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(also known under its American
brand name A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create an ...
SquareSoft) was a Japanese
video game development studio A video game developer is a broad term for a software developer specializing in video game development – the process and related disciplines of creating video games. A game developer can range from one person who undertakes all tasks to a large ...
and
publisher Publishing is the activity of making information, literature, music, software and other content available to the public for sale or for free. Traditionally, the term refers to the creation and distribution of printed works, such as books, newsp ...
. It was founded in 1986 by
Masafumi Miyamoto is a Japanese investor and businessman best known as the founder of the video game developer Square. Miyamoto graduated from Waseda University in 1983, and joined his father's electric power conglomerate, Den-Yu-Sha as a programmer in their soft ...
, who spun off part of his father's electronics company Den-Yu-Sha. Among its early employees were
Hironobu Sakaguchi is a Japanese game designer, director, producer, and writer. Originally working for Square (later Square Enix) from 1983 to 2003, he departed the company and founded independent studio Mistwalker in 2004. He is known as the creator of the ''Fin ...
, Hiromichi Tanaka,
Akitoshi Kawazu is a Japanese game designer, director, producer and writer. After joining Square (later Square Enix) in 1985, he went on to become a central developer for the first two ''Final Fantasy'' titles, then acted as creator and lead developer for the ...
,
Koichi Ishii , sometimes credited as Kouichi Ishii, is a video game designer perhaps best known for creating the ''Mana'' series (known as ''Seiken Densetsu'' in Japan). He joined Square (now Square Enix) in 1987, where he has directed or produced every game r ...
,
Kazuko Shibuya is a Japanese video game artist. She is best known for her work with Square (now Square Enix), in particular with the ''Final Fantasy'' series. Biography Shibuya was born in 1965. While in middle school, she began creating illustrations and ...
,
Nasir Gebelli Nasir Gebelli ( fa, ناصر جبلی, also Nasser Gebelli, born 1957) is an Iranian-American programmer and video game designer usually credited in his games as simply Nasir. Gebelli wrote Apple II games for Sirius Software, created his own co ...
and
Nobuo Uematsu is a Japanese composer and keyboardist best known for his contributions to the ''Final Fantasy'' video game series by Square Enix. A self-taught musician, he began playing the piano at the age of twelve, with English singer-songwriter Elton ...
. After several other projects, all of these employees would work on ''
Final Fantasy is a Japanese video game, Japanese science fantasy anthology media franchise created by Hironobu Sakaguchi and developed and owned by Square Enix (formerly Square (video game company), Square). The franchise centers on a series of fantasy and ...
'', a 1987 game for the Nintendo Entertainment System which would bring commercial and critical success and launch a franchise of the same name. Later notable staff included
Yoshinori Kitase is a Japanese game director and producer working for Square Enix. He is known as the director of ''Final Fantasy VI'', ''Chrono Trigger'', ''Final Fantasy VII'', ''Final Fantasy VIII'' and ''Final Fantasy X'', and the producer of the ''Final Fa ...
,
Takashi Tokita (born 24 January 1965) is a Japanese video game developer working for Square Enix. He has worked there since 1985, and has worked as the lead designer for ''Final Fantasy IV'' as well as the director of '' Parasite Eve'' and ''Chrono Trigger''. ...
,
Tetsuya Nomura is a Japanese video game artist, designer and director working for Square Enix (formerly Square). He designed characters for the ''Final Fantasy'' series, debuting with ''Final Fantasy VI'' and continuing with various later installments. Addi ...
,
Yoko Shimomura is a Japanese composer and pianist primarily known for her work in video games. She graduated from the Osaka College of Music in 1988 and began working in the video game industry by joining Capcom the same year. She wrote music for several game ...
and
Yasumi Matsuno is a Japanese video game designer. Matsuno was first introduced to video games in arcades while waiting for the train, and first played '' Space Invaders'' and '' Xevious'' there. He attended Hosei University for foreign policy but dropped ou ...
. Initially developing for PCs, then exclusively for Nintendo systems, Square broke with Nintendo in the 1990s to develop for Sony's in-development PlayStation. Their first PlayStation project, '' Final Fantasy VII'', was a worldwide success, going on to sell ten million units, earning critical acclaim, and boosting the popularity of its genre and platform. Alongside the ''Final Fantasy'' series, the company developed or published several other notable series, including '' SaGa'', ''
Mana According to Melanesian and Polynesian mythology, ''mana'' is a supernatural force that permeates the universe. Anyone or anything can have ''mana''. They believed it to be a cultivation or possession of energy and power, rather than being ...
'', '' Front Mission'', '' Chrono'', and '' Kingdom Hearts''. In the early 2000s, the company saw financial troubles due to the commercial failure of the feature film '' Final Fantasy: The Spirits Within'', which ultimately led Sakaguchi, the creator of ''Final Fantasy'', to withdraw from active game production and leave the company in 2003. Prior to this, a merger had been discussed with
Enix was a Japanese video game publisher that produced video games, anime and manga. Enix is known for publishing the ''Dragon Quest'' series of role-playing video games. The company was founded by Yasuhiro Fukushima on September 22, 1975, as . Th ...
, the noted publisher of the '' Dragon Quest'' series. Following a delay due to the failure of ''The Spirits Within'', the merger went ahead on April 1, 2003, with the new company taking on the name Square Enix. Square as a developer and publisher has become famous in the gaming industry, with ''Final Fantasy'' ranking as one of the best-selling and best-known role-playing video game series of all time. Several of their games have also marked commercial milestones in gaming for various platforms, and continue to be lauded as classics. Many of Square's staff who left the company at various points founded other studios, including
Monolith Soft trading as Monolith Soft, is a Japanese video game development studio originally owned by Namco (later Bandai Namco) until being bought out by Nintendo in 2007. The company was founded in 1999 by Tetsuya Takahashi with the support and coope ...
('' Xeno''),
Sacnoth renamed in 2002, was a Japanese video game developer based in Tokyo. The company was founded in April 1997 by Hiroki Kikuta with funding from SNK; its staff, including Kikuta, were veterans of Square. While their first releases were the '' ...
(''
Shadow Hearts ''Shadow Hearts'' is a series of role-playing video games, consisting of a trilogy of titles for the PlayStation 2 (PS2) and their predecessor '' Koudelka'' for the PlayStation. The entire series was developed by Sacnoth (later Nautilus); ''Ko ...
''),
Mistwalker is an independent video game development studio. The company was founded in July 2004 by Hironobu Sakaguchi, best known for his work at Square including creating the ''Final Fantasy'' series. The company has created both game franchises such as ' ...
('' Terra Battle'') and
AlphaDream was a video game development company founded in 2000 by Tetsuo Mizuno and Chihiro Fujioka in Tokyo, Japan. In partnership with Nintendo, it produced software for the Game Boy Color, Game Boy Advance, Nintendo DS, Nintendo 3DS, and Nintend ...
(''
Mario & Luigi ''Mario & Luigi'' is a series of role-playing video games developed by AlphaDream and published by Nintendo for the latter's various video game handheld consoles. The series is a spin-off from Nintendo's trademark ''Super Mario'' series, and stars ...
'').


