Square Enix is Embracing a New Strategy; it will Involve Layoffs!

The Japanese company has also realized that console exclusivity is not very good for them either, and they want to release quality games instead of overwhelming the audience with quantity.


Square Enix has released a mid-term business plan that runs from the fiscal year that began April 1 to the fiscal year that ends March 31, 2027. The title is quite telling: “Square Enix Reboots and Awakens: 3 Years of Laying the Foundation for Long-term Growth”. The purpose of the revision of the business plan is to overcome the difficulties of the previous medium-term plan (low profits in the high-definition games segment, inefficient portfolio management by franchise, shortcomings in Square Enix’s management infrastructure).

The strategy consists of four pillars and initiatives. The first is to improve productivity by optimizing the development footprint in the digital entertainment business. They will focus on developing titles that deliver the “fun” that only Square Enix can create and building the development structure. The second is to diversify revenue opportunities by strengthening customer touch points. To this end, they will shift to a multi-platform strategy, build continuous customer touch points of our titles by strengthening digital sales, create interaction with customers by increasing the sophistication of the publishing function, and create the opportunity for new revenue by offering IP across a range of entertainment experiences.

The third is to implement initiatives to create additional fundamental stability. To this end, they will rebuild overseas business divisions from the ground up. In Japan, they will introduce organizational and human resource allocation policies and improve business infrastructure by implementing the PDCA cycle in a timely and appropriate manner. Fourth, in allocating capital, they will strike a balance between shareholder returns and growth investments. They have earmarked a maximum of ¥100 billion for total strategic investment over a three-year period (¥20 billion for share buybacks next year).

Layoffs were also made, with the U.S. and European divisions resorting to layoffs. Publishing, IT and Square Enix Collective, the indie division, will be the most affected, and those who will be laid off will find out later this week. So a multiplatform strategy with fewer games and even fewer people…

Source: Gematsu, Square Enix, VGC

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