Major Square Enix Investor Slams Current Performance, Urges Other Shareholders to Share 'Frank Views' As It Calls for a 'Fundamental Reassessment' of Its Business

A large capitalist successful Final Fantasy shaper Square Enix has published a 100-page papers criticizing the company's show and calling for a "fundamental reassessment" of its business, citing perceived "sluggish" gross and profits.

In a property statement, 3D Investment Partners — Square Enix's third-largest investor, holding astir a 14% involvement — claims determination has been a "significant deterioration successful earning power" contempt the institution owning immoderate of the world's biggest franchises and being a "preeminent Japanese crippled developer."

"What Square Enix erstwhile brought to beingness was a 'culture' that shaped an era, and an 'industry' that fascinated the world. Is Square Enix truly giving commencement to thing genuinely new, oregon has Square Enix turned distant from the challenges earlier it and fto its steps falter?" the papers asks, imploring that the steadfast "surprises us, moves us, and ignites that passionateness we erstwhile felt," arsenic "gamers crossed the globe person been waiting, endlessly, for that irreplaceable experience.

"However, nether the recently established absorption structure, the past 3 years person been marked by a pronounced stagnation successful some gross maturation and profitability, with a important deterioration successful earning power, arsenic evidenced by declines successful operating income, instrumentality connected equity, and different cardinal show metrics."

Calling this "the astir captious absorption challenge" presently faced by the Japanese company, 3D1P calls for the steadfast to "devise and rigorously instrumentality factual countermeasures addressing captious absorption issues," including the "excessive fragmentation of the improvement portfolio, merchandise design, and promotional strategies that person led to declining necktie ratios, and inflated expenditures specified arsenic improvement costs."

"We respectfully impulse a cardinal reassessment of the medium-term absorption plan, with the nonsubjective of afloat unlocking the imaginable of Square Enix's distinguished intelligence spot and thereby maximizing firm value."

After straight comparing Square Enix with Japanese competitors similar Capcom, Sega, Konami, Bandai Namco, and Nintendo — and cherry-picking "harsh" responses from Metacritic of some caller and established IP — the concern steadfast revealed that it had been "engaged successful ongoing dialogue" with Square Enix since past summer.

"Since July 2024, we person been engaged successful ongoing dialog with SQEX HD. In October 2025, we explained to President Kiryu and Outside Director Abdullah the absorption issues of SQEX HD arsenic seen from the market. We besides presented to President Kiryu our proposals.

"However, successful effect to this request, President Kiryu replied lone with a little email stating, without addressing immoderate of the circumstantial absorption issues oregon solutions we had raised, and without providing immoderate factual mentation of his reasoning."

3D Investment Partners is present sharing its views connected the perceived absorption issues "with each shareholders" to "collect [their] frank views, and, based connected the views we receive, prosecute successful constructive dialog with SQEX HD to heighten its firm worth again."

IGN has asked Square Enix for comment.

Former Square Enix exec and CEO of Genvid, Jacob Navok — the aforesaid exec that precocious claimed "Gen Z loves AI slop" — besides weighed in, saying that the presumption from 3DIP fundamentally has 2 themes: "sales are bad" and "dev costs are high."

"These are the aforesaid issues I addressed successful 2024 erstwhile discussing the problems with Square Enix's income for FF16 expectations for income were acceptable correctly," helium added. "They were not met due to the fact that Square Enix income were poor, and the crippled outgo excessively overmuch to make."

The precise nationalist ailment comes conscionable weeks aft Square Enix announced wide layoffs, impacting implicit 100 individuals, alongside a broader effort to consolidate its publishing enactment and absorption its improvement enactment successful Japan. It had besides already sold Crystal Dynamics, Eidos-Montreal, Square Enix Montreal, and a fig of associated IPs to Embracer Group, and laid disconnected workers crossed its occidental operations successful 2024.

Square Enix besides expects 70% of its QA enactment to beryllium handled by generative AI by the extremity of 2027. The institution has stated successful the past that it intends to beryllium "aggressive successful applying AI" crossed some improvement and publishing.

Vikki Blake is simply a newsman for IGN, arsenic good arsenic a critic, columnist, and advisor with 15+ years acquisition moving with immoderate of the world's biggest gaming sites and publications. She's besides a Guardian, Spartan, Silent Hillian, Legend, and perpetually High Chaos. Find her astatine BlueSky.