Square Enix
The original Square Enix Co., Ltd. was formed in April 2003 from a merger between Square and Enix, with the latter as the surviving company. Each share of Square's common stock was exchanged for 0.85 shares of Enix's common stock. At the time, 80% of Square Enix staff were made up of former Square employees. As part of the merger, former Square president Yoichi Wada was appointed the president of the new corporation, while former Enix president Keiji Honda was named vice president. Yasuhiro Fukushima, the largest shareholder of the combined corporation and founder of Enix , became chairman. In October 2008, Square Enix conducted a company split between its corporate business and video game operations, reorganizing itself as the holding company Square Enix Holdings Co., Ltd., while its internally domestic video game operations were formed under the subsidiary Square Enix Co., Ltd. Several of Square Enix's franchises have sold over 10 million copies worldwide after 2020, with "Final Fantasy" selling 168 million, "Dragon Quest" selling 84 million, and "Kingdom Hearts" shipping 35 million. In 2005, Square Enix acquired arcade corporation Taito, known for games such as "Space Invaders", "Bubble Bobble" and "Darius". In 2009, Square  Enix acquired British game publisher Eidos Interactive, which was absorbed into Square Enix Europe to publish titles such as "Tomb Raider", "Deus Ex" and "Just Cause". Square Enix is headquartered at the Shinjuku Eastside Square Building in Shinjuku, Tokyo, and has over 5,000 employees worldwide through its base operations and subsidiaries. Corporate history. Origins and pre-merger (1975–2003). Enix (1975–2003). Enix was founded on September 22, 1975, as Eidansha Boshu Service Center by Japanese architect-turned-entrepreneur Yasuhiro Fukushima. Enix focused on publishing games, often by companies who exclusively partnered with the company, and is perhaps most famous for publishing  the "Dragon Quest" series of console games developed by Chunsoft. Key members of the developer's staff consisted of director Koichi Nakamura, writer Yuji Horii, artist Akira Toriyama, and composer Koichi Sugiyama, among others. The first game, Dragon Warrior, in the Famicom-based RPG series, was released in 1986 and would eventually sell 1.5 million copies in Japan, establishing "Dragon Quest" as the company's most profitable franchise. Despite the announcement that Enix's long-time competitor Square would develop exclusively for PlayStation, Enix announced in January 1997 that it would release games for both Nintendo and Sony consoles. This  caused a significant rise in stock for both Enix and Sony. By November 1999, Enix was listed in the Tokyo Stock Exchange's 1st section, indicating it as a "large company". Square (1983–2003). Square was started in October 1983 by Masafumi Miyamoto as a computer game software division of Den-Yu-Sha, a power line construction company owned by his father. While at the time, game development was usually conducted —by only one programmer, Miyamoto believed that it would be more efficient to have graphic designers, programmers and professional story writers working together. In September 1986, the division was spun  off into an independent company led by Miyamoto, officially named Square Co., Ltd. After releasing several unsuccessful games for the Famicom, Square relocated to Ueno, Tokyo in 1987 and developed a role-playing video game titled "Final Fantasy", which was inspired by Enix's success in the genre with the 1986 "Dragon Quest". "Final Fantasy" was a success with over 400,000 copies sold, and it became Square's leading franchise, spawning dozens of games in a series that continues to the present. Buoyed by the success of their "Final Fantasy" franchise, Square developed many other widely known games such as  Chrono Trigger, "Chrono Cross", "Secret of Mana", "Legend of Mana", "Xenogears", "Brave Fencer Musashi", "Parasite Eve", "Saga Frontier", "Romancing Saga", "Vagrant Story", "Kingdom Hearts" (done in collaboration with Disney Interactive), and "Super Mario RPG" (done under the guidance of Super Mario creator Shigeru Miyamoto). By late 1994 they had developed a reputation as a producer of high-quality role-playing video games. Square was one of the many companies that had planned to develop and publish their games for the Nintendo 64, but with the cheaper costs associated with developing games on CD-based consoles such as the Sega Saturn  and the Sony PlayStation, Square decided to develop titles for the latter system. "Final Fantasy VII" was one of these games, and it sold 9.8 million copies, making it the second-best-selling game for the PlayStation. Merger (2003). A merger between Square and Enix