History


Origins

Square was initially established in September 1983 as a software subsidiary of electric power conglomerate Den-Yu-Sha, a company led by Kuniichi Miyamoto. His son
Masafumi Miyamoto is a Japanese investor and businessman best known as the founder of the video game developer Square. Miyamoto graduated from Waseda University in 1983, and joined his father's electric power conglomerate, Den-Yu-Sha as a programmer in their soft ...
, then a part-time employee of the Science and Technology Department at Keio University, had little interest in following his father into the electricity business. After considering different career paths, Miyamoto eventually decided on computer software development at the
Yokohama is the second-largest city in Japan by population and the most populous municipality of Japan. It is the capital city and the most populous city in Kanagawa Prefecture, with a 2020 population of 3.8 million. It lies on Tokyo Bay, south of T ...
branch of Den-Yu-Sha in
Hiyoshi Strand of ginkgo trees at Keio University is a part of the city of Yokohama, Kanagawa Prefecture, Japan. It is located within Kōhoku Ward in the northeast of Yokohama City. Overview It is served by Hiyoshi Station on the Tōkyū Tōyoko L ...
, with a focus on the emerging video game market. Their original offices were based in a former hairdresser's salon. The company's name referred to a golfing term, and represented its aim to face challenges head-on. It also referenced a
town square A town square (or square, plaza, public square, city square, urban square, or ''piazza'') is an open public space, commonly found in the heart of a traditional town but not necessarily a true geometric square, used for community gatherings. ...
, emphasizing a production environment based on cooperation. At the time, video games in Japan were usually created by a single programmer. Miyamoto, on the other hand, believed that graphic designers, programmers, and professional story writers would be needed to keep up with the increasingly complex video game development process fuelled by rapid advancements in computing. During these early years, the group was compared to a
family business A family business is a commercial organization in which decision-making is influenced by multiple generations of a family, related by blood or marriage or adoption, who has both the ability to influence the vision of the business and the willingn ...
; one of the early hires, Shinichiro Kajitani, joined because he was a friend of Miyamoto, and later compared the company at that time to a "college club". To recruit for this new organizational structure, Miyamoto opened an
Internet café An Internet café, also known as a cybercafé, is a café (or a convenience store or a fully dedicated Internet access business) that provides the use of computers with high bandwidth Internet access on the payment of a fee. Usage is generall ...
-like salon in Yokohama and offered jobs to those who demonstrated exceptional programming skills. Among those hired through this method were
Hironobu Sakaguchi is a Japanese game designer, director, producer, and writer. Originally working for Square (later Square Enix) from 1983 to 2003, he departed the company and founded independent studio Mistwalker in 2004. He is known as the creator of the ''Fin ...
and Hiromichi Tanaka, who originally worked there part-time during their university studies, and Hisashi Suzuki, who would go on to become Square's CEO. Miyamoto's initial plan was to recruit from Keio University, but this never materialized.


