Square (video game company)

Square began not as a video game giant, but as a software subsidiary of Den-Yu-Sha, an electric power conglomerate led by Kuniichi Miyamoto. His son, Masafumi Miyamoto, had little interest in following his father into the electricity business. Instead, he became a software developer at the Yokohama branch of Den-Yu-Sha in Hiyoshi, 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, 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 advances in computing and video game development. During these early years, the group was compared to a family business; 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 organized a salon in Yokohama and offered jobs to those who demonstrated exceptional programming skills. This led to the part-time hiring of university students Hironobu Sakaguchi and Hiromichi Tanaka, as well as 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.

The Five-Person Gamble

Square's first attempt at a game 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 (1984) for NEC PC-8801, a text adventure set in a war-torn African nation. The Death Trap was the first game published under the Square brand. Its sequel, Will: The Death Trap II, was released the following year to commercial success. Many of Square's early titles were produced for PC devices, and focused on the action genre. In 1985, the company negotiated a licensing agreement with Nintendo to develop titles for the Family Computer. The company shifted to developing for the Famicom to benefit from its stable hardware, compared to the constantly changing components of PCs. Square's first Famicom release was a port of the run and gun game Thexder (1985), and its first original game was the scrolling shooter King's Knight (1986). During this period, the team also hired new developers Akitoshi Kawazu and Koichi Ishii, artist Kazuko Shibuya, Iranian-American programmer Nasir Gebelli, and composer Nobuo Uematsu. 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 operate; Sakaguchi later speculated Miyamoto was hoping to attract business by appearing affluent. Square was re-established as an independent developer in September of that year with capital of ¥10 million, buying the original Square gaming division from Den-Yu-Sha in December. 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. Square began struggling financially following multiple commercial failures for Nintendo's Famicom Disk System peripheral. Miyamoto asked the company's four directors for game proposals, with plans to have their staff vote on the best idea. Sakaguchi proposed making a role-playing video game (RPG), believing it to be a viable project after the success of Enix's Dragon Quest (1986). While skeptical, Miyamoto allowed production of the RPG 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, 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. Final Fantasy was released in 1987 to commercial success, selling over 400,000 copies in Japan. It saw greater sales success in North American when it was released in 1989, selling 700,000 copies. Two other Japanese successes from 1987 were Rad Racer and The 3-D Battles of WorldRunner.

When was Square founded and by whom?

Square was founded by Masafumi Miyamoto as a software subsidiary of Den-Yu-Sha, an electric power conglomerate led by his father Kuniichi Miyamoto. The company began operations in a former hairdresser's salon in Hiyoshi, Yokohama.

What was Square's first completed game and when was it released?

Square's first completed game was The Death Trap, which was released in 1984 for the NEC PC-8801. This text adventure set in a war-torn African nation was the first game published under the Square brand.

When did Square move its headquarters to the Shimomeguro district in Meguro?

Square moved its headquarters to the Shimomeguro district in Meguro in 1995. This relocation occurred after the company had previously moved to Ginza in April 1986 and later to smaller offices in Okachimachi, Taitō.

When was Square Enix formed and which company survived the merger?

Square Enix was formed on the 1st of April 2003, with Enix as the surviving corporate entity. Square dissolved its departments and subsidiaries into the new company, and around 80% of Square's staff transitioned into Square Enix.

How much did the film Final Fantasy: The Spirits Within cost Square and when was it released?

Final Fantasy: The Spirits Within cost Square and co-producer Columbia Pictures US$137 million and was released in 2001. The film grossed only $85 million, leading to a financial loss for Square and the closure of Square Pictures.

When did Square list on the Tokyo Stock Exchange's first section?

Square was listed on the Tokyo Stock Exchange's first section in August 2000. This section includes the largest companies on the exchange and marked a significant milestone in the company's history.

The Nintendo Rift

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 gaming market. With the production of Final Fantasy VII, Square decided to shift their projects to Sony Computer Entertainment's new PlayStation console, prompted by the affordability of CD-ROM distribution, compared to Nintendo's continued use of expensive cartridges. This shift caused a long-standing rift between Square and Nintendo; one Square employee recalled Nintendo telling the company to "never come back". In 1996, Square's final project with Nintendo was Sting Entertainments Treasure Hunter G for the Super Famicom, while the company debuted DreamFactory's Tobal No. 1 for the PlayStation that same year. Soon after, the company signed a licensing agreement with Sony, who gained the exclusive right to publish Square's next six games in the West. Square continued work on Final Fantasy VII, with Kitase as director, Naora as art director, Nomura as lead artist, and Nojima as scenario writer. Released worldwide in 1997, Final Fantasy VII was a worldwide commercial and critical success, bringing Square international fame. Also in 1997, at Square's invitation, Takechi returned and took Mizuno's place as President. Three new hires during the period were Shinji Hashimoto, Yasumi Matsuno, 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). 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 went from an administrative position to lead producer, focusing on diversifying Square's library into new game genres. Several properties were introduced during this period. These included Parasite Eve, based on a 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; and the Final Fantasy spin-off series Chocobo, starring an incarnation of the titular mascot character. As Square was estranged from Nintendo at the time, the company supported other platforms including the WonderSwan and Windows. Late in the PlayStation's lifecycle, Square continued to support the console with multiple releases, such as Threads of Fate (1999) and Vagrant Story (2000). The company also began work on PlayOnline, a digital storefront and a platform for online game services and web content. During the late 1990s, Square launched an initiative to give teams of younger staff members a chance to create experimental titles on smaller budgets. Among such titles were Xenogears, Soukaigi, and Another Mind. Around this time, 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.

