Square (video game company)
was a Japanese video game company founded in September 1986 by Masafumi Miyamoto. It merged with Enix in 2003 to form Square Enix. The company also used SquareSoft as a brand name to refer to their games, and the term is occasionally used to refer to the company itself. In addition, "Square Soft, Inc" was the name of the company's American arm before the merger, after which it was renamed to "Square Enix, Inc".
History
Square originated in October 1983 as a computer game software division of Den-Yu-Sha, a power line construction company owned by the father of Masafumi Miyamoto, the eventual founder of Square Co Ltd in 1986. While at the time game development was usually conducted by only one programmer, Masafumi Miyamoto believed that it would be more efficient to have graphic designers, programmers and professional story writers working together on common projects. Square's first two titles were The Death Trap and its sequel ', both designed by part-time employee Hironobu Sakaguchi and released on the NEC PC-8801. Despite an initial reluctance to develop for video game consoles, Square entered the Nintendo Famicom market in December 1985 with the porting of Thexder.In September 1986, Square spun off from Den-Yu-Sha and became an independent company officially named Square Co., Ltd. Sakaguchi then became a full-time employee as the Director of Planning and Development of the company. 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, inspired by Enix's success with the genre, Dragon Quest. With 400,000 copies sold, Final Fantasy spawned multiple sequels over the years and became Square's main franchise.
Square has also made other widely known games such as Chrono Trigger, Chrono Cross, Secret of Mana, Legend of Mana, Xenogears, Brave Fencer Musashi, Parasite Eve, Parasite Eve 2, Saga Frontier, Romancing Saga, Vagrant Story, Kingdom Hearts, and Super Mario RPG. 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.
On February 8, 2001, due to its first quarterly loss since going public, "the company implemented a restructuring plan for its Japanese corporate staff. Three key figures have been moved around in the company ranks, resigning from their current positions to take responsibility for the losses, and have been reassigned to different positions. Hironobu Sakaguchi, the father of the Final Fantasy series, will no longer be vice president, and will instead be known as an "executive producer." Additionally, company president Tomoyuki Takeshi will become a contractual consultant for the company, with director Masahi Hiramatsu now taking the role of executive consultant.".
A merger between Square and its competitor Enix was in consideration since at least 2000; however, the financial failure of their first movie, ' made Enix hesitant to join with a company which was losing money. With the company in its second year of financial loss, Square approached Sony for a capital injection and on October, 8th 2001, Sony Corp purchased 18.6% stake in Square to bandage their loss.
In an interview with GIA.com in 2001, when asked "Are you ever worried that Square will become too heavily dependent on the Final Fantasy name?" Hironobu Sakaguchi responded that "Avoiding that has actually been one of Square's goals for a long time. It is our aim to try and develop a few more major franchises for the company; that has always been on our minds."
On November 26, it was reported that Square CEO Hisashi Suzuki was to step down as the company's President and that COO Yoichi Wada was to replace him in December with a restructuring plan for the company.
On May 28, 2002 it was detailed that in Wada's restructuring of the company, that "while Square formally took a development style where teams were formed and dispersed per project, developers will now be fixed into divisions. Source codes and resources will be shared for efficiency, and employees will receive varying bonuses depending on the profit of their division. By settling developers into groups, Square also aims for the developers to re-use the titles they have developed, making game development more cost efficient. Development costs- originally 2–3 Billion yen, are expected to fall to 1 Billion yen." In addition, the company revealed plans to release two Final Fantasy X spinoffs that would later become Final Fantasy X-2.
Following the success of both Final Fantasy X and Kingdom Hearts, the company recovered its stability and recorded the highest operating margin in its history in fiscal year 2002. It was announced on November 25, 2002 that Square and Enix's previous plans to merge were to officially proceed. As described by Yoichi Wada "Square has also fully recovered, meaning this merger is occurring at a time when both companies are at their height." Despite this, some shareholders had doubts about the merger, notably Square's original founder and largest shareholder, Masafumi Miyamoto, who would find himself holding significantly less if the two RPG behemoths were to go ahead with the deal. 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, he said." Masafumi Miyamoto's issue was eventually resolved, by altering the exchange ratio of one Square share for 0.81 Enix shares, thus greenlighting the merger, and on April 1, 2003, Square Enix was formed.
Subsidiaries and related corporations
In Japan
The Disk Original Group was a union formed of no less than seven Japanese video game companies: Square Company, Limited, Micro Cabin, Thinking Rabbit, Carry Lab, System Sacom, XTALSOFT, and HummingBirdSoft. Founded July 14, 1986, Square took the lead in this alliance to produce games on the Famicom Disk System. Because Square headed DOG, all DOG titles were published under the name Square. In reality, however, Square only produced four of the eleven games published under the DOG label. Excluding Tobidase Daisakusen which sold 500,000 copies, the remaining games were commercial failures.DigiCube was established in February 1996. It was formed to market and distribute games and related merchandising in Asia. It declared bankruptcy in October 2003.
Escape, Inc. was established in 1998. They developed the racing game Driving Emotion Type-S.
Square Visual Works, Square Sounds, Squartz and Square Next were all founded in June 1999. All were subsequently absorbed into Square Co., Ltd. in 2001 and 2002. Once Square merged with Enix, Square Visual Works was renamed Visual Works and produces CG animations for Square Enix and Eidos Interactive intellectual properties.