1985–1987: First games, ''Final Fantasy''

Square's first attempt at a game, and Sakaguchi's first project, was an adaptation of the television game show ''Torin-ingen''. As Miyamoto had not secured the license to adapt it, the show's producers forced Square to cancel the game, prompting its team to be reshuffled. Square's first completed game was ''
The Death Trap is a text adventure developed and published by Square for the NEC PC-8801, NEC PC-9801, and Fujitsu FM-7 in 1984. The game and its supporting computer platforms were only released in Japan. ''The Death Trap'' is the first game developed by Squ ...
'' (1984) for NEC PC-8801, which was also the first title published under the Square brand. Its sequel, ''Will: The Death Trap II'', was released the following year, and was a commercial success. Many of Square's early titles were produced for PC devices, and focused on the
action Action may refer to: * Action (narrative), a literary mode * Action fiction, a type of genre fiction * Action game, a genre of video game Film * Action film, a genre of film * ''Action'' (1921 film), a film by John Ford * ''Action'' (1980 fil ...
genre. Two other successes from the period were ''
Rad Racer ''Rad Racer'', known as in Japan, is a racing video game developed and published by Square for the Nintendo Entertainment System (NES) in 1987. In this game, players drive a Ferrari 328 or a generic Formula One racing machine through a ...
'' and ''
The 3-D Battles of WorldRunner ''The 3-D Battles of WorldRunner'' (shortened to ''3-D WorldRunner'' on the North American box art), originally released in Japan as , is a 1987 Third-person shooter, third-person Shoot 'em up, rail shooter Platform game, platform video game develo ...
''. In 1985, the company completed a licensing agreement with Nintendo to develop titles for the Famicom ( Nintendo Entertainment System). A noted reason for the shift to Famicom development was its more stable hardware compared to PCs, which were constantly undergoing changes to their components and requiring adjustments for different set-ups. Square's first Famicom release was a port of '' Thexder'' (1985), and its first original game was ''
King's Knight is a 1986 scrolling shooter co-developed by Square and Workss, and published by Square for the Nintendo Entertainment System and MSX. The game was released in Japan on September 18, 1986, and in North America in 1989. It was later re-released ...
'' (1986). During this period, the team also hired new developers
Akitoshi Kawazu is a Japanese game designer, director, producer and writer. After joining Square (later Square Enix) in 1985, he went on to become a central developer for the first two ''Final Fantasy'' titles, then acted as creator and lead developer for the ...
and
Koichi Ishii , sometimes credited as Kouichi Ishii, is a video game designer perhaps best known for creating the ''Mana'' series (known as ''Seiken Densetsu'' in Japan). He joined Square (now Square Enix) in 1987, where he has directed or produced every game r ...
, artist
Kazuko Shibuya is a Japanese video game artist. She is best known for her work with Square (now Square Enix), in particular with the ''Final Fantasy'' series. Biography Shibuya was born in 1965. While in middle school, she began creating illustrations and ...
, American programmer
Nasir Gebelli Nasir Gebelli ( fa, ناصر جبلی, also Nasser Gebelli, born 1957) is an Iranian-American programmer and video game designer usually credited in his games as simply Nasir. Gebelli wrote Apple II games for Sirius Software, created his own co ...
, and composer
Nobuo Uematsu is a Japanese composer and keyboardist best known for his contributions to the ''Final Fantasy'' video game series by Square Enix. A self-taught musician, he began playing the piano at the age of twelve, with English singer-songwriter Elton ...
. Yusuke Hirata joined that year as sales manager, and later became the company's publicity manager. In April 1986, Square moved into new offices based in Ginza, noted as one of the most expensive areas for companies to work in; Sakaguchi later speculated Miyamoto was hoping to attract business by appearing affluent. Square was officially founded as an independent company in September of that year with capital of ¥10 million. Sakaguchi was appointed as a Director of Planning and Development, and Hisashi Suzuki became one of the company's directors. Due to the high cost of Ginza rents, the company was forced to move into smaller offices in Okachimachi,
Taitō is a special ward located in Tokyo Metropolis, Japan. In English, it is known as Taitō City. As of May 1, 2015, the ward has an estimated population of 186,276, and a population density of 18,420 persons per km2. The total area is . Thi ...
. Square supported Nintendo's Famicom Disk System, though few of the games created for it were major successes and Square was soon struggling financially. Miyamoto brought together the company's four directors and asked for game proposals the staff would later vote on. Sakaguchi wanted to develop a role-playing video game (RPG), a proposal that had been made feasible due to the production and success of ''Dragon Quest (video game), Dragon Quest'' from
Enix was a Japanese video game publisher that produced video games, anime and manga. Enix is known for publishing the ''Dragon Quest'' series of role-playing video games. The company was founded by Yasuhiro Fukushima on September 22, 1975, as . Th ...
. While sceptical, Miyamoto allowed production of the game on the condition it only had a five-person team. Sakaguchi led development, bringing in Gebelli, Kawazu, Ishii, and Uematsu. Production of the game, eventually called ''
Final Fantasy is a Japanese video game, Japanese science fantasy anthology media franchise created by Hironobu Sakaguchi and developed and owned by Square Enix (formerly Square (video game company), Square). The franchise centers on a series of fantasy and ...
'', proceeded in "fits and starts". Sakaguchi eventually received help from the other team at Square led by Tanaka, which included Shibuya and newcomer debugger Hiroyuki Ito. Production on the game lasted roughly ten months. While shipments of 200,000 units were planned, Sakaguchi persuaded Square to double that number. Released in 1987, ''Final Fantasy'' was a commercial success, selling over 400,000 copies in Japan.