was considered since at least 2000; the financial failure in 2001 of Square's first movie, "", made Enix reluctant to proceed while Square was losing money. With the company facing its second year of financial losses, Square approached Sony for a capital injection, and on October 8, 2001, Sony Corp purchased an 18.6% stake in  Square. Following the success of both "Final Fantasy X" and "Kingdom Hearts", the company's finances stabilized, and it recorded the highest operating margin in its history in the fiscal year 2002. It was announced on November 25, 2002, that Square and Enix's previous plans to merge were to officially proceed, intending to decrease development costs and to compete with foreign developers. As described by Square's president and CEO Yoichi Wada: "Square has also fully recovered, meaning this merger is occurring at a time when both companies are at their height." Some shareholders expressed concerns about the merger , notably Miyamoto (the founder and largest shareholder of Square), who would find himself holding a significantly smaller percentage of the combined companies. Other criticism came from Takashi Oya of Deutsche Securities, who expressed doubts about the benefits of such a merger: "Enix outsources game development and has few in-house creators, while Square does everything by itself. The combination of the two provides no negative factors but would bring little in the way of operational synergies." Miyamoto's concerns were eventually resolved by altering the exchange ratio of the merger so that each Square share would be exchanged for 0.85  Enix shares rather than 0.81 shares, and the merger was greenlit. The merger was set for April 1, 2003, on which date the newly merged entity Square Enix came into being. At the time of the merger, 80% of Square Enix staff were made up of former Square employees. As part of the merger, former Square president Yoichi Wada was appointed the president of the new corporation, while former Enix president Keiji Honda became its vice president. The founder of Enix and the largest shareholder of the newly combined corporation, Yasuhiro Fukushima, was made its honorary chairman. As a result  of the merger, Enix was the surviving company and Square Co., Ltd. was dissolved. In July of that year, the Square Enix headquarters were moved to Yoyogi, Shibuya, Tokyo, to help combine the two companies. Post-merger and acquisitions (2004–2012). Since the merger in 2003, Square Enix has acquired several companies and created several subsidiary companies. To strengthen its wireless market, Square Enix acquired mobile application developer UIEvolution in March 2004, though it was sold in December 2007, and the company instead founded its own Square Enix MobileStudio in January 2008 to focus on mobile products. In January 2005, Square  Enix founded Square Enix China, expanding their interests in the People's Republic of China. In September 2005, Square Enix bought the gaming developer and publisher Taito, renowned for their arcade hits such as "Space Invaders" and the "Bubble Bobble" series; Taito's home and portable console games divisions were merged into Square Enix itself by March 2010. In August 2008, Square Enix made plans for a similar expansion by way of a friendly takeover of video game developer Tecmo by purchasing shares at a 30 percent premium, but Tecmo rejected the proposed takeover. In April 2007, Square Enix Ltd.  CEO John Yamamoto also became CEO of Square Enix, Inc. In 2008-2009, Square Enix was reportedly working with Grin on a Final Fantasy spin-off codenamed Fortress. The project was allegedly canceled by Square Enix after introducing seemingly impossible milestones and without payments made, resulting in Grin declaring bankruptcy and its co-founders blaming Square Enix for being "betrayed". In February 2009, Square Enix announced a takeover deal for Eidos plc, the holding company for Eidos Interactive, the UK-based publisher of the "Tomb Raider", "Hitman", "Deus Ex", "Thief" and "Legacy of Kain" franchises, along with its multiple subsidiary  development studios that developed the games The acquisition of Eidos was completed in April 2009, and in November the publisher was merged with Square Enix's European publishing organization to form Square Enix Europe. In April 2010, a new Japanese label for Western games bearing CERO restrictions called "Square Enix Extreme Edges" was announced. In July 2010, Mike Fischer was appointed CEO of Square Enix, Inc. In March 2011, Square Enix founded mobile development studio Hippos Lab and Square Enix Montréal in 2012. In July 2011, it was reported that Square Enix closed their Los Angeles Studio. Restructuring (2013). On  March 26, 2013, citing sluggish