Chapter II: A Dualistic History. Square Enix’s Corporate Philosophy.

Harmony

“…As a corporate organization, we shall work diligently to maintain an optimal balance culminating in the ultimate satisfaction of all our stakeholders, including customers, shareholders, counterparties, and employees…As a business entity, we shall contemplate what functions we are to perform within the realm of industry, while acting in a manner that ensures the mutual harmony and benefit of all parties within it…”

“Square Enix’s laborious online role-playing game is a step back for the genre” – Gamespot’s Kevin VanOrd

There seems no more of a fitting time than now to continue with part two of where things went wrong. While reviews of Square Enix’s latest MMORG, Final Fantasy XIV, pour in with less than favorable views, let’s delve back into time.

Square

For in 1983 Square was far from what it is today. Far from an independent developer of video games at least, it was orginally a division of Japanese power-line construction company, Den-Yu-Sha. It was hardly predominant.  Though 1983 would be the earliest point in the company’s history; a defining year for this software division. Its the year that Masafumi Miyatamoto became head of Square and came up with a revolutionary idea. It may seem trivial today but for an industry in its infancy, the idea of having the positions of graphic designers and professional story writers work on a common project was ingenious to say the least. The idea was soon to prove to be an success. The release of their first video game, The Death Trap, sold an impressive half a million copies. While nothing of a hit like Mario Brothers, which was selling 1.5 million copies at the time, it was enough to see Square establish itself as a company. A run of unsuccessful games followed, but after an expansion of the company staff and a relocation, it was in 1987 that Final Fantasy came about.

Innovative Party Mechanics

Even as far back as Final Fantasy, the series set about a high standard. Refined the gaming mechanics of RPGs Final Fantasy would be considered to be the grand father of modern JRPGs. Introducing a side view to RPG gaming, where previously only first person was used and a new mechanic of a party versus multi monsters compared to the then usual one versus one battle system. Though as new and edgy Final Fantasy was, it was no way a new idea. It in fact was riding a popularity wave from Enix’s flagship series Dragon Quest, made in 1986. In a funny twist of fate, Square and Enix would find themselves competing as much as the same style as Mario versus Sonic.

Enix

While founded in 1975, Enix did not make it’s entrance into the video game industry until 1982. Its new venture was an interesting one to say the least. Beginning with a competition; a game programming  face-off if you will. Its victors Yuji Horii and Koichi Nakamura both saw their games published with fair success, but its true that the truth is sometimes stranger than the fiction, as it after this Enix never developed any games. It instead opted  for outsourcing the production of its games and instead acted as publisher. Strangely, it would be these two victors  who would go on to create Enix’s famous series, Dragon Quest, but under Nakamura’s own company, Chunsoft. Though Enix’s success would be owed to this business strategy. Dragon Quest sold 1.5 million copies in 1986, out selling Final Fantasy’s 0.4 million in 1987 and it would be owed to this  success that over the next decade Enix would change from a small publishing company into a Japanese conglomerate. By 1991 Enix’s business strategy as a published allowed it into the manga industry publishing the still popular Shonen Gangen.

The 90′s for both Enix and Square was a resounding success for two very different reasons. Time would show that Final Fantasy would eventually out sell Dragon Quest. With massive successes from the Final Fantasy series such as Final Fantasy VII in 1997, selling nearly 10 million copies, Square, or then more commonly know as Squaresoft, was making its name as being top in its industry for caliber. While Enix would become the more profitable gaming company with its publishing ventures and sales from various develops such as Dragon Quest. But like all things, everything comes to an end. If any lesson must be learnt it must be that a business cannot purely survive on one product. In the end it would be the over zealous efforts of both companies to cash in more profits that would inevitably lead to financial trouble.

There Maybe Trouble Ahead

Amongst the various factors there were two main aspects that led Square and Enix to troubled waters. For Squaresoft, the failure of the Final Fantasy movie Final Fantasy: The Spirits Within would hurt Squresoft severely in 2001. Despite the impressive CGI that were becoming a standard for Squaresoft, the film lack something to entice audiences, resulting in a net loss of $52 million.  While it’s losses would seem to be short lived with a  resounding success of Final Fantasy X  in 2002, the failure of the film  showed that Squaresoft by itself could be nothing more than a successful gaming company. While Enix would held various ventures and prove to be more than a gaming publisher, an example being its fingerprint identification venture in 2000,  it would be it’s own strategy that would lead to delays in publication of Dragon Quest VII. While the game made a resounding success in 2000, the delay could not have been worse. The push from 1999 to 2000 saw Enix’s stocks drop in value by 40%  in early 2000. The followed delay of Dragon Quest Monsters 2 in 2000, would finally drop Enix’s profits down to nearly 90% of original predictions.

If anything the resulting merger that was to come would be causality of these mistakes. The dependence on the success of one series would be a lesson forgotten, swept under a carpet of reformations and ratifications of a merger. Theres no denying that this was the best thing that would happened to both companies; both companies would get the strengths of the other: Enix gained a profitable series and some of the best video game artists in Japan, while Square gained the ability to venture out of being just a video gaming company. Gaming wise the merger ensured that two series would continue, massive projects such as those for Final Fantasy VII and XIII could and would be realized. But amidst all of this, I believe that the values that probably still exist amongst the many gaming talent today, was lost by those higher up. Profit and stocks would take the forefront with rehashes of a sole series and old business strategy that led to dangerous time would for some reasons still remain. Its seems that indeed you can’t teach old dog new tricks. In the end it would seem that if anything Square Enix is in part at fault for not changing rather than changing.

In next part: We take a closer look at the merger and the subsequent years that led to Square Enix’s position today.