea is to craft something different, something unique, something that will become that reference. If we were to make a match-three game, it would feel different. You’d see other games based on the approach we came to.

GamesBeat: You guys are part of a triple-A game company. Do you think of this as applying triple-A to mobile, or something else?

Naud: No, no. I think we’re unique. We do have that triple-A production quality mindset and the big IP, but at the same time we operate more like indie developers. We have smaller team. Everyone contributes in a lot of different ways. Everyone wears a lot of hats. But because of that, everyone is very engaged in the product. I think it’s the best of both worlds.

When you add in the economic and monetization experts that have joined our team—I have a French word in mind, but it’s not quite right. [laughs] We have the creative mindset around crafting something different, and we’re working hand-in-hand with the monetization people to see how we can make it a profitable experience. So far it’s been very interesting. I’m pretty sure that we’re among very few in the industry taking this route.

GamesBeat: The NBC Universal people are doing this contest now with their lesser brands like Jaws. They’re offering a $250,000 prize to indie games. Their theory is that normally, Hollywood companies would turn to sort of double-A developers to get these kinds of games out, but they felt like there wasn’t enough creativity there anymore. They wanted to harness the creativity of indies with these big brands that anybody knows. It’s interesting that you also mentioned having that kind of indie attitude.

Naud: I don’t want to generalize, but when you start to work on bigger and bigger projects – teams of 50, 70, 100, 200 people – it becomes a production. How do you manage the work for all these people? It’s no longer just working on a game. Instead of everyone coming to work every morning to work on a task, our people are working on a game. It’s a completely different approach. Sometimes I feel like an alien saying this, but that’s why I decided to make games in the first place, and why I’m still making games today.

GamesBeat: Have you find this approach to be a hard sell or an easy one inside the company?

Naud: That’s the great thing about Square Enix. They encourage us to try things, to take risks. They were very supportive. “We’re going to make a Hitman game, but it’s going to be turn-based, like a board game with figurines.” The initial pitch for Hitman Go—people might have said, “That’s a Hitman game?” But they were encouraging. They pushed us to go further and be bold about it. All the projects we’ve done have been projects we believed would work. Everything we’re working on in the future is what we believe will work.

Right now Square Enix believes very much in mobile. Phil Rogers is stating officially that we want to grow mobile in the U.S. We want to see if there are potential partnerships we can make or find opportunities for new studios. There’s a lot of confidence at Square Enix in the mobile ecosystem.

GamesBeat: As you grow, are you adding more triple-A developers, or finding mobile people?

Naud: It’s not really about triple-A or mobile people. It’s people who want to work in mobile. When we talk about small teams and motivated, mobilized people, they need to believe in the product they’re making. Sometimes it’s triple-A console people who need to do something different.

That was my mindset, where I needed to try something different. I got into mobile and was impressed by everything I needed to learn, but also by the challenge. How can we take the triple-A mindset and apply it to mobile? There were opportunities there because there weren’t that many people doing it. It’s been an interesting adventure.

I feel like this is only the beginning. We’ve had massive critical success, and now, with the whole mindset of the group changing and embracing free-to-play, designing games that will be live forever, we have great potential to make revenues at the same level as that critical acclaim. Even for a company like Square Enix—we’re a major player in the mobile space worldwide because of our strong performance in Japan. Right now there’s more revenue out of mobile than in console. That benefits a company like Square Enix.

GamesBeat: How do you balance games made externally versus games made internally as far as mobile?

Naud: We have two different tracks. Montreal, internally, this is what we’re going to do. This is what we’re good at. The London studio will work with external partners. The idea is, how can we find external partners that have the proper approach for our IP? We’re finding the right partners to work on our IP, not just designing a game and then looking for the cheapest developer to execute it. I feel that’s how you should engage with the developer, the company that takes on that challenge. They work on your IP and they feel like they can make a difference.

Disclosure: Casual Connect paid our way to London. Our coverage remains objective.