sales of major Western games, Square Enix announced major restructuring, expected loss of ¥10 billion and resignation of President Yoichi Wada, whom Yosuke Matsuda replaced. Phil Rogers was elected as a new Director, among others. With the restructuring, Square Enix of America CEO Mike Fischer left the company in May, with former Square Enix Europe CEO Phil Rogers becoming CEO of Americas and Europe. Further executive changes at Square Enix Western studios were mentioned in a statement. With the consolidation of Square Enix Western divisions around 2015, Square Enix Ltd. and Square Enix Inc.  are collectively referred to as Square Enix West. It said with the fiscal year report in March 2013, sales of "Tomb Raider" (2013) and "Hitman: Absolution" were weak, despite critical acclaim. The North American sales force was said to be ineffective as the game sold two-thirds the number of units it did in Europe. Price pressure was intense, which forced spending additional channel costs such as price protection. Matsuda noted the long development time of their important games and said they need to shift to a business model with frequent customer interactions, noting Kickstarter as an example, and finally , make sure games meet customer expectations. Post-restructuring (2013–present). In March 2013, Square Enix India opened in Mumbai; however the studio was closed in April 2014. As well as Square Enix Latin America in Mexico, which was closed in 2015. A mobile studio called Smileworks was founded in Indonesia in June 2013; however it was closed in January 2015. In 2014, Square Enix signed a strategic alliance with French video game company Ubisoft; it has served as the Japanese publisher of video games since 2009. In March 2014, following the success of Bravely Default, Square Enix said it will  go back to their roots and focus on creating content that will appeal to their core audience. In 2015, Square created a new studio known as Tokyo RPG Factory to develop what was then dubbed "Project Setsuna." On February 21, 2017, the formation of a new studio Studio Istolia was announced. The studio, headed by Hideo Baba, would be working on the new RPG "Project Prelude Rune". Baba departed the studio in early 2019, and shortly after this, Studio Istolia was closed, and "Project Prelude Rune" cancelled following an assessment of the project, with its staff being reassigned to different  projects within the company. In 2019, Square Enix opened an Indian office again, now in Bangalore, which expanded into publishing mobile games for the Indian market in 2021. In March 2021, Forever Entertainment, a Polish studio, was reported to be working to bring several of Square Enix's properties to modern systems. Corporate structure. On October 1, 2008, Square Enix transformed into a holding company and was renamed Square Enix Holdings. At the same time, the gaming and publishing businesses were transferred to a spin-off named Square Enix, sharing the same corporate leadership and offices with the holding company . The primary offices for Square Enix and Square Enix Holdings are in the Shinjuku Eastside Square Building in Shinjuku, Tokyo. Development organization. After the merger in 2003, Square Enix's development department was organized into eight Square and two Enix , each focused on different groupings of games. The divisions were spread around different offices; for example, Product Development Division 5 had offices both in Osaka and Tokyo. According to Yoichi Wada, the development department was reorganized away from the Product Development Division System by March 2007 into a project-based system. Until 2013, the teams in charge of the "Final  Fantasy" and "Kingdom Hearts" series were still collectively referred to as the . The 1st Production Department was formed from the fall 2010 combination of Square Enix's Tokyo and Osaka development studios, with Shinji Hashimoto as its corporate executive. In December 2013, Square Enix's development was restructured into 12 Business Divisions. In 2017, Business Division 9 was merged into Business Division 8, while Business Divisions 11 and 12 merged to become the new Business Division 9, while a new Business Division 11 was created with some staff from Business Division 6. In 2019, Square Enix announced that their eleven  Business Divisions would be consolidated into four units by 2020 with a new title, Creative Business Unit. Naoki Yoshida, who was previously the head of Business Division 5, became the head of Creative Business Unit III. The current structure for the development and production division called Creative Business Unit is as follows: Business model. The business model of post-merger Square Enix is centered on the idea