Square Enix Shakes Up Strategy After Disappointing Year: Layoffs and Rebooted Business Model Confirmed

Square Enix is undergoing a major internal transformation following a disappointing fiscal year and underwhelming performance of several high-profile titles. The publisher behind best-selling franchises like Final Fantasy and Dragon Quest confirmed today that it will lay off staff and adopt a new business strategy focusing on select, high-quality game titles moving forward.

The sweeping changes come as part of the company’s mid-term strategy overhaul titled “Reboot and Awaken,” revealed during its most recent earnings briefing. The plan includes reallocating development resources and restructuring internal studios, with Square Enix aiming to reverse the stagnation that plagued its last few quarters. The company cited poor returns on recent releases such as Forspoken and underperforming live service titles as catalysts for the change.

The layoffs will reportedly affect staff in both Japan and Western studios. While no specific numbers were disclosed, Square Enix said the job cuts are intended to “optimize development efforts” and “recalibrate the company’s creative and operational focus.” Insiders suggest the move aligns closely with the company’s decision to scale back on risky, large-budget experiments and double down on tried-and-true franchises with proven track records.

Square Enix President Takashi Kiryu emphasized the need to “move away from a volume-driven approach” and concentrate on fewer, more polished experiences that deliver consistent value to consumers and shareholders. “We will not pursue quantity at the expense of quality,” Kiryu said, noting that the company aims to sharpen its storytelling, gameplay mechanics, and long-term support for major titles.

The strategy mirrors similar moves by other publishers in the wake of a turbulent year for the gaming industry, where bloated development costs and shifting consumer expectations have pressured studios to rethink outdated models. Square Enix now joins the ranks of companies like Ubisoft and Embracer Group in making difficult cutbacks while banking on long-term stability through tighter portfolios.

What remains to be seen is how this strategic reset will impact anticipated titles like Final Fantasy VII Rebirth and Kingdom Hearts IV. Square Enix insists that its core franchises remain central to future growth—but with leaner teams and a more cautious approach, the road ahead may look very different for one of gaming’s most iconic publishers.