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Square Co., a leading video game software developer, will introduce an electronic entertainment service that will take video game players to cyberspace, where they can communicate with other gamers via an online network, according to the firm’s new president.

Square Co., known for its popular Final Fantasy video game series, is gearing up to launch what it has dubbed the Play On-line project next spring. Under the project, the firm will offer online video game services, chat rooms, shopping and e-mail services.

“We decided to undertake Play On-line last fall. . . . Then in January, we announced that Square will change totally,” Hisashi Suzuki said. “Square will put all its resources — people, goods and money — into Play On-line. We have a great chance to succeed (with the project).”

The 38-year-old Suzuki, who is one of the founders of Square Co., took the firm’s top position May 1. Since it was established in 1986, the firm has grown into a major software company, generating 72.9 billion yen in group sales in fiscal 1999.

Using the new online service, game players will connect their video game console or personal computer to Square Co.’s server via a telephone line, receiving the network-related services in exchange for a monthly membership fee. The proposed network project does not utilize the Internet.

With the firm’s shift in focus to network games, Final Fantasy IX, slated for release on the domestic market July 7, may become the last in the series designed exclusively for stand-alone use.

The popular series, first launched in 1987, has sold 27 million copies worldwide.

The 10th version of the Final Fantasy game, which will hit the market next spring to coincide with the launch of the Play On-line project, will be equipped with limited online functions. The subsequent version will be exclusively for network use.

Taking the helm of the company at a time when conventional video games are beginning to lose their appeal, Suzuki said he is fully aware of the challenges his firm faces.

“The entertainment business is about vying for consumers’ time,” he said. “We have been losing out to mobile phones and e-mail. They take away time (spent on video games).”

The country’s video game industry has achieved remarkable growth by making video games more closely simulate the real world by upgrading the quality of their graphics and sound. That approach, however, seems to no longer be working.

Domestic shipments of video game software dropped 9.5 percent to 352.9 billion yen, compared with 389.9 billion yen in 1997, according to an annual report compiled by the Computer Entertainment Software Association.

Network games, however, have an edge as they enable many players to interact, making them much more unpredictable, Suzuki said.

He acknowledged that his firm’s decision to go online was made “out of necessity” because people are getting bored with stand-alone video games.

“In a sense, we’ve given up on trying to humanize (characters in) machines,” he said.

Suzuki also said he expects the online project to level out fluctuations in the firm’s turnover, which, until now, has been heavily dependent on sales related to the Final Fantasy series.

In response to mounting criticism blaming video games for a series of heinous crimes committed by youth, Suzuki said the games have their flaws and may lead some youth to commit such crimes. But he believes network games may hold the answer to the problem.

With conventional video games, children often play in solitude for long hours and can start over again by simply hitting the reset button, a feature widely blamed for the growing tendency of children to run away from difficulties and inconveniences.

With such criticism in mind, Suzuki said his firm will eventually launch video games that cannot be played without connecting to the network or that have no reset function.

“If video games negatively influence children, we should analyze the problem and rectify it. We must develop video games into something in which many people can find good points,” Suzuki said.

“We want to show that video games have potential and good points. . . . And network (games) are about the only answer we can find at this moment.”