Square Enix is right to cut back on how many games it makes - but going too hard would be a huge mistake

Square Enix’s new CEO is in an unenviable position. Taking the reins of any large company is a challenge, but Square Enix is arguably in a vital period of its history - and it’s the job of Takashi Kiryu to guide the company through to emerge stronger than before.

Kiryu is no newcomer to Square Enix, having been with the company since 2000 and held significant and senior positions on or reporting to the board since 2021. But Kiryu is keen to make changes from the regimes he worked under previously - and one such change has caused ripples in the Square Enix fan community. Kiryu wants Square Enix to make fewer games.

“We want to concentrate our development resources on carefully selected new titles that we will develop to a high level of quality,” Kiryu explains to shareholders in a recently released Q&A. Part of that, he admits, will involve “slimming down” Square Enix’s line-up.

The logic is strong - and that is that if Square Enix makes less games overall, it can spend more time and resources getting each individual game right. And that does make sense on paper. 

Square Enix releases a lot of games for a publisher of its size. 2022 is a perfect year to demonstrate this - it saw the publisher put out a huge number of mid-tier games with significantly overlapping audiences practically all at once. Various Daylife, a Voice of Cards title, DioField Chronicle, and Valkyrie Elysium all saw their first worldwide releases in September alone. While these games were staggered as late as November in some territories - they ultimately all landed close together. 

In the final calendar quarter of 2022, the company dropped Star Ocean The Divine Force, Harvestella, Tactics Ogre: Reborn, Romancing SaGa, Dragon Quest Treasures, and Crisis Core Reunion - plus some late ports to new platforms for games like Nier Automata and Triangle Strategy. Some of these games failed to perform - and one could easily argue that this was at least in part because the publishing arm of the company struggled to market all of them at once. Some of them also weren't as good as they could or should have been - and again, one could easily pin this on the crowded environment at the parent company behind them.

Having so much development going on that all these games tumbled out of the publisher into the world all at once naturally led to some of them struggling - especially as most appeal to a similar crowd of gamers - people who make up a huge chunk of this website's audience. Clearly, that situation is untenable. And sometimes, less is indeed more.

“As our customers’ needs and the types of devices available have diversified, we have tried to produce hits by developing a wide variety of titles rather than by focusing only on certain ones,” Kiryu notes in the same investor Q&A. “I believe that this has resulted in the splintering of our resource pool.

“The market is increasingly polarized between blockbuster and indie titles, but I feel that we have developed many titles that fall somewhere in the middle. I want to make clearer distinctions going forward.”

The writing is on the wall, then: going forward, Square Enix will produce less games. People and other resources that might’ve been spread before more games will be consolidated into the remaining titles. Taking in Kiryu’s comments in full, he specifically singles out the ‘middle ground’ - highlighting the success of indie-level games and of big blockbusters. It makes sense that those are the ones that’ll likely disappear.

The question for us is what games qualify as ‘mid tier’, then. In a year like 2022, I feel it’s probably fair to say that under this new regime, titles like Star Ocean: The Divine Force, Valkyrie Elysium, or The Diofield Chronicle wouldn’t exist. Quite possibly also Harvestella. Truly small-budget stuff like Voice of Cards, and ports of older games like Tactics Ogre, would likely survive. But where does this leave us?

Kiryu’s new strategy is correct in that he has absolutely identified one of Square Enix’s biggest problems. September 2022 is a banner carrier for this entire problem - and the banner is a flag of the richest crimson. But the problem itself has a problem, which is this: much of Square Enix’s best output has slotted into this ‘middle bracket’.

The 2D-HD art style, for instance, was not cheap to create. Would we have gotten Octopath Traveler, which kicked off a whole new art style Square Enix is now leveraging to great success, in this setup? To my mind, Nier Automata is the very definition of a ‘mid-tier’ title - clearly not indie, but also nowhere near the budget of a Final Fantasy or Kingdom Hearts. That became a break-out hit and Square Enix’s best-selling title from a series that isn’t one of their big names, establishing Nier as a new addition to that big-boy list. Nier is now likely to form a vital part of Square Enix going forwards - but would it have gotten that shot at break-out success in this sort of regime?

Obviously, the answer is - we don’t know which titles from the past would’ve been likely to survive this “slimming down” - but it’s easy to see how some hits and classics might not have made the cut. 

That worries us on this website, obviously - but we are the same website that this year named Octopath Traveler 2 one of our top five RPGs of 2023, and back in 2019 we awarded our Game of the Year to the undoubtedly smaller-tier SaGa Scarlet Grace, picking it over the likes of Fire Emblem Three Houses and Disco Elysium - proof that these dice rolls can work, at least in terms of artistry. 

But further, I wonder how this decision-making process will mesh with some of Kiryu’s other stated objectives. In a previous investor Q&A, Kiryu noted that he wanted to “identify existing IPs with the potential to be upgraded to AAA status” as a way of growing the company’s portfolio and value. But mid-tier games are often key to such moments - which brings us back to the break-out success of Nier Automata.

Square Enix’s bloated 2022 is proof positive that the company had too many plates spinning - the axe does indeed need to be wielded. But doing so without undercutting or damaging some of the areas where Square Enix has delivered its most magical experiences in recent years is going to be difficult. Here’s hoping the company’s leadership can thread the needle.