1987–1995: Expansion and notable staff

The success of ''Final Fantasy'' prompted development of ''Final Fantasy II'' in 1988, which established many of the series Recurring elements in the Final Fantasy series, recurring elements. This and four more ''Final Fantasy'' titles would appear on the Famicom and Super Nintendo Entertainment System (Super Famicom), culminating in ''Final Fantasy VI'' in 1994. These and all other projects at Square were developed for Nintendo consoles, including the portable Game Boy. In 1990, Square moved its offices to the Akasaka, Tokyo, Akasaka district, and then to Ebisu, Shibuya in 1992. In April 1991, Square merged with an identically-named dormant company in order to change its share prices. As a result of the merger, Square's foundation was backdated to the other company's July 1966 founding date. At that time, Square drew some of its development funding from loans from Shikoku Bank. Due to the increasing costs of development, the bank sent Tomoyuki Takechi on secondment to be their office manager in 1990. Takechi's secondment lasted until 1994, by which time Square had annual sales worth ¥16 million per year, and he had become inspired by Sakaguchi's vision for the company. In August of that year, Square registered with the Japan Securities Dealers Association to offer shares for public purchase. Sakaguchi was by now a prominent figure within the company, and was promoted to Executive President in 1991. His increasing corporate involvement lessened his creative input, prompting him to give greater influence to director
Yoshinori Kitase is a Japanese game director and producer working for Square Enix. He is known as the director of ''Final Fantasy VI'', ''Chrono Trigger'', ''Final Fantasy VII'', ''Final Fantasy VIII'' and ''Final Fantasy X'', and the producer of the ''Final Fa ...
. Gebelli left Square in 1993, retiring on royalties from the ''Final Fantasy'' series. Miyamoto stepped down as Square's President in 1991 while remaining a major shareholder, and was replaced by Tetsuo Mizuno. In 1991, Suzuki became Vice President. Besides ''Final Fantasy'', other projects were produced which spawned their own series. Kawazu helmed an RPG project for the Game Boy. Released in 1989, ''Makai Toushi SaGa'' (''The Final Fantasy Legend'') spawned the '' SaGa'' series, which Kawazu would continue to be involved over the years. After the release of ''Final Fantasy III'' (1990), Ishii was offered the chance to create his own game, leading to the production of ''Seiken Densetsu: Final Fantasy Gaiden'' (''Final Fantasy Adventure'') for the Game Boy in 1991. Ishii went on to develop additional ''Seiken Densetsu'' titles, released outside of Japan as the ''
Mana According to Melanesian and Polynesian mythology, ''mana'' is a supernatural force that permeates the universe. Anyone or anything can have ''mana''. They believed it to be a cultivation or possession of energy and power, rather than being ...
'' series. A lesser-known series was the Japan-exclusive real-time strategy series ''Hanjuku Hero'', which began in 1988 and focused on parodying conventions of the RPG genre. The company also developed several notable standalone titles including ''Chrono Trigger'', born from a collaboration between Sakaguchi, ''Dragon Quest'' creator Yuji Horii, and ''Dragon Ball'' artist Akira Toriyama; ''Super Mario RPG'', produced in collaboration with Nintendo using characters from the ''Mario (franchise), Mario'' franchise; and the Western-exclusive ''Secret of Evermore''. Speaking in 2001, Sakaguchi noted that while ''Final Fantasy'' was the company's most recognized property, Square's cultivation of several other series meant that it did not have to rely on ''Final Fantasy'' to be profitable. Additional staff joined Square by the 1990s, inspired by the successful ''Final Fantasy'' series; the most notable included Kitase,
Tetsuya Nomura is a Japanese video game artist, designer and director working for Square Enix (formerly Square). He designed characters for the ''Final Fantasy'' series, debuting with ''Final Fantasy VI'' and continuing with various later installments. Addi ...
, Tetsuya Takahashi, and Soraya Saga, Kaori Tanaka. Their first work for Square was on ''Final Fantasy IV'' (1991), which was also designer
Takashi Tokita (born 24 January 1965) is a Japanese video game developer working for Square Enix. He has worked there since 1985, and has worked as the lead designer for ''Final Fantasy IV'' as well as the director of '' Parasite Eve'' and ''Chrono Trigger''. ...
's first project as a full-time employee, and Hiroyuki Ito's first as game designer. Also joining the company was Chihiro Fujioka, who worked on several projects including co-directing ''Super Mario RPG''; Kenichi Nishi, who worked in minor roles on ''Chrono Trigger'' and ''Super Mario RPG''; artist Yusuke Naora, who first worked on ''Final Fantasy VI''; Kazushige Nojima, known for his work on the ''Glory of Heracles'' series; and Motomu Toriyama, who at the time had no experience with game development and worked as a scenario writer. The music staff of Square also expanded, with four more composers being hired between 1990 and 1993. They were Kenji Ito, who contributed to both the ''SaGa'' and ''Mana'' series; Hiroki Kikuta, who worked on both the ''Mana'' series and standalone projects; Yasunori Mitsuda, who would become famous for his work on the '' Chrono'' series; and
Yoko Shimomura is a Japanese composer and pianist primarily known for her work in video games. She graduated from the Osaka College of Music in 1988 and began working in the video game industry by joining Capcom the same year. She wrote music for several game ...
, who was previously a composer for Capcom. In 1995, Square moved its headquarters to the Shimomeguro district in Meguro.


