square-enix-logo

Square Enix's 15th Anniversary - The Good, The Bad, and The Ugly

Written by

Published: April 1, 2018 1:00 PM

Back in good ol' April of 2003, a relationship developed between two companies: Square and Enix. Though rivals, they noticed something appealing in one another. Enix strictly published video games while Square focused on developing them with a team of programmers, graphic designers, and professional story writers. Since 2000, the idea of a merger had been discussed, but it took some time for the companies to commit to each other (for good reason, of course.) Sure, there were some bumps in the road and red flags, but the partnership of a developer and a publisher ought to be a clever move financially, right? It’s been a whopping fifteen years since the two tied the knot. Let's take a stroll down memory lane and a gander at what the united company has endured since.

Both Enix and Square were founded in Japan around the same time – Enix in 1975 and Square later in 1983. Enix was larger than Square and ensured buckets of money, but lacked success in America. Square, however, had pull with their widely known RPGs (you’ve heard of the Final Fantasy games, right?) Without a doubt, both companies possessed their own areas of expertise. Thus, the discussion of a merger was in the midst in 2000, even though rivalry existed between them.

ff the spirits within square
Um, you're kidding me, right?

Unfortunately, the humiliation of Square’s film Final Fantasy: The Spirits Within took an immense financial hit on the company in 2001. Due to these ill-fated circumstances, Square’s loss of money caused Enix to slam the brakes on committing to Square. It’s all about the money, folks. Luckily, Final Fantasy X was released in Japan shortly after the disastrous movie and had major success with more than 1.9 million units sold. Even with the triumph of FFX, Square was still hurting financially. Sony then swooped in to aid some of the economic turmoil, considering they assisted with the production of The Spirits Within. It was only fair that they pitch in to cover some of the damage costs.

By mid-2002, the riveting adventure of Final Fantasy X had shipped over four million copies worldwide and Kingdom Hearts was racking up the numbers with its official release in Japan. While Square was confidently brushing off their shoulder and recovering from their financial crisis, Enix began to notice how appealing Square was shaping up to be. Thus, the discussion pertaining to intertwining the two companies was on the table once again. Naturally, doubts began to rise. Yoichi Wada, Square’s president at the time, even stated, “This is an offensive merger. Square has also fully recovered, meaning this merger is occurring at a time when both companies are at their height.” After going back-and-forth due to hesitations and concerns, the competitors finally decided it was time to say “I do” and leap into the future together. Therefore, two became one, forming Square Enix Co., LTD on April 1st, 2003.

business strategy square enix
It's all about the two franchises that molded Square and Enix into everything they once were.

After getting hitched, business tactics were scribbled out to organize the aspirations of the newlywed’s future. According to Square Enix’s 2003 Business Strategy model, their main objective was to become a state-of-the-art leader in the gaming industry by means of their creative brilliance. The release of new Final Fantasy and Dragon Quest titles was in the pipeline, but expanding into the online community also piqued their interest. Final Fantasy XI (2002) and Final Fantasy XIV (2013) are prime examples of SE delving into the online gaming world, even if they weren’t much to write home about at first.

In 2005, Square Enix basked in existing as the number one game seller in Japan. The core of SE’s plan, however, revolved around emphasizing “polymorphic content,” meaning they’d widen their horizons and deliver their varied product on multiple platforms. Compilation of Final Fantasy VII is a key illustration of such projects. Alongside the adored video game, spinoffs of Final Fantasy VII began to surface. The production of the animated film Final Fantasy VII: Advent Children and the PSP role-playing game Crisis Core: Final Fantasy VII are two well-known titles currently encompassed within the compilation. Other notable examples polymorphic content include Enix’s early project Fullmetal Alchelmist and SE’s Invalice Alliance, which was started back in 2016.

ffx ffx2 square enix
Final Fantasy X was an instant classic, but do you remember how impossible it was to get 100% completion in Final Fantasy X-2?

Square Enix’s heavy concentration on role-playing video games molded them into being widely-known for their captivating storylines and fascinating character development. Though Final Fantasy X was a polished RPG before Enix came along, Final Fantasy X-2 was one of the earliest games SE developed as a united front. FFX-2 colorfully painted the adventure of three female protagonists – Yuna and Rikku returning from FFX and Paine as a new badass ally. Though cheesy and extremely girly, FFX-2’s reception proved to be mostly optimistic. In Japan of 2003, over 1.94 million copies of FFX-2 were sold, making the sequel the highest-selling game of the year.

The Dragon Quest games were also a fan favorite brought over from Enix, featuring a hero out to save the world from peril assisted by an array of sidekicks. Primarily, Square Enix targeted Nintendo consoles for the Dragon Quest games, so many were ported to the Nintendo DS post-merger. In 2004, SE remade the treasured Dragon Quest V for the PlayStation 2, switching gears from Dragon Quest's usual Nintendo port. According to a poll that 10,000 Japanese gamers had participated in, the Dragon Quest V remake landed the number one spot while Final Fantasy VII took second place for their favorite PlayStation game. Can’t deny the facts, ladies and gentlemen – Square Enix has a history of creating radical video games.

Of course, not everything is rainbows and butterflies. Before the marriage between Square and Enix, an interview was conducted with Final Fantasy creator Hironobu Sakaguchi. Though the interview mostly entailed talk about Final Fantasy: The Spirits Within, a question came to light inquiring if Sakaguchi was concerned that Square may become too reliant on the Final Fantasy name. His response was actually quite thought-provoking, “Avoiding that has actually been one of Square's goals for a long time. It is our aim to try and develop a few more major franchises for the company; that has always been on our minds.

nobuo uematsu 4
Nobuo Uematsu - the brilliant composer of many Final Fantasy soundtracks. No, seriously, they're freaking amazing.

