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Square Enix chief Yoichi Wada is preparing his firm for the demise of physical media – and potentially the death of home consoles.

In an exclusive interview with MCV that will be published next week, the CEO of the publisher – which now owns Eidos and is famous for its epic disc-based Final Fantasy games – said that a dramatic change will come in the next decade offering more opportunity for market growth, but fundamentally transforming the traditional industry.

In ten years’ time a lot of what we call ‘console games’ won’t exist,” he said.

Wada warned that all the distributors and sales firms will suffer a big negative impact” from a new era in which interactive entertainment switches from software run on hardware in the home to server-based offerings, game streaming and digital distribution.

He claimed that format-holders including Sony and Microsoft are already prepared for the shift – and that third-parties must follow suit.

Somewhere around 2005 the console manufacturers’ strategy shifted,” he said.

In the past the platform was hardware, but it has switched to the network. A time will come when the hardware isn’t even needed anymore.

With that, any kind of terminal becomes a potential platform on which games can be played – that’s exponential growth in the potential of gaming. The potential size of the market is enormous.”

He explained that Square Enix is preparing for this change by ramping up production of social and browser games at its Japanese studios, and also closely monitoring 2010’s beta roll-out of PS3 MMO Final Fantasy XIV.

Social and browser games are going to grow dramatically – especially in areas like Asia which does not have as big a console market,”?he said.