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Square Enix plans to oust outsourcers as it reviews the company's development process 'from scratch'

 Tifa stand behind the bar at 7th Heaven.
Tifa stand behind the bar at 7th Heaven.

Square Enix plans to overhaul its approach to making games, as it seeks to improve individual game quality and increase its overall profit margins.

As reported by Bloomberg Japan, the move was announced by Square Enix's president Takashi Kiryu, at a financial results briefing for analysts held yesterday.

Speaking at the conference call, Kiryu reportedly said "We are reviewing from scratch what the organisational structure is, and what the best way is to materialise the contents of the pipeline."

Details about this new system will apparently be revealed by "at least this spring", while analysts attending the conference said it will go into effect in April. But broadly, Kiryu wants Square Enix to double-down on developing games in-house and curb the amount of work on games that is outsourced to third-party companies. The analysts further stated that the new system will include a checking mechanism to judge the quality of games.

As a publisher, Square Enix has been growing more insular for a while. In 2022, the company sold off its Western arm to Embracer Group, which included developers like Crystal Dynamics and Eidos Montreal as it prioritised its Japanese studios and IPs. The decision regarding outsourcing, meanwhile, may well stem from Final Fantasy XVI's protracted development, which ended up six months behind schedule due to communication problems between Square Enix and outsourced developers, with Square Enix losing US$2bn in market value in the wake of the game's launch.

This isn't the only bold announcement Kiryu has made recently. In November last year, Square Enix's president said he was intent on "slimming down our lineup", focussing less on mid-budget titles and more on big hitters like Final Fantasy. In his New Year's letter to employees, meanwhile, Kiryu exhorted the benefits of generative AI, stating it "has the potential not only to reshape what we create, but also to fundamentally change the processes by which we create."

CEOs love to make big statements like this, of course. But as pointed out by Wes, Square Enix has taken some wild game development swings in recent years, and it's resulted in equally dramatic successes and failures. A little more focus, therefore, is probably sensible, although let's hope the publisher doesn't throw out its personality in the process.