Numerous fans challenge the idea that ever since Sakaguchi decided to take his leave in 2004, the franchise hasn’t been the same. The departure of Nobuo Uematsu, composer of early FF game scores, in 2004 also raised some eyebrows. Uematsu claims, “it’s not like I had any issues with Square Enix. I just wanted to work at my own pace. I'm leaving the company on good terms.” The talented Uematsu now has his own independent studio. Though occasionally he does share his musical talent with Square Enix, his works of art aren't nearly as involved in the Final Fantasy franchise as they once were. Dagnabbit, anyway.

Even though some feel that Square Enix is oversaturated with Final Fantasy games, they have done their darnedest to increase their global reach by procuring other companies and their diverse games. In March of 2004, SE obtained mobile application developer UIEVolution and then sold it a measly three years later. When 2005 rolled around, they up and purchased Taito, a gaming developer and publisher (does Space Invaders ring a bell?). Though several acquisitions have come and gone, many believe that Square Enix’s smartest move was absorbing Eidos in 2009. Popular video games developed by Eidos include Tomb Raider, Hitman, and Deus Ex. Yoichi Wada stated, "Eidos' products are highly complementary to our business and will accelerate our aggressive expansion into Western markets." The arrangement was official April 2009, with Square Enix concluding on its £84.3 million ($120 million) procurement of UK-based Eidos.

new management square enix
Wada had his time as king, but it was time for a brighter future for Square Enix.

Unfortunately, the absorption of Eidos didn’t exactly pull Square Enix out from the grave they were digging for themselves. Square Enix’s financials have been a total rollercoaster and certainly not in an exciting way. One particular chaotic example pertains to Tomb Raider in 2013. Within a month of its release, Tomb Raider had sold 3.4 million copies according to SE’s financial report that fiscal year. To break even, that number would have to climb to five million, though Wada had his fingers crossed for six million. Yikes. It isn’t rocket science. If a title sells 3.4 million copies in a month’s time and that number still doesn’t reach minimal standards, there are some severe management issues that ought to be taken into consideration.

After thirteen years of being senior executive at the company (twelve as its CEO), Wada “stepped down” subsequent to the company revisiting its financial forecast in 2013. In a nutshell, the company's financial state wasn’t a pretty sight. Square Enix claimed replacing Wada was a part of a financial modification for the company, stating they now “expect to incur extraordinary loss in the settlement of the account for its fiscal year ending March 31, 2013.” Replacing Wada was current representative director Yosuke Matsuda. Many hoped this change in management would benefit SE on every facet it currently failed at. Naturally, to repair what had already been damaged would take time.

In 2016, The Rise of Tomb Raider and Just Cause 3 pulled in solid results for Square Enix. The two titles were specifically called out as “top performers” in the console category. Of course, the company’s financials were top priority. SE racked up a 27.5% increase of sales compared to its previous year, and their profit was snowballing as well, demonstrating a 102.3% growth year over year. Their online-based games, such as Final Fantasy XIV and Dragon Quest X, were also sustaining their strong performances. Later that year, the company had major titles in the pipeline, including Final Fantasy XV, Deus Ex: Mankind Divided, and Rise of the Tomb Raider (PS4). Ah, yes. Things were finally looking up for Square Enix.

Final Fantasy XV (PS4) significantly climbed Japanese gaming charts during its first week of release, retailing 690,471 units. Director Hajime Tabata shed light on how Final Fantasy XV has already broken even with its development costs and how it managed to do so on the very first day of launch (November 29, 2016). An interview with Enterbrain (a Japanese brand publisher) president Hirokazu Hamamura in early 2018 revealed that FFXVsold 7 million copies in the world, so it seems to be a huge success.” Though fans weren’t overly infatuated with its story, many agreed that Noctis and his boys were the game’s heart and soul. Just recently, the gorgeous escapade even landed a spot on PC (it was only a matter of time, honestly.)

ff7 remake square enix
Wait ... are Cloud's arms REALLY that puny?

Though Square Enix certainly isn’t perfect and a good percentage of people still consider the merger to be a mistake, the company appears to be doing pretty well for themselves as of late. The announcement of Final Fantasy VII: Remake at E3’s 2015 conference brought fans to actual tears of joy, not to mention the next installment in the beloved Kingdom Hearts franchise, Kingdom Hearts 3. Truth-be-told, the Disney-infused adventure may perhaps be released by the end of this year *fingers crossed*. Naturally, no absolute release dates have been set in stone referring to these upcoming fan favorites. We can be confident that Square Enix delivers high-quality content, but the Final Fantasy VII remake raises some concern. It doesn’t take a genius to foresee longtime fans picking apart every imaginable flaw.

Nonetheless, all relationships have their battles, and Square Enix is no exception. Within the past fifteen years, the company has undergone their share of financial dilemmas. However, taking Eidos and other companies under their wing has proved to be a positive impact on SE as a whole. With Final Fantasy VII: Remake and Kingdom Hearts 3 expected in the near future, Square Enix has a reputation to maintain. They’ve put up a decent fight, but only time will tell where they go from here.

No author image supplied
| Staff Writer

I'm so awkward when I have to talk about myself. I'm an avid video game player (obviously). When I'm not avoiding reality in imaginative… More about Amanda