Square Enix Holdings Co., Ltd. is a Japanese company that owns and manages other businesses worldwide. It publishes and creates video games, including popular role-playing game series such as Final Fantasy, Dragon Quest, and Kingdom Hearts. In addition to making video games, the company also sells merchandise, operates arcade game centers, and publishes manga through its Gangan Comics brand.

The company was originally created in April 2003 when two companies, Square and Enix, merged. Enix remained the main company after the merger, and each share of Square became 0.85 shares of Enix. At the time, 80% of Square Enix employees were former Square workers. Yoichi Wada, who was the president of Square, became the president of the new company, while Keiji Honda, the former president of Enix, became vice president. Yasuhiro Fukushima, the largest owner of the combined company and founder of Enix, became chairman.

In 2008, Square Enix separated its business into two parts: one for corporate operations and another for video game development. The company then became Square Enix Holdings Co., Ltd., while its video game operations were placed under a new subsidiary called Square Enix Co., Ltd. The company has branches in the United States, China, and Europe, located in Los Angeles, Beijing, Paris, Hamburg, and London.

Several of Square Enix’s game series sold more than 10 million copies worldwide after 2020. Final Fantasy sold 173 million copies, Dragon Quest sold 85 million, and Kingdom Hearts sold 36 million. In 2005, Square Enix bought the arcade company Taito. In 2009, Square Enix purchased Eidos plc, the parent company of Eidos Interactive, which was later added to its European branch. The company’s headquarters is in the Shinjuku Eastside Square Building in Tokyo, with another office in Osaka. Square Enix has more than 5,000 employees worldwide through its main operations and other companies it owns.

Corporate history

Enix was founded on September 22, 1975, as Eidansha Boshu Service Center by Yasuhiro Fukushima, a Japanese architect who became an entrepreneur. Enix focused on publishing games, usually from companies that worked only with Enix. In the 1980s, Enix partnered with developers Chunsoft to publish the Dragon Quest series of console games.

Key members of the development team included director Koichi Nakamura, writer Yuji Horii, artist Akira Toriyama, and composer Koichi Sugiyama. The first game in the Famicom-based RPG series, Dragon Warrior, was released in 1986 and sold 1.5 million copies in Japan. This success made Dragon Quest Enix's most profitable franchise. In 1997, Enix announced it would release games for both Nintendo and Sony consoles, even though its competitor Square had previously planned to develop only for PlayStation. This decision caused a significant rise in stock prices for both Enix and Sony. By November 1999, Enix was listed in the Tokyo Stock Exchange’s first section, which classifies it as a "large company."

Square was started in October 1983 as a computer game software division of Den-Yu-Sha, a power line construction company owned by Masafumi Miyamoto’s father. At the time, game development was usually done by one programmer, but Miyamoto believed it would be more efficient to work with graphic designers, programmers, and professional writers. In 1986, the division became an independent company named Square Co., Ltd. After releasing several unsuccessful games for the Famicom, Square moved to Ueno, Tokyo, in 1987 and developed Final Fantasy, a role-playing game inspired by Enix’s Dragon Quest. Final Fantasy sold over 400,000 copies and became Square’s leading franchise, leading to many games in the series.

Square later developed other notable franchises, such as Chrono, Mana, Kingdom Hearts (with The Walt Disney Company), and Super Mario RPG (with Nintendo). By 1994, Square was known for creating high-quality role-playing games. Square planned to develop games for the Nintendo 64 but later chose to focus on the PlayStation due to lower development costs. Final Fantasy VII, one of these games, sold 9.8 million copies and became the second-best-selling game for the PlayStation.

A merger between Square and Enix was considered as early as 2000. However, Square’s 2001 film Final Fantasy: The Spirits Within failed financially, making Enix hesitant to proceed. Square then sought financial help from Sony, which purchased an 18.6% stake in Square in 2001. After the success of Final Fantasy X and Kingdom Hearts, Square’s finances improved, and it recorded its highest operating margin in 2002. In 2002, Square and Enix announced plans to merge, aiming to reduce development costs and compete with foreign developers. Square’s president, Yoichi Wada, stated the merger occurred when both companies were at their strongest.

Some shareholders, including Masafumi Miyamoto (Square’s founder), worried about the merger, as their ownership would shrink. Others, like Takashi Oya of Deutsche Securities, questioned the benefits of combining Enix’s outsourcing model with Square’s in-house development. These concerns were addressed by adjusting the merger’s exchange rate, and the merger was approved. The new company, Square Enix, was formed on April 1, 2003. At that time, 80% of Square Enix’s staff were former Square employees. Yoichi Wada became president, and Keiji Honda, former Enix president, became vice president. Yasuhiro Fukushima, Enix’s founder, became honorary chairman.

