Square | Code Like It's 198x

Square gambled on a single game more than once. The first time, in 1987, its designer Hironobu Sakaguchi treated a role-playing game called Final Fantasy as his last try at a hit, and it made the company. The second time, Square took the series away from Nintendo to Sony’s new PlayStation, and Final Fantasy VII (1997) carried the Japanese role-playing game round the world. By then Edge reckoned Square was spending around $80,000 on computers and software for each of its programmers and up to $230,000 for each artist. The third gamble, a computer-animated Hollywood film, came close to sinking it. Two years later Square merged with Enix, the publisher of its great rival Dragon Quest, and the company it became, Square Enix, still makes Final Fantasy.

Fast facts

Founded: September 1986, as Square Co., Ltd., in Tokyo. It had started in 1983 as the software division of another company, Den-Yu-Sha.
Breakthrough: Final Fantasy (Famicom, December 1987).
Other series: SaGa (sold in the West as The Final Fantasy Legend), Mana, Chrono Trigger, Final Fantasy Tactics, Kingdom Hearts.
Key people: Hironobu Sakaguchi (designer, director and producer), Nobuo Uematsu (composer), Yoshitaka Amano and Tetsuya Nomura (character designers), Yoichi Wada (president at the merger).
Ended: merged with Enix on 1 April 2003 to form Square Enix.

From Den-Yu-Sha to Final Fantasy

Square began inside a company that had nothing to do with games. Den-Yu-Sha was an electric power company run by Kuniichi Miyamoto. His son Masafumi Miyamoto led its computer game division, set up in 1983, and in September 1986 it became an independent company, Square. Its first finished game was a text adventure, The Death Trap (1984), for NEC’s PC-8801 computer. Sakaguchi, whom Edge later called “a founder member of Square”, had made games for it that struggled to sell.

Final Fantasy was meant to change that or end his career. “Everyone’s heard the story,” Retro Gamer wrote in 2012: the game was Sakaguchi’s “then-final attempt to produce a hit game”, and if it failed “he’d quit the games industry and try something else”. It borrowed its turn-based battles from Enix’s Dragon Quest, which had come out the year before, and added a large open world map, a choice of character classes, and vehicles, ending with an airship that could fly anywhere. It came out in Japan on 18 December 1987 and became, in Retro Gamer’s words, “an instant hit, mainly in Japan”, and the start of “Square’s resuscitation as a company”. (The popular story that Square was on the edge of bankruptcy goes further than these sources do.)

Square kept changing the formula. Each game had a new world and new characters. Final Fantasy II (1988) gave its heroes names and personalities and introduced the Chocobo, a big yellow bird, and a recurring character called Cid. Final Fantasy III (1990) let characters switch jobs during play. For the Game Boy, Square made the SaGa role-playing games, which it renamed The Final Fantasy Legend in the West to catch attention there, and Final Fantasy Adventure (1991), the first game of what became the Mana series. In March 1989 it set up an American subsidiary, Square Soft.

The Super Famicom years

On the Super Famicom, Square made the series the reference point for Japanese role-playing games. Final Fantasy IV (1991) brought in the Active Time Battle system, in which each character’s turn comes round in real time and the enemy does not wait for the player to choose. It was sold in America as Final Fantasy II, because it was only the second of the series to be released there. Final Fantasy V (1992) made the job system far more flexible; it was the last game in the series Sakaguchi directed before he moved up to producer. Final Fantasy VI (1994) had 14 playable characters, two of them secret, each with a back story, and reached America as Final Fantasy III. Final Fantasy: Mystic Quest (1993), a lighter game with more action and no numbered hit-point meter, was the first Final Fantasy released in Britain, although there the Final Fantasy name was dropped and it was sold as Mystic Quest Legend.

The Mana series moved to the Super Famicom too. Secret of Mana, reviewed on import by Super Play in January 1994, could be played by up to three people at the same time. In 1995 Square’s team worked with Dragon Quest’s designer Yuji Horii and artist Akira Toriyama on Chrono Trigger; the JRPG entry tells that story.

How Square stood against Enix depends on when you ask. In 1996 Edge wrote that Square had “wrested the domination of the console RPG market from long-term rival Enix”. Looking back in 2010, the same magazine judged that Enix had been “easily winning — on home turf, at least” until the two merged.

Leaving Nintendo

By 1996 Square had committed Final Fantasy VII to Sony’s PlayStation instead of Nintendo’s new console. Sakaguchi explained it to Edge as a matter of space: “We need about 1,500Mb for FFVII, and we’re already squeezing it into two disks, maybe even three,” far more than the Nintendo 64’s cartridges or its planned disk drive could hold. Retro Gamer later pointed out the irony: Nintendo had itself backed out of a joint CD-ROM project for the Super Famicom with Sony earlier in the decade.