1995–2000: Move to PlayStation, ''The Spirits Within''

Following the release of ''Final Fantasy VI'' and ''Chrono Trigger'', Square staff began planning the next entry in the ''Final Fantasy'' series, and entered the emerging 3D computer graphics, 3D gaming market. A combination of hardware limitations, Nintendo's decision to continue using cartridge games over a CD format for the Nintendo 64, and rising cartridge prices prompted Square to move the in-production '' Final Fantasy VII'' and their other ongoing projects onto Sony's PlayStation. This shift caused a long-standing rift between Square and Nintendo; one Square employee recalled Nintendo telling the company to "never come back". Square's final Super Famicom release was Sting Entertainments ''Treasure Hunter G'', and their first PlayStation release was ''Tobal No. 1'' from DreamFactory, both in 1996. A licensing agreement with Sony was signed in 1996, which stated that Sony would publish Square's next six games. That year, at Square's invitation, Takechi returned and took Mizuno's place as President. Among the staff that worked on ''Final Fantasy VII'' were Kitase as director, Naora as art director, Nomura as a lead artist, and Nojima as scenario writer. Released worldwide in 1997, ''Final Fantasy VII'' was a massive commercial and critical success, and went on to sell ten million units worldwide and bring Square international fame. Four new hires during the period were Shinji Hashimoto,
Yasumi Matsuno is a Japanese video game designer. Matsuno was first introduced to video games in arcades while waiting for the train, and first played '' Space Invaders'' and '' Xevious'' there. He attended Hosei University for foreign policy but dropped ou ...
, Hitoshi Sakimoto, and Masashi Hamauzu. Hashimoto joined in 1995 as promotions producer for ''Final Fantasy VII''. Matsuno, along with a number of other developers, had left Quest Corporation following the release of ''Tactics Ogre'' (1995), and worked with Sakaguchi on ''Final Fantasy Tactics'' (1997). Sakimoto came on board with Matsuno, and worked on the music for his games. Hamauzu joined in 1996, and worked on ''Final Fantasy'' spin-off titles and the ''SaGa'' series. Sakaguchi, working on other projects, took on the role of executive producer for the series beginning with ''Final Fantasy VIII'', and Hashimoto stepped in as producer. Hirata, after holding an administrative position during the Nintendo years, became a game production lead, focusing on introducing new genres into Square's library. Several properties were created or renewed during this period. These included ''Parasite Eve (video game), Parasite Eve'', based on a Parasite Eve (novel), novel of the same name by Hideaki Sena; '' Front Mission'', which began on the Super Famicom but was transferred to the PlayStation beginning with its second entry ''Front Mission 2''; and the ''Final Fantasy'' spin-off series ''List of Chocobo media, Chocobo'', starring an incarnation of the Chocobo, titular mascot character. During the mid-1990s, Square launched an initiative to give teams of younger staff members a chance to create experimental titles on smaller budgets; titles born from this period included ''Xenogears'', ''Soukaigi'', and ''Another Mind (video game), Another Mind''. Also during the mid-to-late 1990s, several staff members departed Square due to creative differences or a desire to work on their own projects. These included Takahashi and Tanaka, Fujioka, Nishi, Kikuta, Mitsuda, and ''Mana'' artist Shinichi Kameoka. In April 2000, Suzuki was appointed Square's new President, while Takechi became a company chairman. Also at this time, two outside directors were appointed, Kenichi Ohmae of Ohmae & Associates and Makoto Naruke of Microsoft. The corporate reshuffle was intended to strengthen Square's overseas connections and bring in technical and administrative support for future digital and online content. Alongside this, Yoichi Wada joined the company as a company director and eventually COO. In August 2000, Square was listed on Tokyo Stock Exchange's first section, which includes the largest companies on the exchange. While their relations with Nintendo remained poor, Square supported other platforms including the WonderSwan and Microsoft Windows. Support for the PlayStation continued late into its lifecycle with multiple releases including ''Threads of Fate'' (1999) and ''Vagrant Story'' (2000). The company also began work on PlayOnline, an online platform which would host the company's online store and web content as well as online services for their games. Sakaguchi was mostly based in Hawaii by this point; in addition to leading production on ''Final Fantasy IX'' (2000), he also worked at the 1997-established Square Pictures studio on a feature film based on the ''Final Fantasy'' series. Called '' Final Fantasy: The Spirits Within'', it was planned as Sakaguchi's first push towards cross-media storytelling; however, the project ran over budget and ended up costing Square and co-producer Columbia Pictures US$137 million. During this period, Sakaguchi also created the concept for ''Final Fantasy XI'', the company's first MMORPG, developed by the ''Chrono'' team and led by Ishii.