The Box Office Bomb

In addition to leading production on Final Fantasy IX (2000), Sakaguchi also worked at the 1997-established Square Pictures studio on a Final Fantasy feature film. Titled 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. Upon its release in 2001, The Spirits Within was met with mixed critical reception, and grossed only $85 million. Labeled as a box-office bomb, the film damaged Square's finances, and led to the closure of Square Pictures. Following both the failure of The Spirits Within and a delay of 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. Kenji Ito also left during this period to work as a freelance composer. Prior to the film's release, rival company Enix was proposing merging with another game company to alleviate development costs, opening serious discussions with Square in 2000. Square's financial losses with The Spirits Within prompted Enix to halt discussions. Under Wada, the company underwent restructuring with the intent of streamlining production and resources, and cutting development costs to increase profits. After evaluation of its financial position, and with changes to the console war due to Microsoft's Xbox, Square opened talks with Nintendo for the first time since their breakup in the 1990s. The talks were successful, with Final Fantasy Crystal Chronicles beginning development for the GameCube in late 2001. Square also began production on Final Fantasy X-2, the first direct sequel to a Final Fantasy game. Final Fantasy X-2 was Sakaguchi's last credited project at Square, and he left the company in 2003. Around this time, Square also began development on Kingdom Hearts (2002), with Nomura making his 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. Kingdom Hearts was Shimomura's last project as an in-house composer before going freelance in 2002. Also released in 2002 was the Japanese version of Final Fantasy XI, the company's first MMORPG. Conceived by Sakaguchi, it was developed by the Chrono team and led by Ishii. Final Fantasy XI and its first expansion was Kato's last work for Square before leaving in 2002 to go freelance. Following the commercial success of Final Fantasy X and Kingdom Hearts, Square and Enix resumed talks and agreed to merge their two companies. Wada described it as a merger of two companies "at their height". Despite this, the merger had its skeptics, particularly Miyamoto who did not want to see his controlling stake diluted in a merged company. Miyamoto's issue was resolved by altering the exchange ratio to one Square share for 0.81 Enix shares, and the merger was greenlit. Square Enix was formed on the 1st of April 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. Square's final release was the Japanese version of X-2.

The Exodus of Talent

Many Square employees went on to found notable development studios and other ventures. Nishi founded Love-de-Lic in 1995, producing three games including Moon: Remix RPG Adventure. Love-de-Lic staff went on to found other small studios including Skip Ltd. (Chibi-Robo!), and Punchline (Rule of Rose). Frustrated with Square's rigid hierarchy, Kikuta founded Sacnoth in 1997, which would become known for the Shadow Hearts series; he left Sacnoth in 1999 following the release of his project Koudelka and founded the music label Nostrilia. Several Xenogears developers, including Takahashi and Tanaka, founded Monolith Soft in 1999 in order to pursue projects outside the Final Fantasy series, developing more games using the Xeno prefix. Kameoka and other developers who worked on Legend of Mana (1999) founded Brownie Brown in 2000. Brownie Brown later worked with Square Enix on Sword of Mana (2003), a remake of Final Fantasy Adventure. Also in 2000, Mizuno founded AlphaDream, engaging Fujioka and going on to develop the Mario & Luigi series. Staff members from Square Pictures, including The Spirits Within co-director Motonori Sakakibara, established Sprite Animation Studios in 2002. After his resignation from Square, Takechi founded music label Dreamusic in 2001 with Kazunaga Nitta. Mitsuda founded the music studio Procyon in 2001 so he could work while maintaining his health. After stepping down as president in 2001, Sakaguchi experienced a period of low morale before returning to game development, founding Mistwalker in 2004. The studio became known for the Blue Dragon and Terra Wars series, as well as multiple stand-alone projects. Square also hired additional music staff. Kenji Ito contributed to both the SaGa and Mana series. Hiroki Kikuta worked on the Mana series and standalone projects. Yasunori Mitsuda started as a sound designer and was lauded for his work on the Chrono series. Yoko Shimomura, formerly a Capcom composer, did her first work on Live A Live (1994). In 1995, Square moved its headquarters to the Shimomeguro district in Meguro. Square also hired additional music staff. Kenji Ito contributed to both the SaGa and Mana series. Hiroki Kikuta worked on the Mana series and standalone projects. Yasunori Mitsuda started as a sound designer and was lauded for his work on the Chrono series. Yoko Shimomura, formerly a Capcom composer, did her first work on Live A Live (1994). In 1995, Square moved its headquarters to the Shimomeguro district in Meguro.