After the merger, Enix remained the surviving company, and Square Co., Ltd. was dissolved. In July 2003, Square Enix’s headquarters moved to Yoyogi, Shibuya, Tokyo. To expand its wireless market, Square Enix acquired UIEvolution in 2004 but sold it in 2007. Instead, the company created Square Enix MobileStudio in 2008. In 2005, Square Enix founded Square Enix China to grow its presence in China.

In 2005, Square Enix bought Taito, a company known for arcade games like Space Invaders and Bubble Bobble. Taito’s console divisions were merged into Square Enix by 2010. In 2008, Square Enix attempted to acquire Tecmo but was rejected. Tecmo later merged with Koei to form Koei Tecmo. In 2007, John Yamamoto became CEO of Square Enix, Inc. Between 2008 and 2009, Square Enix worked with Grin on a Final Fantasy spin-off called Fortress, but the project was canceled, leading to Grin’s bankruptcy. In 2009, Square Enix signed a distribution agreement with Ubisoft to help distribute Ubisoft’s games in Japan.

In 2009, Square Enix acquired Eidos, a UK-based company that owned the Tomb Raider, Hitman, and Deus Ex franchises. Eidos was merged with Square Enix’s European operations. In 2010, Square Enix launched Square Enix Extreme Edges, a label for Western games with CERO restrictions. Mike Fischer became CEO of Square Enix, Inc., in 2010. The company also founded Hippos Lab in 2011 and Square Enix Montréal in 2012. In 2011, Stainless Games acquired the rights to Carmageddon from Square Enix. Square Enix closed its Los Angeles studio in 2011 and shifted its North American operations to focus on niche, mobile, and social media games.

Corporate structure

On October 1, 2008, Square Enix became a holding company and was renamed Square Enix Holdings. At the same time, its development and publishing businesses were moved to a new company called Square Enix. This new company shared the same leaders and offices as the holding company. The main offices for both Square Enix and Square Enix Holdings are located in the Shinjuku Eastside Square Building in Shinjuku, Tokyo.

Today, Square Enix operates in several different areas. It has five Creative Business Units that focus on making and producing games. There is also a separate unit for publishing manga and books, a division for its digital store and merchandise, a unit for music, concerts, and visual content like movies and animations, and a division for blockchain technology.

After a merger in 2003, Square Enix's development team was divided into eight Square and two Enix Product Development Divisions. Each division worked on different types of games and was based in different offices. For example, Product Development Division 5 had offices in both Osaka and Tokyo.

In March 2007, the development department was reorganized into a system based on specific projects instead of the Product Development Divisions. Until 2013, teams working on the Final Fantasy and Kingdom Hearts series were still called the 1st Production Department. This department was formed in 2010 when Square Enix's Tokyo and Osaka studios merged, with Shinji Hashimoto as its leader.

In December 2013, Square Enix restructured its development into 12 Business Divisions. In 2017, Business Division 9 was merged into Business Division 8, while Business Divisions 11 and 12 merged to form a new Business Division 9. A new Business Division 11 was also created, using some staff from Business Division 6.

In 2019, Square Enix combined all its Business Divisions into four Creative Business Units. Creative Business Unit 1 was led by Yoshinori Kitase, Unit 2 by Yu Miyake, Unit 3 by Naoki Yoshida, and Unit 4 by Kei Hirono.

In April 2024, Square Enix reorganized its development teams again, moving away from the Creative Business Unit structure to a new Creative Studio structure.

• Creative Studio 1 is led by Yoshinori Kitase and Naoki Hamaguchi. They work on projects like the Final Fantasy VII and Kingdom Hearts series.
• Creative Studio 2 is led by Yoshinori Kitase, with Motomu Toriyama and Shinpei Yashima as deputy leaders. They work on SaGa games.
• Creative Studio 3 is led by Naoki Yoshida. They work on games like Final Fantasy XIV and Final Fantasy XVI.
• Creative Studio 4 is led by Yosuke Saito.
• Creative Studio 5 is led by Tomoya Asano, with Masashi Takahashi as a deputy leader. They work on HD-2D games, the Bravely series, Dragon Quest titles, and the Paranormasight series.

After the merger, Square Enix focused on creating "polymorphic content," which means developing stories and games across multiple formats, such as movies, books, and games. An early example was the Fullmetal Alchemist manga series, which became anime, movies, novels, and video games. Other 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, Square Enix tries to take full advantage of successful projects. Like Sony's Greatest Hits program, Square Enix also re-releases its popular games at lower prices under the "Ultimate Hits" label.

Square Enix's standard game design process starts by creating the story, characters, and artwork. Next, battle systems, maps, and cutscenes are developed. This method became the company's model after the success of Final Fantasy VII in 1997. The team working on Final Fantasy XIII had up to 180 artists, 30 programmers, and 36 game designers. Later, the company restructured to outsource some large-scale development tasks in the future.

