Square Enix Holdings Co., Ltd. is a Japanese company that owns other businesses, publishes video games, and creates entertainment. It is known for making and releasing role-playing games, including Final Fantasy, Dragon Quest, and Kingdom Hearts, along with many other titles. In addition to video games, Square Enix also sells merchandise, operates arcade games, and publishes manga through its Gangan Comics brand.

Square Enix Co., Ltd. was created in April 2003 when two companies, Square and Enix, combined. Enix became the main company in the merger, and each share of Square was exchanged for 0.85 shares of Enix. At that time, 80% of Square Enix’s employees were former Square workers. Yoichi Wada, the former president of Square, became president of the new company, while Keiji Honda, the former president of Enix, became vice president. Yasuhiro Fukushima, the largest shareholder and founder of Enix, became chairman. In October 2008, Square Enix separated its business operations into two parts: Square Enix Holdings Co., Ltd., which manages the company overall, and Square Enix Co., Ltd., which focuses on video games. The company has offices in Los Angeles, Beijing, Paris, Hamburg, and London.

After 2020, several Square Enix game series sold more than 10 million copies worldwide. Final Fantasy sold 173 million copies, Dragon Quest sold 85 million copies, and Kingdom Hearts sold 36 million copies. In 2005, Square Enix bought Taito, an arcade company. In 2009, Square Enix acquired Eidos plc, which owned Eidos Interactive, and added it to its European branch. Square Enix is based in Shinjuku, Tokyo, at the Shinjuku Eastside Square Building, and has another office in Osaka. The company employs over 5,000 people globally through its main operations and other businesses.

Corporate history

Enix was started on September 22, 1975, as Eidansha Boshu Service Center by Yasuhiro Fukushima, a Japanese architect who later became an entrepreneur. Enix focused on publishing games, often working with companies that partnered with it exclusively. In the 1980s, Enix partnered with Chunsoft to publish the Dragon Quest series of console games.

Key members of the development team for Dragon Quest included director Koichi Nakamura, writer Yuji Horii, artist Akira Toriyama, and composer Koichi Sugiyama. The first game in the series, Dragon Warrior, was released in 1986 for the Famicom console. It sold 1.5 million copies in Japan, making Dragon Quest Enix's most successful game series. In 1997, Enix announced it would release games for both Nintendo and Sony consoles, even though its long-time competitor, Square, had planned to develop games only for PlayStation. This decision caused Enix and Sony's stock prices to rise significantly. By November 1999, Enix was listed on the Tokyo Stock Exchange's first section, showing it was a large company.

Square was founded 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, most game development was done by one programmer, but Miyamoto believed having teams of graphic designers, programmers, and writers would be more efficient. In September 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 most successful series.

Square later developed other popular games, including Chrono, Mana, Kingdom Hearts (with The Walt Disney Company), and Super Mario RPG (with Nintendo). By 1994, Square was known for making high-quality role-playing games. Square planned to develop games for the Nintendo 64, but because developing games for CD-based consoles like the Sega Saturn and PlayStation was cheaper, Square chose to focus on PlayStation. Final Fantasy VII, one of these games, sold 9.8 million copies and became the second-best-selling game for the PlayStation.

Enix and Square had discussed merging since 2000, but Square's financial problems after the 2001 movie Final Fantasy: The Spirits Within made Enix hesitant. Square later accepted financial help from Sony, which bought an 18.6% share of Square in 2001. After Square's success with Final Fantasy X and Kingdom Hearts, its finances improved, and it recorded its highest operating margin in 2002. In 2002, Enix and Square announced plans to merge to reduce costs and compete with foreign developers. Square's president, Yoichi Wada, said the merger happened when both companies were at their strongest.

Some shareholders worried about the merger, especially Masafumi Miyamoto, Square's founder, who would own a smaller share of the combined company. Others, like Takashi Oya of Deutsche Securities, questioned the benefits of the merger, noting that Enix relied on outside developers while Square handled everything internally. Miyamoto's concerns were addressed by adjusting the merger's exchange rate, and the merger was approved. The merger took place on April 1, 2003, creating Square Enix. At that time, 80% of Square Enix's employees were former Square workers. Yoichi Wada became president of the new company, and Keiji Honda, former Enix president, became vice president. Yasuhiro Fukushima, Enix's founder and largest shareholder, became honorary chairman.

After the merger, Enix remained the main company, and Square Co., Ltd. was dissolved. In July 2003, Square Enix moved its headquarters to Yoyogi, Shibuya, Tokyo, to combine the two companies.

To strengthen its mobile market, Square Enix acquired UIEvolution in 2004, later sold it in 2007, and created its own mobile studio, Square Enix MobileStudio, in 2008. In 2005, Square Enix expanded to China by founding Square Enix 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 tried to buy Tecmo but was rejected. Tecmo later merged with Koei to form Koei Tecmo. In 2007, John Yamamoto became CEO of Square Enix, Inc. In 2008–2009, 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 deal with Ubisoft to help distribute its games in Japan.