2001–2003: Final years, merger

Upon its release in 2001, ''The Spirits Within'' was met with mixed critical reception, and grossed only $85 million. Labelled as a box-office bomb, the film damaged Square's finances, and led to the closing of Square Pictures. Following both the failure of ''The Spirits Within'' and a delay to ''Final Fantasy X'' (2001) for the PlayStation 2, Square suffered a financial loss for the first time, prompting Sakaguchi, Takechi, and director Masatsugu Hiramatsu to resign from their positions. Sakaguchi was kept on as executive producer for ''Final Fantasy'', while Takechi and Hiramatsu were retained as external consultants. This period left Sakaguchi in a state of low morale. In late 2001, Suzuki stepped down as President, and was replaced by Wada. Yosuke Matsuda became Senior Vice President. Ito also left during this period to work as a freelance composer. Following its financial losses, Square agreed to sell Sony a 19% stake in the company. Due to their still precarious financial situation and the softening console rivalry between Sony and Nintendo with the release of Microsoft's Xbox (console), Xbox, Square successfully reached out to Nintendo to begin development for their hardware again. Square began development on ''Final Fantasy Crystal Chronicles (video game), Final Fantasy Crystal Chronicles'' for the GameCube in late 2001. Under Wada, the company underwent restructuring with the intent of streamlining production and resources, and cutting development costs to increase profits. It also began production on a direct sequel to ''Final Fantasy X'', titled ''Final Fantasy X-2'' (2003); this broke with the common approach under Sakaguchi, who disliked direct sequels. ''Final Fantasy X-2'' was Sakaguchi's last credited project at Square, and he left the company in 2003. Another project in development at the time was ''Kingdom Hearts (video game), Kingdom Hearts'' (2002), Nomura's directorial debut. The game was a collaboration between Square and The Walt Disney Company, blending Disney characters with ''Final Fantasy'' elements in an original story from Square. ''Kingdom Hearts'' was also Shimomura's last project as an in-house composer before she left and went freelance in 2002. A merger with rival company Enix had been under discussion since 2000, but Square's financial losses prompted Enix to halt discussions. Following the commercial success of ''Final Fantasy X'' and ''Kingdom Hearts'', talks went ahead on the merger with Enix as Square's finances stabilized; Wada described it as a merger of two companies "at their height". Despite this, some shareholders had doubts about the merger, notably Miyamoto, who would find himself holding significantly less shares and having a smaller controlling stake if the deal went ahead as initially planned. Miyamoto's issue was eventually resolved by altering the exchange ratio to one Square share for 0.81 Enix shares, and the merger was greenlit. The merger resulted in Square Enix being formed on April 1, 2003, with Enix as the surviving corporate entity and Square dissolving its departments and subsidiaries into the new company. Around 80% of Square's staff transitioned into Square Enix.


Structure


Development and publishing

During reports on the merger with Enix, Takashi Oya of Deutsche Securities described Square as "[doing] everything by itself" compared to Enix's tradition of outsourcing development. During Square's first years, there was no set development structure, with the ten-person staff freely shifting between roles and projects. After the first couple of years, there were two loosely-defined production groups led by Sakaguchi and Tanaka respectively. Following the release of ''Final Fantasy IV'', Sakaguchi divided the production team, assigning different staff members to the ''Final Fantasy'', ''SaGa'' and ''Mana'' series. A secondary studio was founded in Osaka in 1990, with ''Final Fantasy Legend III'' (1991) as their first project. By 1997, the company was divided into seven development divisions, expanded to eight that year with a further two in Osaka. In 1998, the old development divisions were restructured into Production Departments, and the Osaka branch was closed down. The system was reshuffled again in 2002 to promote "greater understanding", and allow for reassignment between divisions. Among the heads of divisions at this time were Kitase, Kawazu, Tanaka, Matsuno and Hirata. Following the merger with Enix, the eight divisions were incorporated into the new company, with two additional divisions brought in from Enix. Square's first Western branch, SquareSoft, was established in 1989 in Redmond, Washington for publishing and development support. A second Western R&D subsidiary called Square LA was founded in 1995 in Marina del Rey, California, and was renamed Square USA in 1996. In 1997, a second branch of Square USA was opened in Honolulu, Hawaii to focus on new interactive entertainment research. Square Europe was founded in 1998 in London, England, focusing on publishing in Europe. Square also partnered with several different distribution partners in Europe, including Crave Entertainment, Infogrames (later Atari Europe), and Ubisoft. After opening their North American offices, Square began publishing selected titles under the "SquareSoft" brand. Square's presence in the West during the 1980s and 1990s was small; RPGs were not popular in the North American market, and Square's presence in Europe was limited. A notable third-party game localized and published by Square in North America was the original ''Breath of Fire (video game), Breath of Fire'', as developer Capcom had a busy schedule at the time. In the 1990s, Square's first six PlayStation releases were published by Sony. In May 1998, Squaresoft formed a North American and Japanese joint-venture partnership with Electronic Arts in order to presence the company's titles in North America and Japan. The North American partnership - Square Electronic Arts L.L.C. was 30% owned by Electronic Arts and handled the publishing of Square's titles in North America following the end of Sony's publishing contract. The Japanese partnership - Electronic Arts Square Co, Ltd. was 30% owned by Square, and handled the publishing of EA's titles in Japan following the end of their partnership with JVC, Victor and their Electronic Arts Victor subsidiary. On February 19, 2003, to coinside with the Square Enix merger, Square announced that both ventures would cease operations in March, with the company certifying that the North American venture achieved the above-mentioned initial purpose of its establishment. EA's stake in Square Electronic Arts was purchased by Square, while Square's stake in Electronic Arts Square was purchased by Electronic Arts.https://www.hd.square-enix.com/jpn/ir/pdf/0301-200302190000-01.pdf The SquareSoft company itself remained, rebranded under the Square Enix name. The original ''Final Fantasy'' was published in North America in 1990 by Nintendo of America near the end of the Nintendo Entertainment System (NES) lifecycle, resulting in its two NES sequels being passed over for localization at that time. Many other Square titles also remained exclusive to Japan, for reasons including design complexities, low graphical quality, and technical difficulties. Notable localization staff during the 1990s included Kaoru Moriyama, Ted Woolsey, Seth Luisi, Michael Basket, Richard Honeywood, and Alexander O. Smith.


