Square built a videogame empire with Final Fantasy. The next target: Pixar.
"Managing a company is a little like a role-playing game," says Hisashi Suzuki. "The object is to acquire money and power. In some ways, business is the most difficult RPG of all."
As president and CEO of the Japanese gaming giant Square, Suzuki thumbs the controls of an empire built on what many consider to be the best role-playing videogames on earth. Square's flagship Final Fantasy series - which launched in 1987 - has sold more than 33 million units worldwide and generated nearly $1 billion in sales. It's also come to define the bleeding edge of the RPG genre, with near-photo-realistic characters moving through a surreal, have-another-hit adventure space. And with each version, Square seems determined to top its previous high score.
Over the years, the company has repeatedly shown its willingness to take risks. The big-screen release in July of Final Fantasy: The Spirits Within was only the opening gambit in Square's ambitious plan to redefine itself as an entertainment company, producing not only games but hit movies. With a $45 million state-of-the-art digital animation studio in Honolulu and a contract with Columbia Pictures to split costs and profits for three pictures, Square is looking to cut additional movie deals.
But already, the perils of Square's celluloid dreams are playing out. The Final Fantasy film took almost four years to make and gobbled up nearly double its initial $70 million budget. Last spring, Square announced its first annual loss in four years.
The stakes are big, perhaps even bigger than Square itself. "If we don't succeed, people will say, 'Japan can't create movies. The creativity is not there,'" says Suzuki. "It sounds like an exaggeration, but I think it's true."
Square's certainly not the only small-screen player gunning for the multiplex. Half a dozen game-based projects are in the pipeline, with Resident Evil the next up, opening around Halloween. Hollywood conference rooms are crammed with sweaty folks pushing movie concepts based on videogames. Says Mortal Kombat producer Larry Kasanoff: "I can't tell you how many pitches I hear that begin, 'OK, you've got a kid standing in front of a console at the video arcade, and then all of a sudden, he gets sucked inside the game... '"
But Square has arrived in filmdom with blockbuster confidence and plenty of computing power. For Final Fantasy, Square pressed into service 167 SGI Octane workstations and nearly 100 02s, lashed to more than two dozen Origin servers. In all, about 50 terabytes of data went into the making of the movie, with the studio drafting 200-plus CGI artists and about 30 programmers from the US, Japan, and Europe.
Square's engineers used Maya - the industry's 3-D standard - souped up with some 100 proprietary plug-ins to create eye-catching skin and clothing textures. Then there's the hair. Some Final Fantasy characters were rendered with the equivalent of 60,000 strands, a point of perverse pride among the company's techies. Kazuyuki Hashimoto, CTO of Square USA, offers this succinct moviegoer tip: "Please look for the hair."
Square plans to incorporate the movie division's technical advances into its games, spinning a cycle of creativity with games inspiring movies that in turn improve games. Final Fantasy X, scheduled to hit US shelves next March, will showcase several big-screen breakthroughs: more emotive facial expressions, better lip-syncing, and, for the first time, voices supplied by actors.
Square's animation team already has begun work on a movie sequel, hoping that Columbia or another studio will give it the green light. Also being floated is the idea to take Aki, the star of the film, and place her in another genre, perhaps a detective story. Square promises that its future celluloid projects, if nothing else, will be cheaper to make.
"Now we know what a 96-minute CGI film involves," says Suzuki. "A second film would take about two-thirds of the time."
Square's long-term goal is to become nothing less than Japan's answer to Pixar, a digital animation studio churning out worldwide hits. While the movie division picks up speed, Square has the luxury of owning a cash cow with perpetually swollen udders: The Final Fantasy game is almost guaranteed to be a huge seller for the next several versions, and the company has ambitious plans to move online, starting with the multiplayer Final Fantasy XI. Within five years, Square hopes to make its film division as large as the game side of the company.
Investors have their doubts, though. "The move into films could be a massive success or a massive failure for Square," says Lisa Spicer, an analyst who tracks the company for ING Barings. "That's been reflected in their share price for the past year. Investors are clearly worried." In May, Square's stock dropped 22 percent in less than a week.
Digital animation is punishingly labor and capital intensive, and the growing demand is driving up the prices charged by top independent animators. This has spurred Hollywood studios to ally themselves with a CGI shop to share development costs. Pixar is tethered to Disney for four more pictures, including the November Monsters, Inc.; DreamWorks bought a majority stake in PDI (now PDI/DreamWorks), maker of Antz and Shrek; and Columbia Pictures has its three-pic deal with Square.
"I think it's a smart business move for a major studio to collaborate with a digital animation studio," says Square Pictures president Jun Aida, who produced Final Fantasy. "Our business model is a lot like Pixar's. Our primary goal is to make our own feature films, not take on other people's work."
Pixar's success, however, wasn't built so much on pixel power as on good old-fashioned storytelling. The lighting and textures in Toy Story were impressive, and the characters moved as realistically as toys can, but the movie didn't win any awards for photo-realism. It was the well-told tale and engaging characters that captivated millions of moviegoers.
"People focus on Pixar's technology, but that's not what makes it a great company," says Kathy Styponias, an analyst for Prudential Securities. "It knows how to tell compelling stories. Companies that try to emulate Pixar without understanding that are going to get their faces ripped off."
At the box office, Final Fantasy: The Spirits Within is no Shrek, much less a Toy Story, but the film has brought convincingly realistic CG characters to a wide audience, and demonstrated what the technology can do. In the end, Final Fantasy may be more significant for what it inspires - a genre of digital film that viewers forget is animation.
As for the future of Square, finding a story to match the brilliance of its technology could transform the company from a gamer into a real player. Final Fantasy's lush animation showed that Square Pictures has the technical chops to play in the big leagues. Staying there may turn out to be a lot harder than capturing the eighth spirit and saving planet Earth.