In 2009, Square Enix acquired Eidos, a UK-based company that owned game franchises like Tomb Raider and Hitman. Eidos was merged with Square Enix's European operations. In 2010, Square Enix launched a new label for Western games called Square Enix Extreme Edges. Mike Fischer became CEO of Square Enix, Inc., in 2010. Square Enix later founded Hippos Lab in 2011 and Square Enix Montréal in 2012. In 2011, Stainless Games bought the rights to Carmageddon from Square Enix. Square Enix closed its Los Angeles studio in 2011 and shifted its North American office to focus on 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, the 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, the company operates in several areas. It has five Creative Business Units that focus on game development and production. There is also a unit for publishing manga and books, a division for managing a digital store and merchandise, a unit for music, concerts, and visual content, and a division for blockchain technology.

In 2003, after a merger, Square Enix reorganized its development department into eight Square and two Enix Product Development Divisions. Each division focused on different types of games and worked from different offices. For example, Product Development Division 5 had offices in both Osaka and Tokyo.

In March 2007, the development department changed from the Product Development Division system to a project-based system. 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 by combining Square Enix’s Tokyo and Osaka studios, 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 with Business Division 8, while Business Divisions 11 and 12 became the 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 restructured its development again, moving away from the Creative Business Unit system to a new Creative Studio system.

• 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 deputies. They work on SaGa titles.
• Creative Studio 3 is led by Naoki Yoshida. They work on titles like Final Fantasy XIV and Final Fantasy XVI.
• Creative Studio 4 is led by Yosuke Saito.
• Creative Studio 5 is led by Tomoya Asano and Masashi Takahashi. They work on HD-2D games, the Bravely series, Dragon Quest titles, and the Paranormasight series.

After the merger, Square Enix’s business model focused on creating content for multiple media, not just games. An example is the Fullmetal Alchemist manga, which was adapted into TV shows, movies, and books. Other projects include the Compilation of Final Fantasy VII, Code Age, World of Mana, Ivalice Alliance, and Fabula Nova Crystallis Final Fantasy subseries. Yoichi Wada said, “It’s hard to create a big success. Once we do, we need to use it as much as possible.” Square Enix also re-releases its best-selling games at lower prices under the label “Ultimate Hits,” similar to Sony’s Greatest Hits program.

Square Enix’s standard game design process begins by creating the story, characters, and art. Battle systems, maps, and cutscenes are developed next. This method became the company’s model after the success of Final Fantasy VII in 1997. The team for Final Fantasy XIII had up to 180 artists, 30 programmers, and 36 game designers. Later, the company restructured to outsource large parts of development.

Business

Square Enix mainly focuses on video games and is best known for its role-playing game series. The Final Fantasy series, which started in 1987, is the most successful, with over 173 million copies sold worldwide as of March 2022. The Dragon Quest series, first released in 1986, is also very popular in Japan and has sold more than 85 million copies globally. The Kingdom Hearts series, created with Disney 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 Final Fantasy X ranked number one. In 2006, Square Enix won IGN's award for Best Developer for the PlayStation 2.

Square Enix originally made games for Nintendo consoles but now develops games for many different systems. During the seventh generation of consoles, Square Enix released new games for all three major systems, including Final Fantasy XIII for the PlayStation 3 and Xbox 360 and Dragon Quest X for the Wii. The company also makes games for handheld devices like the Game Boy Advance, Nintendo DS, PlayStation Portable, Nintendo 3DS, and PlayStation Vita. Square Enix also creates games for personal computers and mobile phones. Mobile games from Square Enix 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 want to support the PlayStation 3, but not too much." Square Enix continued to support multiple platforms in 2007, especially in North America and Europe, where many people use different consoles. This was shown in 2008 when Final Fantasy XIII was released for 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, with games like 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 publishing team to form Square Enix Europe. This group continues to publish Eidos 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 and other Eidos games, to Embracer Group for $300 million.

Square Enix owns or has owned several game franchises, 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 created by Square Enix America, like Quantum Conundrum;
– Franchises created by Square Enix Europe, like Life Is Strange.

In 2004, Square Enix began developing a "common 3D format" to make game development easier across different platforms. This led to the creation of the Crystal Tools engine, which works on the PlayStation 3, Xbox 360, Windows-based PCs, and the Wii. The engine was first shown at E3 2005 and used for Final Fantasy XIII. It was later used for Final Fantasy Versus XIII, which was renamed Final Fantasy XV and moved to newer platforms. 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 major update.

The Luminous Engine was created for eighth-generation consoles and first shown at E3 2012 with 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 engines, such as 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 personal 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. This service was used for many of Square Enix's games during the 2000s.

After the success of Final Fantasy XI, Square Enix started a new project called Fantasy Earth: The Ring of Dominion. A Japanese game portal, GamePot, was licensed to publish the game in Japan as Fantasy Earth ZERO. In 2006, Square Enix canceled the project and sold it to GamePot. Square Enix later released Concerto Gate, a sequel to Cross Gate, in 2007.

A next-gen MMORPG called Rapture was developed using the Crystal Tools engine by the Final Fantasy XI team. It was announced at E3 2009 as Final Fantasy XIV for PlayStation 3 and Windows, and released on September 30, 2010. Dragon Quest X, an MMORPG for the Wii and Wii U, was released in 2012 and 2013 and also used Crystal Tools.

Square Enix has also made browser games and Facebook games, such as Legend World, Chocobo's Crystal Tower, and Knights of the Crystals, as well as online games for Yahoo! Japan, like Monster x Dragon, Sengoku Ixa, Bravely Default: Praying Brage, Star Galaxy, and Crystal Conquest.

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