Subsidiaries and affiliates

Between 1986 and 1988, Square led a collective of game developers dedicated to the production of games for the Famicom Disk System. The Square-owned label, called Disk Original Group (DOG), included Square, HummingBirdSoft, System Sacom, Microcabin, Carry Lab, Thinking Rabbit and Xtalsoft. The coalition was formed to pool financial resources, as individual development for the then-small companies would have been potentially crippling. The Famicom Disk System was rendered defunct by 1988 due to increased storage capacity in standard Famicom ROM cartridges. In 1995, Square helped establish DreamFactory as an affiliate studio, which developed fighting-based titles for the PlayStation and PS2. DreamFactory became an independent company in 2001 after Square transferred their shares. A later subsidiary called Escape was established in March 1998 and featured staff from DreamFactory. It only produced ''Driving Emotion Type-S'' (2000) before being liquidated in 2003. The company held a stake in ''Bushido Blade (video game), Bushido Blade'' developer Lightweight (company), Lightweight, until it was bought out by Genki (company), Genki. A publishing brand called Aques was established by Square in 1996. Standing for "Advanced QUality Entertainment and Sports", and also acting as an anagram of Square's name, the brand was intended for publishing non-RPG titles such as Sports video game, sports games. That same year, DigiCube was also established. Founded by Square as a product distributor through convenience stores in Japan, it expanded into book publishing, stocked games from other companies, and at one point published games under its own brand. DigiCube survived the Square Enix merger, though it declared bankruptcy in 2004 after years of declining sales. In 1999, Square created a number of subsidiaries with dedicated roles: Square Enix Image Studio Division, Square Visual Works to focus on producing CGI animation, Square Sounds for music and sound effects, Squartz for quality control and user support, and Square Next to support smaller game projects. Following the success of ''Final Fantasy VII'' in 1997, Sakaguchi founded a dedicated CGI film studio called Square Pictures in Hawaii; his aim was to both develop ''The Spirits Within'' and help with further development of Square's CGI technology. Square Pictures produced only one more feature following ''The Spirits Within''; a CGI short called "Final Flight of the Osiris" that later formed part of the 2003 anthology film ''The Animatrix''. By the end of 2001, Square Pictures was dissolved and merged into Visual Works. In 2002, Square Next was rebranded as The Game Designer Studio, with ownership between Square's Product Development Division 2 and Kawazu. The aim was to allow for development of games for Nintendo consoles without impacting production on Sony platform games. The Game Designers Studio was absorbed back into Square Enix after the completion of ''Crystal Chronicles'', first renamed to SQEX Corporation and eventually dissolved entirely in 2010. Square Sounds was dissolved into the main company in March 2002 as an internal division, a move attributed to cost cutting. All the other subsidiaries were folded into Square Enix during the merger, with Visual Works becoming its own dedicated department.


Acquisitions

In January 1994, Square acquired developer Cobra Team, turning it into a subsidiary called Solid and focusing their work on cooperating with external developers. G-Craft, developers of the ''Front Mission'' series, had a close relationship with Square due to their support of the property. Square bought out G-Craft and incorporated it in 1997 during production of ''Front Mission 2''. In 2002, ''Ogre Battle'' developer Quest Corporation withdrew from game development and was bought by Square. Absorbed and repurposed into a production division, their first project was ''Final Fantasy Tactics Advance'' (2003).