Edge’s visit that year shows how much money Square now had. It was developing ten PlayStation games at once. It had hired former Namco and Sega staff to make its first fighting game, Tobal No.1, and packed a playable demo of Final Fantasy VII in with it, so that, Edge suggested, some Japanese players bought the fighting game just for the demo. More than 100 designers at its office in Meguro, Tokyo, were working on Final Fantasy VII alone, and Square told Edge it was probably number one in Japan for money spent on Silicon Graphics workstations. The magazine also passed on a claim “widely reported” at the time, that Square counted any game selling under a million copies in Japan as a flop.

Final Fantasy VII changed the look of the series. Its characters were 3D models walking over pre-rendered backgrounds, and it was the first game in which Tetsuya Nomura designed all the characters, replacing Yoshitaka Amano, who had drawn the characters for the earlier games; Amano still drew its logo. Nobuo Uematsu wrote the music. By late 2002 the game had sold 9.2 million copies, more than half of them outside Japan. In 1998 Square set up a joint venture with Electronic Arts, Square Electronic Arts, which published its PlayStation games in North America, among them Final Fantasy Tactics (1997) and Xenogears.

The film

The third gamble was a film. Square opened a studio in Hawaii, and Henk Rogers, who had a house in Hawaii, helped set it up as what Edge called a “Hawaiian honeypot, designed to lure SGI artists from colder climes”. There Square Pictures made Final Fantasy: The Spirits Within, a fully computer-animated science fiction film directed by Sakaguchi and released by Columbia Pictures in July 2001. Its animators modelled 60,000 individual hairs on the head of its heroine, Aki Ross. The cost was rumoured at $100 million.

The film did badly in American cinemas, and the company’s finances were already under strain. Three of Square’s top executives had stepped down in February 2001 ahead of its first reported financial loss. Nintendo’s president Hiroshi Yamauchi would not let Square develop for the Game Boy Advance, and Square, Enix and Namco had each taken five per cent holdings in the others. Later in 2001 Sony bought an 18.6 per cent stake in Square. Edge later summed it up: Final Fantasy had made Square a powerhouse, and the “catastrophic failure” of The Spirits Within “nearly crushed it again”.

The games still sold. Final Fantasy X (2001), the first on the PlayStation 2, had sold 5.4 million copies by the end of 2002, and in 2002 Square released Final Fantasy XI, an online role-playing game, in Japan. Kingdom Hearts (2002), which mixed Final Fantasy characters with Disney’s, began, according to Retro Gamer, with a conversation in a lift between Disney and Square executives, whose Japanese offices were in the same building.

The merger with Enix

On 26 November 2002 Square and Enix announced that they would merge. The new company, Square Enix, started on 1 April 2003. Legally, Square’s assets and liabilities were absorbed by Enix, but the new company was headed by Yoichi Wada, Square’s president. The two companies presented the deal as a fit between Square’s success in America and Europe and Enix’s in Japan, and backed it with a table of their best sellers, headed by Final Fantasy VII with 9.2 million copies.

Square Enix

Some of the people who had made Square left. Uematsu left Square Enix in 2004 to start his own studio. Sakaguchi set up his own company, Mistwalker, which by 2006 was making the role-playing games Blue Dragon and Lost Odyssey for Microsoft’s Xbox 360, with Uematsu among its freelance collaborators.

Square Enix grew by buying other companies. It took control of Taito, the maker of Space Invaders, in September 2005 and owned all of it by March 2006. In October 2008 it became a holding company, Square Enix Holdings. In April 2009 it bought the British publisher Eidos, gaining Tomb Raider, Hitman and Eidos’s studios. It also returned to Nintendo’s machines: Final Fantasy: Crystal Chronicles (2003) was a GameCube game.

The series itself had one of its worst moments online. Final Fantasy XIV launched in 2010 to what Edge called “a critical drubbing”; Square Enix shut it down, gave it a new director, Naoki Yoshida, and relaunched it in 2013 as A Realm Reborn. In 2022 Square Enix sold Crystal Dynamics, Eidos-Montréal and other Western studios to Embracer Group for $300 million, saying that the sale would let it invest in fields “including blockchain, AI, and the cloud”. Final Fantasy, Dragon Quest and Kingdom Hearts stayed with Square Enix, which is still based in Tokyo.

