Square Enix has today confirmed the cancellation of multiple projects that now “don’t fit with its vision of long-term growth” after unveiling a new strategy for upcoming games in its latest financial reports.
On top of that, the company is set to lay off an unannounced number of employees of its American and European wings as part of its ongoing restructuring.
Square Enix president Takashi Kiryu informed employees about the upcoming layoffs in an internal meeting on Monday, May 14 (thanks VGC for first coverage). While we don’t yet know the scale of this planned layoff, the staff were told people working in publishing, IT, and Square Enix’s Collective indie games division will be most affected. Any impacted employees will be individually informed later this week, VGC suggested. However, many of Square’s main Slack channels were reportedly locked after the internal meeting.
Square Enix earlier indicated its planned company-wide restructuring following a significant drop in its estimated profit. However, it’s only now we are seeing it in action. Dot Esports had reported earlier today about the company’s multiplatform pivot for its AAA games as part of its medium-term business plan dubbed ‘Square Enix reboots and awakens.’
The restructuring ties in with the company’s strategy of “internal development” and its renewed focus on “quality over quantity,” which also explains the cancellation of multiple unannounced projects. While this was indicated earlier in March, the Japanese corporation has made it official and explained the reasons in its latest fiscal report.
With the stated goal of “long-term growth,” Square Enix is banking on this three-year strategy to pull itself out of its poor fiscal performance. As explained in the report, Square is set to bring their upcoming AAA games to multiple platforms as opposed to their erstwhile PlayStation-centric approach. The three recent entries to the company’s flagship Final Fantasy series—Final Fantasy 7 Remake, Final Fantasy 16, and Final Fantasy 7 Rebirth—launched as timed exclusives on Sony’s console. Additionally, Square wants to move away from overreliance on external developers and bring “bring more capabilities in-house.”
The now-canceled projects, one can surmise, didn’t fit with these two strategies. The financial report explains, “A project-by-project review of continued development feasibility found these particular efforts to be incompatible with the Group’s revised approach to the development of HD games, which reflects such objectives as multiplatform development and the strengthening of internal development capabilities.”