Legacy

In a 2006 interview on the history of Square Enix, César A. Berardini of ''TeamXbox'' noted that many considered ''Final Fantasy VI'' to be one of the best RPGs and games of the 2D gaming era. In 1992, Nintendo's Shigeru Miyamoto noted the impact of ''Final Fantasy'' on Japanese role-playing games, stating ''Final Fantasy''s "interactive cinematic approach" with an emphasis on "presentation and graphics" was gradually becoming "the most common style" of Japanese RPG at the time. ''Makai Toushi SaGa'' was not only the first RPG developed for the Game Boy, but the first of Square's games to sell one million units. The ''Final Fantasy'' series and several specific games within it have been credited for introducing and popularizing many concepts that are today widely used in console RPGs, both in story and gameplay. ''Final Fantasy VII'' for the PlayStation is attributed with boosting sales for the PlayStation console, and popularizing the RPG genre both for that platform and in general, after a prolonged lack of success outside Japan. In a 2012 interview article with Sakaguchi, ''Eurogamer''s Simon Parkin noted Square's legacy as being defined by the ''Final Fantasy'' series despite having developed multiple other notable series and games. Several of its standalone releases including ''Parasite Eve'' and ''Vagrant Story'' have also remained popular and well-remembered since their release.


Related studios

Several former Square staff members went on to found notable development studios and other ventures, sometimes working with Square Enix in later years. Kikuta, frustrated at the rigid hierarchy of Square, left and founded
Sacnoth renamed in 2002, was a Japanese video game developer based in Tokyo. The company was founded in April 1997 by Hiroki Kikuta with funding from SNK; its staff, including Kikuta, were veterans of Square. While their first releases were the '' ...
in 1997, which would become known for the ''
Shadow Hearts ''Shadow Hearts'' is a series of role-playing video games, consisting of a trilogy of titles for the PlayStation 2 (PS2) and their predecessor '' Koudelka'' for the PlayStation. The entire series was developed by Sacnoth (later Nautilus); ''Ko ...
'' series; he left Sacnoth in 1999 following the release of his project ''Koudelka'' and founded the music label Nostrilia. Takahashi and Tanaka, along with other ''Xenogears'' developers who wanted to work outside the ''Final Fantasy'' series, founded
Monolith Soft trading as Monolith Soft, is a Japanese video game development studio originally owned by Namco (later Bandai Namco) until being bought out by Nintendo in 2007. The company was founded in 1999 by Tetsuya Takahashi with the support and coope ...
in 1999 and went on to develop multiple projects, including further '' Xeno'' titles. Nishi and a few others he knew founded several studios over the years including Love-de-Lic (''Moon: Remix RPG Adventure''), Skip Ltd. (''Chibi-Robo!''), and Punchline (company), Punchline (''Rule of Rose''). Kameoka and other developers who worked on ''Legend of Mana'' (1999) founded 1-Up Studio, Brownie Brown in 2000, and ended up working with Square Enix on the ''Mana'' series with ''Sword of Mana''. Mizuno founded developer
AlphaDream was a video game development company founded in 2000 by Tetsuo Mizuno and Chihiro Fujioka in Tokyo, Japan. In partnership with Nintendo, it produced software for the Game Boy Color, Game Boy Advance, Nintendo DS, Nintendo 3DS, and Nintend ...
in 2000, with Fujioka joining soon after; the company is best known for its work on the ''
Mario & Luigi ''Mario & Luigi'' is a series of role-playing video games developed by AlphaDream and published by Nintendo for the latter's various video game handheld consoles. The series is a spin-off from Nintendo's trademark ''Super Mario'' series, and stars ...
'' series. Staff members from Square Pictures, including ''The Spirits Within'' co-director Motonori Sakakibara, established Sprite Animation Studios in Hawaii in 2002. Sakaguchi, following a period of low morale after the failure of ''The Spirits Within'', decided to re-enter game development. He founded
Mistwalker is an independent video game development studio. The company was founded in July 2004 by Hironobu Sakaguchi, best known for his work at Square including creating the ''Final Fantasy'' series. The company has created both game franchises such as ' ...
in 2004, which has since produced series such as ''Blue Dragon (video game), Blue Dragon'' and ''Terra Wars'' and standalone projects such as ''Lost Odyssey'' and ''The Last Story''. After his resignation from Square, Takechi founded music label Dreamusic with Kazunaga Nitta. Both Mitsuda and Sakimoto formed independent music studios; Mitsuda formed Procyon so he could work while maintaining his health, while Sakimoto founded Basiscape to give himself freedom to work on a wider variety of projects.


References


Notes


Further reading


External links


Square Co., Ltd
Official website (archives) Wayback Machine
Square Soft Inc
Official website (archives)
Square USA
Official website (archives)
History of Enix and Square (Square Enix's site)
{{DEFAULTSORT:Square (Company) Square (video game company), Square Enix Defunct video game companies of Japan Video game development companies Video game publishers Software companies based in Tokyo Video game companies established in 1986 Video game companies disestablished in 2003 Japanese companies established in 1986 Japanese companies disestablished in 2003