Business

Square Enix focuses mainly on video games and is most famous for its role-playing game series. The Final Fantasy series, which started in 1987, is the best-selling, with more than 173 million copies sold by March 2022. The Dragon Quest series, first released in 1986, is also very popular in Japan and has sold over 85 million copies worldwide. The Kingdom Hearts series, created with Disney starting in 2002, has sold 36 million copies as of March 2022. Other well-known series include the SaGa series (nearly 10 million copies sold since 1989), the Mana series (over 6 million copies since 1991), and the Chrono series (over 5 million copies since 1995). Many Square Enix games have received high praise; 27 of its games were listed in Famitsu magazine's 2006 "Top 100 Games Ever," with 7 in the top 10 and Final Fantasy X ranked number 1. Square Enix also won IGN's 2006 award for Best Developer for its PlayStation 2 games.

Square Enix originally made games for Nintendo consoles but now develops games for many systems. During the seventh generation of consoles, Square Enix released new games for all three major systems, including Final Fantasy XIII on the PlayStation 3 and Xbox 360 and Dragon Quest X on the Wii. The company also created games for handheld devices like the Game Boy Advance, Nintendo DS, PlayStation Portable, Nintendo 3DS, and PlayStation Vita. Square Enix also published games for computers and mobile phones. Mobile games became available in 2004 on the Vodafone network in countries like Germany, the United Kingdom, Spain, and Italy.

Before the PlayStation 3 launched, Michihiro Sasaki, a senior leader at Square Enix, said, "We don't want the PlayStation 3 to be the biggest loser, but we also don't want it to be the biggest winner." Square Enix continued to support multiple platforms in 2007, promising more help for North American and European markets where many different consoles are used. This was shown in 2008 when Final Fantasy XIII was released on the Xbox 360, in addition to the PlayStation 3.

In 2008, Square Enix released its first game for the iPod, called Song Summoner: The Unsung Heroes. That same year, the company created a brand for younger children called Pure Dreams, which released two games: Snoopy DS: Let's Go Meet Snoopy and His Friends! and Pingu's Wonderful Carnival. In 2009, Square Enix bought Eidos and combined it with its European team to form Square Enix Europe, which continues to publish games like Tomb Raider (88 million sales), Deus Ex (4 million), Thief, and Legacy of Kain (3.5 million). From 2009 to 2024, Square Enix was the Japanese publisher for Activision Blizzard and Ubisoft. In May 2022, Square Enix sold parts of Square Enix Europe, including Tomb Raider, Deus Ex, Thief, Legacy of Kain, and over 50 other franchises, to Embracer Group for $300 million.

Square Enix owns many franchises and games, including:
– Former Square franchises, like Mana;
– Former Enix franchises, like Star Ocean;
– Franchises created by Square Enix, like Drakengard;
– Quest franchises, like Ogre;
– Taito franchises, like Space Invaders;
– Franchises from Crystal Dynamics, like Gex;
– Franchises from Eidos Interactive, like Just Cause;
– Games made by Square Enix America, like Quantum Conundrum;
– Franchises made by Square Enix Europe, like Life Is Strange.

In 2004, Square Enix started working on a "common 3D format" that could be used on any platform. This led to the creation of a game engine called Crystal Tools, which works on the PlayStation 3, Xbox 360, Windows-based computers, and the Wii. The engine was first shown at E3 2005 and later used for Final Fantasy XIII. It was also used for Final Fantasy Versus XIII, which was later renamed Final Fantasy XV. The engine was improved for Final Fantasy XIII-2 and completely redesigned for Lightning Returns: Final Fantasy XIII. No new games have used Crystal Tools since its last release.

Luminous Engine was designed for eighth-generation consoles and first shown at E3 2012 through a demo called Agni's Philosophy. The first major game using Luminous Engine was Final Fantasy XV, which helped improve the engine's performance.

Square Enix also uses other game engines, like Unreal Engine 3 (used for The Last Remnant), Unreal Engine 4 (used for Dragon Quest XI, Kingdom Hearts III, and Final Fantasy VII Remake), and Unity (used for I Am Setsuna, Lost Sphear, and SaGa: Scarlet Grace).

Before merging with Enix, Enix released its first online game, Cross Gate, in Japan, mainland China, and Taiwan in 2001. Square Enix released Final Fantasy XI in Japan in 2002 for the PlayStation 2 and later for computers. The game was later released on the Xbox 360, becoming the first MMORPG on that console. All versions of the game used PlayOnline, a cross-platform online service developed by Square Enix. The service was used for many Square Enix games during the 2000s. After the success of Final Fantasy XI, Square Enix started a new project called Fantasy Earth: The Ring of Dominion. The project was later sold to GamePot, a Japanese game company. Square Enix released Concerto Gate, a sequel to Cross Gate, in 2007.

A next-gen MMORPG called Rapture was developed using Crystal Tools. It was announced as Final Fantasy XIV for PlayStation 3 and Windows in 2009 and released in 201