Yesterday, Square Enix revealed that they were moving away from their current strategy to make a few AAA multiplatform games, had changed their organizational structure, and fired people in divisions outside of Japan. But today we learned that Square also spoke on what we didn’t expect them to acknowledge.
As reported by Takashi Mochizuki for Bloomberg, Foamstars, Final Fantasy XVI, and Final Fantasy VII Rebirth, all did not meet expectations. Square Enix may say one thing to fans in their press released, but in this latest financial meeting, their CEO Takashi Kiryu stated matter of factly that all three PlayStation 5 exclusives reached numbers below what they expected in terms of both revenue and profit.
Square had shared sales numbers for Final Fantasy XVI before, but have yet to do the same for the other two titles. So we shouldn’t be speculating on particular sales numbers for Foamstars or Final Fantasy VII Rebirth. At the same time, there should be no dispute that these games had a role to play in Square Enix’s changes in the way they do business.
While on paper Square Enix has made more games for Nintendo platforms in the past few years, we have consistently associated them with PlayStation for a reason. It’s on PlayStation where they have consistently brought their biggest, most high profile, and big budget games. It’s where they brought most of their biggest games in the Final Fantasy and Kingdom Hearts franchises, and for a very long time, Square made those games exclusive to the platform.
For most of the period of this partnership, Square/Square Enix staying exclusive to PlayStation made sense. It was the lead platform for the industry for a very long time, and focusing on one platform allowed Square to stretch their ambition.
But in 2024, development environments across platforms, meaning Xbox, PlayStation, and even the Switch, are more alike than they are different. This means they can potentially make more money, and return on investment, by making games multiplatform.
But on top of that, the rules for the video game industry has changed. As we now know, a big number of PlayStation 5 owners don’t buy PlayStation exclusive games. Sony has found that even their own first party AAA titles are not making enough money from their own user base to make development worthwhile.
So, let’s acknowledge what matters here. Fanboys may want to use this as ammunition for console wars, but what’s more important than that, is that Square had to fire their own hardworking employees because they didn’t make enough money. And that happened because they made the wrong decisions for their business.
Maybe things would be different if Square chose to scale down their projects or went multiplatform earlier. But it isn’t just demoralizing to have to lay off employees; it also hurts their ability to make more money in the future.
Satoru Iwata once said that “I sincerely doubt employees who fear that they may be laid off will be able to develop software titles that could impress people around the world.” That’s where Square Enix’s employees are now. It’s a real shame when we do know they are still making games that sell millions and fans enjoy. But that’s the reason Square Enix has to change as a company. We can only hope these changes work out for the company and their employees in the future.