Sources

Retro Gamer issue 108, November 2012, pp. 56–62, Samuel Roberts, “Final Fantasy: the complete history”: Sakaguchi’s “then-final attempt” and the promise to quit; the first game’s world map, classes and airship, “an instant hit, mainly in Japan”, and “Square’s resuscitation”; Final Fantasy II’s named characters, Chocobos and Cid; SaGa renamed The Final Fantasy Legend; Final Fantasy Adventure as the start of the Mana series; Active Time Battle in Final Fantasy IV and its US title; the job system in Final Fantasy V and Sakaguchi’s move to producer; Mystic Quest and Mystic Quest Legend; Final Fantasy XI (2002, Japan); Kingdom Hearts and the lift; Crystal Chronicles on GameCube.
Edge issue 37, October 1996, “Square route” (Square Soft feature): spending per programmer and artist; Sakaguchi as “a founder member of Square”; ten PlayStation titles; former Namco and Sega staff and Tobal No.1 with the Final Fantasy VII demo; the million-copy “flop” claim; SGI spending; the Meguro office and more than 100 designers; Sakaguchi’s 1,500Mb quote; Amano’s earlier character art; polygon characters over pre-rendered backgrounds in Final Fantasy VII; Final Fantasy VI’s 14 characters; Final Fantasy V’s shelved translation and Final Fantasy VI sold in the US as Final Fantasy III; Square having “wrested the domination of the console RPG market” from Enix.
Edge issue 217, August 2010, pp. 62–67, “The story of Dragon Quest”: Enix “easily winning — on home turf, at least” until the 2003 merger.
Retro Gamer Collection vol. 7 (2013), pp. 94–97, “The making of Final Fantasy VII”: the move to the PlayStation for CD-ROM storage; Nintendo’s abandoned CD project with Sony; Nomura as sole character designer, replacing Amano, who still drew the logo.
Edge issue 67, January 1999, p. 93: Xenogears review, published by Square Electronic Arts, developed by SquareSoft. Official U.S. PlayStation Magazine vol. 2 no. 9, June 1999, p. 57: Square game advertisement, “Published by Square Electronic Arts”.
GamePro issue 104, May 1997, p. 35: Final Fantasy VII’s “stirring soundtrack by composer Nobuo Uematsu”.
Super Play issue 15, January 1994, p. 45: Secret of Mana import review (Squaresoft, one to three players).
Edge issue 74, August 1999, p. 58, Henk Rogers interview: Rogers helped Square set up its Hawaiian “honeypot”.
Edge issue 98, June 2001, p. 9, “Square shows its Spirit”: Columbia Pictures and Square Pictures; the 60,000 hairs; the rumoured $100 million cost; three executives stepping down in February ahead of the first reported loss; Yamauchi and the Game Boy Advance; the cross-holdings with Enix and Namco.
Edge issue 101, September 2001, p. 13: the film’s “underwhelming” US box office.
Computer Gaming World issue 200, March 2001, p. 36: The Spirits Within “directed by Hironobu Sakaguchi”. IGN Unplugged issue 3, June 2001, p. 64: release date 13 July 2001.
Play issue 83, October 2001, p. 7, “Square deal”: Sony’s 18.6 per cent stake in Square Co Ltd.
Edge issue 160, March 2006, pp. 48–49: The Spirits Within “nearly crushed” Square; Mistwalker, Blue Dragon and Lost Odyssey; Uematsu as a freelance collaborator.
Edge issue 119, January 2003, p. 13, “Square and Enix join forces”: the terms of the merger; Yoichi Wada; the sales table (Final Fantasy VII 9.2 million, Final Fantasy X 5.4 million).
Edge issue 120, February 2003, p. 25, Tokyo Game Life column: the announcement on 26 November 2002 and the start date of 1 April 2003.
Electronic Gaming Monthly issue 187, January 2005, p. 46: Uematsu “has recently left Square Enix to start his own studio”.
Edge issue 257, September 2013, p. 54, Final Fantasy XIV: A Realm Reborn: the 2010 launch, the shutdown and Naoki Yoshida. Edge issue 257, p. 136: Square Enix acquired IO Interactive when Eidos “was merged with the Japanese publisher in 2009”.
Wireframe issue 63, May 2022, p. 20: the sale of Crystal Dynamics, Eidos-Montréal and others to Embracer Group for $300 million, and Square Enix’s statement.
Square Enix Holdings, corporate history (web): Square Co., Ltd. founded September 1986; Square Soft established March 1989; the merger in April 2003; Taito in September 2005 and March 2006; the holding company in October 2008; Eidos in April 2009. https://www.hd.square-enix.com/eng/company/history.html
Wikipedia, “Square (video game company)” (accessed September 2026) (web, secondary): Den-Yu-Sha, Kuniichi and Masafumi Miyamoto; The Death Trap on the PC-8801; the Square Electronic Arts joint venture of May 1998.
Wikipedia, “Square Enix” (accessed September 2026) (web, secondary): the Eidos takeover in April 2009, with Tomb Raider and Hitman. https://en.wikipedia.org/wiki/Square_Enix https://en.wikipedia.org/wiki/Square_(video_game_company)