A Breakdown Of Square Enix’s Development Pipeline


If you’ve been following Square Enix’s evolution over the last decade or so, you’re likely aware that the company’s Japanese division has seen its fair share of troubles. Projects like Final Fantasy XIII, Final Fantasy XIV and Final Fantasy Versus XIII (which is now Final Fantasy XV) have gone well over their intended budgets and schedules, and the setbacks faced by these games have spilled over to other projects as well. In an effort to turn things around, Square Enix Japan has scaled back console development and instead, has been developing a steady stream of low-budget games for smartphones.


The plan has largely worked—a number of these games have gone on to do extremely well, to the point where social and smartphone games now make up a significant portion of Square Enix’s revenue. Meanwhile, the company’s Western and Japanese studios are both more selective about the kinds of games they choose to develop for consoles. Japan, especially, has chosen to focus almost exclusively on Final Fantasy and Dragon Quest, while the Western branch, too, largely focuses on popular brands such as Tomb Raider, Deus Ex and Hitman.


Overall, though, Square’s Western studios have been making more (and better) console games than their Japanese ones. This won’t be changing any time soon.


In an earnings report for the first half of their ongoing fiscal year, Square Enix used the slide you see above to illustrate how their development pipeline has changed. As you can see, the vast majority of “major titles” being developed with a budget of “several billion yen” will come from Square’s Western studios. In a separate report, Square pointed out that repeat sales of console games were actually higher than expected in their Western markets, so it makes sense that their Western studios are still focused on consoles. In addition to console games, the Western divisions will also dedicate a mid-sized budget to online-enabled games such as Triad Wars and Nosgoth.


Meanwhile, Japan will develop console games on a much smaller scale, and their mid-sized budgets instead will go toward smaller projects. Note the presence of “midsize titles” with an allocated budget of 1 billion yen. We assume this refers to games like Drakengard 3, Bravely Default, Bravely Second, Final Fantasy Explorers, and Square Enix’s portable Dragon Quest games. These titles are capable of providing near-console-quality experiences, but are developed using a far more efficient budget. They go a long way toward keeping the company’s more passionate fans happy while not breaking the bank, and make sense for the Japanese market, where portable game devices like the Nintendo 3DS are more popular than their console cousins.


Finally,  there’s the mention of “numerous small-size titles” developed using a budget of “several hundred million yen”. These likely refer to Square’s smartphone development pipeline, with games like Dragon Quest Monsters: Super Light, Final Fantasy: Record Keeper, the Million Arthur games and other projects for smart devices. A number of these games, Square said, are in the top-100 downloaded smartphone apps in Japan, and you can expect to see more “high-potential games” in this category in the future.

Ishaan Sahdev
Ishaan specializes in game design/sales analysis. He's the former managing editor of Siliconera and wrote the book "The Legend of Zelda - A Complete Development History". He also used to moonlight as a professional manga editor. These days, his day job has nothing to do with games, but the two inform each other nonetheless.