of "polymorphic content", which consists of developing franchises on multiple potential media rather than being restricted by a single gaming platform. An early example of this strategy is Enix's "Fullmetal Alchemist" manga  series, which has been adapted into two anime television series, two movies, and several novels and video games. Other polymorphic projects include the "Compilation of Final Fantasy VII", "Code Age", "World of Mana", "Ivalice Alliance" and "Fabula Nova Crystallis Final Fantasy" subseries. According to Yoichi Wada, "It's very difficult to hit the jackpot, as it were. Once we've hit it, we have to get all the juice possible out of it". Similar to Sony's Greatest Hits program, Square Enix also re-releases their best selling games at a reduced price under a label designated "Ultimate Hits". The  standard game design model Square Enix employs is to establish the plot, characters, and art of the game first. Battle systems, field maps, and cutscenes are created next. According to Taku Murata, this process became the company's model for development after the success of Square's "Final Fantasy VII" in 1997. The team size for "Final Fantasy XIII" peaked at 180 artists, 30 programmers, and 36 game designers, but analysis and restructuring were done to outsource large-scale development in the future. Business. Video games and franchises. Square Enix's primary concentration is on video gaming, and it is  primarily known for its role-playing video game franchises. Of its properties, the "Final Fantasy" franchise, begun in 1987, is the best-selling, with a total worldwide sales of over 168 million units as of April 2022. The "Dragon Quest" franchise, begun in 1986, is also high-selling; it is considered one of the most popular game series in Japan and new installments regularly outsell other games at the times of their release, with a total worldwide sales of over 84 million units. More recently, the "Kingdom Hearts" series (developed in collaboration with Disney's Interactive Studios beginning in 2002 ) has become popular, with 35 million units shipped as of October 2021. Other popular series developed by Square Enix include the "SaGa" series with nearly 10 million copies sold since 1989, the "Mana" series with over 6 million sales since 1991, and the "Chrono" series with over 5 million sold since 1995. In addition to their sales numbers, many Square Enix games have been highly reviewed; 27 Square Enix games were included in "Famitsu" magazine's 2006 "Top 100 Games Ever", with 7 in the top 10 and "Final Fantasy X" claiming the number 1 position. The company also won  IGN's award for Best Developer of 2006 for the PlayStation 2. Square and Enix initially targeted Nintendo home consoles with their games, but Square Enix currently develops games for a wide variety of systems. In the seventh generation of video game consoles, Square Enix released new installments from its major series across all three major systems, including "Final Fantasy XIII" on both the PlayStation 3 and Xbox 360 and "Dragon Quest X" on the Wii. Square Enix has also developed titles for handheld game consoles, including the Game Boy Advance, Nintendo DS, PlayStation Portable, Nintendo 3DS, and PlayStation Vita . Also, they have published games for Microsoft Windows-based personal computers and various models of mobile phones and modern smartphones. Square Enix mobile phone games became available in 2004 on the Vodafone network in some European countries, including Germany, the United Kingdom, Spain, and Italy. Before its launch, Michihiro Sasaki, senior vice president of Square Enix, spoke about the PlayStation 3, saying, "We don't want the PlayStation 3 to be the overwhelming loser, so we want to support them, but we don't want them to be the overwhelming winner either, so we can't support them too much ." Square Enix continued to reiterate their devotion to multi-platform publishing in 2007, promising more support for the North American and European gaming markets where console pluralism is generally more prevalent than in Japan. Their interest in multi-platform development was made evident in 2008 when the previously PlayStation 3-exclusive game "Final Fantasy XIII" was announced for release on the Xbox 360. In 2008, Square Enix released their first game for the iPod, "". Square Enix made a new brand for younger children gaming that same year, known as Pure Dreams. Pure Dreams' first two games, "" and "Pingu's Wonderful  Carnival", were released that year. After acquiring Eidos in 2009, Square Enix combined it with its European publishing wing to create Square Enix Europe, which continues to publish Eidos franchises such as "Tomb Raider" (88 million sales), "Deus Ex" (4 