Quest Corporation was an independent software development studio established in July 1988, best known for the Ogre Battle series. Several team members, including Yasumi Matsuno, Hiroshi Minagawa and Akihiko Yoshida, left Quest in 1997 to join Square, where they worked on several titles for the Sony PlayStation, including Final Fantasy Tactics and Vagrant Story. In June 2002, Quest was acquired by Square.
'Taito was a shell corporation founded in June 1999 by Square. It was re-purposed in 2002 in order to create video games for the Nintendo GameCube, even though Square had an exclusive deal with Sony Computer Entertainment to create games only for PlayStation consoles at the time. To evade that deal, Square held only 49% of the shares while Akitoshi Kawazu, head of Square's Product Development Division-2, held 51%. The formation of a new company also made it possible to take advantage of Nintendo’s Q fund for new game developers who develop for GameCube. Game Designers Studio only released a single game, Final Fantasy Crystal Chronicles. Final Fantasy Crystal Chronicles was de facto developed by Square Enix's Product Development Division-2 with publishing by Nintendo. Square merged with Enix in 2003 and formed Square Enix while Crystal Chronicles was in development. Square Enix later acquired 100% of Game Designers Studio and renamed it to SQEX Corporation. After the takeover of Taito Corporation in 2005, Square Enix merged it with SQEX in March 2006. The merged subsidiary took on the Taito Corporation name, but SQEX Corporation was the surviving company. On February 1, 2010, it was renamed to Taito Soft Corporation'' and dissolved on March 11, 2010, effectively ending the company that started out as The Game Designers Studio.
Abroad
Square Soft
Square Soft, Inc. was established as the North American subsidiary of Square in March 1989. It was responsible for both the production and distribution of North American localizations of Square titles during the 16-bit era, and continued to produce English language localizations of Square games in the 32-bit era. It has also been responsible for localizing a number of non-Square titles, including Capcom's Breath of Fire for the SNES. It developed the game Secret of Evermore for the SNES.Unlike its Japanese parent company or other subsidiaries, Square Soft was never dissolved and is currently known as Square Enix, Inc. Square Soft's original headquarters were in Redmond, Washington. Square Enix, Inc. is currently located in El Segundo, California.
Square USA
Square USA, Inc. was established in August 1995. It operated as a high-end computer-generated imagery research and development studio, and was integral in the production of graphics for Square-produced games since the beginning of the 32-bit era. Its headquarters were in Los Angeles, California and Honolulu, Hawaii. Like sister company, Square Soft, Inc., Square USA was a wholly owned subsidiary of Square Co., Ltd.Square Europe, Limited was established in December 1998 to localize and market Square-developed games in Europe and Australia. Located in London, UK, Square Europe was granted exclusive publishing rights in Europe and other PAL territories for all interactive entertainment titles developed by Square.
Square Pictures
Square Pictures was located in Honolulu, Hawaii and specialized in computer-animated films for Square. They started in 1997, with the goal to eventually "incorporate the movie division's technical advances into its games, spinning a cycle of creativity with games inspiring movies that in turn improve games." In 1998 it was announced that Square was partnering with Sony/Columbia to bring a full-length Final Fantasy movie to theaters "in the ambitious goal to be the first to simulate human emotions and movements through computer graphics." and in late 2000, the film was revealed as . Sony released the film on July 11, 2001, but could only muster mixed reviews. Massive cost overruns resulted in the film's box-office failure.They also created a short film for the Wachowskis that was a prequel to The Matrix Reloaded titled the Final Flight of the Osiris. The short featured photo realistic characters, just as The Spirits Within, performing acrobatic moves in action sequences. The film was shown in theaters alongside Dreamcatcher and was meant to set the stage for the two Matrix sequels. The short was released on DVD on June 3, 2003 as part of The Animatrix. Square Pictures is now a consolidated subsidiary of Square Enix as Visual Works.
Electronic Arts Square
Electronic Arts Square, Kabushiki kaisha was a joint venture between Square and U.S. video game publisher Electronic Arts responsible for publishing EA's games in Japan. Square Electronic Arts, LLC was another joint venture between the two companies responsible for publishing Square's games in North America. Announced on April 27, 1998, Square EA was based in Costa Mesa, California and operated under the supervision of Square president and CEO Jun Iwasaki. Under the terms of the agreement, Electronic Arts owned 30 percent of Square EA, and Square owned 30 percent of EA Square.Square EA proved to be very successful, and during its five years of existence released a higher proportion of localized Square titles to the American market than ever before. EA Square, on the other hand, was somewhat less successful, and struggled to make an impact on the Asian video game market. During its five-year run, EA Square handled the Japanese releases of games such as ', Quake III: Team Arena, SSX and its sequel SSX Tricky, and various video games based on the Star Wars franchise. EA Square had also developed a game, X-Squad, which was released for the PlayStation 2 during its launch.
Following the announcement of the merger between Square and former competitor Enix in 2003, Square purchased back Electronic Arts' stake in Square EA, and folded it back into Square Soft, Inc., its North American subsidiary, which was subsequently renamed Square Enix U.S.A., Inc. and continues to publish Square Enix's titles in North America. Conversely, EA did the same with Square's stake in EA Square, which was subsequently renamed Electronic Arts K.K., and continues to publish EA's titles in Japan.