Square Enix wants to launch better games by making fewer

We've often heard Square Enix say quite a few of its amazing games have disappointing sales numbers despite selling millions of copies. It was kind of funny at first, but the astounding amount of lay-offs and studio closures the last few years have shown why the Japanese publisher wanted and needed more. Games like Final Fantasy XVI have enormous budgets, and even smaller ones like Octopath Traveler II have become increasingly more expensive to make, so the company has been forced to make a choice that will please some of you and make others worried.

Square Enix has released the transcript from the financial results briefing it had last November, and president Takashi Kiryu makes it sound like we should expect fewer, but better, games moving forward:

"Q: Has the way that your development function has spread to cover so many bases made controlling your development efforts more difficult?
A: It has less to do with our development function and more to do with the numerous entries in our lineup. I want to structure our development function so that we are able to ensure higher quality from each title by slimming down our lineup.

Q: Why have you been unable to slim down your lineup until now?
A: As our customers' needs and the types of devices available have diversified, we have tried to produce hits by developing a wide variety of titles rather than by focusing only on certain ones. I believe that this has resulted in the splintering of our resource pool. Meanwhile, there have been clear winners and losers among the major titles released recently in the gaming market, and it has become possible for even indies titles to make their presence felt. The market is increasingly polarized between blockbuster and indies titles, but I feel that we have developed many titles that fell somewhere in the middle. I want to make clearer distinctions going forward."

My interpretation of this is that Square Enix wants to focus on games with either smaller or giant budgets, not titles that are somewhere in-between. That's not to say Square Enix will make the same kind of game over and over again, as Kiryu-san said the following shortly before the aforementioned part:

"Q: As you consider the broad strokes of your next medium-term business plan, what do you think that you currently lack but will need in order to achieve sustained growth? To fill in such gaps, would you potentially consider investments such as M&A activity or other inorganic investments?
A: I will cite two points on which I find us to be lacking. The first is the limited diversity of our title portfolio. Because we possess strong IPs like the Dragon Quest and Final Fantasy franchises, I believe that we have tended to be overly reliant on certain gameplay styles or genres. Meanwhile, the tastes of customers in the gaming market have diversified, and customers have come to enjoy content from a variety of genres. Moreover, blockbuster titles are not the only ones that enjoy popularity. For example, our title "PowerWash Simulator" is somewhat of an outlier in our portfolio in that it is a game well suited for casual play, but we have been able to steadily build up our earnings from it. For these reasons, I want to increase our development proficiency by strengthening our internal development capabilities so that we are able to achieve greater diversity in our title portfolio. I would also not rule out inorganic means as an option for strengthening our internal development capabilities.
The second point where I see us lacking is in our marketing. Not only is content increasingly being sold digitally, but the range of devices capable of delivering content is also diversifying. I want us to establish stronger capabilities that enable us to market efficiently in that environment. Because our portfolio has included strong IPs like the Dragon Quest and Final Fantasy franchises, we have tended to focus our resource allocation on content development. Going forward, however, we need to strengthen our publishing function, which manages our marketing. I want to focus on putting the right capabilities in place in that domain, which will also involve some hiring. I plan to go into specifics on these two points in our forthcoming medium-term business plan."

Long story short: Square Enix wants to game fewer games itself, and instead diversify its output by help other studios' projects by publishing them. Does this sound like a good plan?