million), "Thief" and "Legacy of Kain" (3.5 million). In November 2017, Square Enix stopped publishing the "Hitman" franchise and sold the IP to game developer IO Interactive. Square Enix has also served as the Japanese publisher for Activision Blizzard and Ubisoft games since 2009. Square Enix owned franchises and games include: Game engines. Square Enix has developed two notable in -house game engines. In 2004, Square Enix began to work on a "common 3D format" that would allow the entire company to develop titles without being restricted to a specific platform: this led to the creation of a game engine named Crystal Tools, which is compatible with the PlayStation 3, the Xbox 360, Windows-based PCs and to some extent the Wii. It was first shown off at a tech demo shown off at E3 2005 and was later used for "Final Fantasy XIII" based on the demo's reception. Crystal Tools was also used for "Final Fantasy Versus XIII  before its re-branding as Final Fantasy XV" and its shift onto next-gen platforms. Refinement of the engine continued through the development of "Final Fantasy XIII-2", and it underwent a major overhaul for "". Since that release, no new titles have been announced using Crystal Tools, and it is believed that the development of the engine has halted permanently. The second major in-house engine is Luminous Engine, intended for eighth-generation consoles, which was originally unveiled at E3 2012 through a tech demo titled "Agni's Philosophy". The first major console title to be developed with Luminous Engine was  Final Fantasy XV; the engine's development was done in tandem with the game, and the game's development helped the programming team optimize the engine. In addition to Luminous Engine and custom engines made for individual games and platforms before and since Square Enix often uses other companies' engines and programming languages for their video game properties. Epic Games' Unreal Engine 3 was used for games such as "The Last Remnant", and more recently, Unreal Engine 4 has been used for projects including "Dragon Quest XI", "Kingdom Hearts III" and the most recent "Final Fantasy VII Remake". Unity has  also been used internally for titles including "I Am Setsuna", "Lost Sphear" and "". The Squirrel language had also been used for the WiiWare title "". Online gaming. Before the merger, Enix published its first online game "Cross Gate" in Japan, mainland China, and Taiwan in 2001, and Square released "Final Fantasy XI" in Japan in 2002 for the PlayStation 2 and later the personal computer. With the huge success of "Final Fantasy XI", the game was ported to the Xbox 360 two years later and was the first MMORPG on the console. All versions of the game used PlayOnline, a cross -platform internet gaming platform and internet service developed by Square Enix. The platform was used as the online service for many games Square Enix developed and published throughout the decade. Due to the success of their MMORPG, Square Enix began a new project called "". GamePot, a Japanese game portal, received the license to publish "Fantasy Earth" in Japan, and it was released in Japan as "Fantasy Earth ZERO." In 2006, however, Square Enix dropped the "Fantasy Earth Zero" project and sold it to GamePot. Square Enix released "Concerto Gate", the sequel to "Cross Gate", in 2007. A next-gen MMORPG  code named "Rapture" was developed by the "Final Fantasy XI" team using the company's Crystal Tools engine. It was unveiled at E3 2009 as "Final Fantasy XIV" for PlayStation 3 and Microsoft Windows and would be released on September 30, 2010. "" was announced in September 2011 as an MMORPG being developed for Nintendo's Wii and Wii U consoles, which released on August 2, 2012, and March 30, 2013, respectively. Like "XIV", it used Crystal Tools. Square Enix also made browser games and Facebook games, like "Legend World", "Chocobo's Crystal Tower" and "Knights of the Crystals", and online  games for Yahoo! Japan, such as "Monster x Dragon", "Sengoku Ixa", "Bravely Default: Praying Brage", "Star Galaxy", and "Crystal Conquest". Cloud gaming. In 2013, Dragon Quest X was brought to iOS and Android in Japan using NTT DoCoMo as the release platform and Ubitus for the streaming technology. In 2014, it was also brought to 3DS in Japan using Ubitus. On May 8, 2012, Square Enix announced a collaboration with Bigpoint Games to create a free-to-play Cloud gaming platform that "throws players into 'limitless game worlds' directly through their web browser". The service was launched under the name  CoreOnline in August 2012. Stating "limited commercial take-up", the service was cancelled on November 29, 2013. In September 2014, a cloud gaming company called Shinra Technologies (previously Project Flare) was created; however, it was closed in January 2016. On October 9, 2014, Square Enix launched another online game service in Japan called "Dive In", which allowed players to stream console games to their iOS or Android devices. The service was monetized by the amount of time the players spent playing, with each game offered for free for thirty minutes. The service was cancelled on September 13, 2015. Some Square  Enix games are available in Japan on the G-cluster streaming service. Arcade/Amusement. With the merger of Taito businesses into Square Enix, the company gained possession of Taito's arcade infrastructure and facilities and entered the arcade market in 2005. In 2010 Taito revealed NESiCAxLive, a cloud-based system of storing games and changing them through the internet instead of acquiring physical copies. This system was added to its many arcade gaming locations. The company continues to cater to the arcade audience in Japan with arcade-only titles, with game producers in 2015 stating that Square Enix has a  loyal fan base that values the arcade gaming experience. In November 2019, Square Enix announced a "Ninja Tower Tokyo" theme park by its newly established "Live Interactive Works" division. Film. The company has made three forays into the film industry. The first, "" (2001), was produced by Square subsidiary Square Pictures before the Enix merger; Square Pictures is now a consolidated subsidiary of Square Enix. Its box-office failure caused Enix to delay the merger, which was already under consideration before the creation of the film until Square became profitable once again. In 2005, Square Enix released "Final Fantasy VII Advent  Children", a CGI-animation film based on the PlayStation game "Final Fantasy VII", set two years after the events of the game. A "Deus Ex" film was in pre-production in 2012 and, as of 2014, was undergoing rewrites. In 2016 Square Enix revealed a film called "" based in the world of "Final Fantasy XV" and a new web series released on YouTube and Crunchyroll entitled "". Manga. The company has a manga publishing division in Japan (originally from Enix) called Gangan Comics, which publishes content for the Japanese market only. In 2010, however, Square Enix launched a digital manga store  for North American audiences via its Members services, which contains several notable series published in Gangan anthologies. Titles published by Gangan Comics include "Fullmetal Alchemist", "Soul Eater", and many others. Other titles include manga adaptations of various Square Enix games, like "Dragon Quest", "Kingdom Hearts" and "Star Ocean". Some of these titles have also been adapted into anime series. "Fullmetal Alchemist" is the most successful title of Square Enix's manga branch, with more than 64 million volumes sold worldwide. It is licensed in North America by Viz Media, while its two anime adaptations were licensed by Funimation Entertainment in  the United States. Starting in Q4 2019, Square Enix began publishing some of its manga series in English. Merchandise. Square Enix has created merchandise for virtually all of their video game franchises, though many items are available only in Japan. Starting in 2000, Square Enix's former online gaming portal PlayOnline sold merchandise from game franchises including "Parasite Eve", "Vagrant Story", "Chocobo Racing", "Front Mission", "Chrono Cross", and "Final Fantasy". Mascots from game franchises are a popular focus for merchandise, such as the Chocobo from "Final Fantasy", which has been seen as a rubber duck, a plush baby Chocobo, and  on coffee mugs. Square Enix also designed a Chocobo character costume for the release of "". The Slime character from "Dragon Quest" has also been frequently used in Square Enix merchandise, especially in Japan. On the Japanese Square Enix shopping website, there is also a Slime-focused section called "Smile Slime". Slime merchandise includes plush toys, pencil cases, keychains, game controllers, a stylus, and several board games, including one titled "Dragon Quest Slime Racing". In Japan, pork-filled steam buns shaped like slimes have been sold in 2010. For "Dragon Quest's" 25th anniversary, special items were sold, including business cards , tote bags, and crystal figurines. Rabites from the "Mana" series have appeared in several pieces of Square Enix merchandise, including plush dolls, cushions, lighters, mousepads, straps, telephone cards, and T-shirts. Square Enix has also made merchandise for third party series, including figures "Mass Effect" and "Halo" in 2012. Beginning in 2012, it has shops called "Square Enix Cafe" in Tokyo, Osaka and Shanghai, which display and sell merchandise, as well as serve café food.