Square Enix, the well-known Japanese gaming company, has recently announced considerable downsizing operations on both its North American and European branches. This decision, which is speculated to impact hundreds of employees, is a part of broad restructuring goals that aim to bolster profitability by redirecting resources to live service and mobile game development. Their CEO, Yosuke Matsuda, expressed his sadness over the difficult decisions but stressed the criticality of this move in ensuring the company’s survival in the rapidly evolving gaming industry.
A major brunt of this restructuring will fall on Square Enix’s Western development studios, notably Crystal Dynamics, Eidos-Montréal, and IO Interactive. In addition, the European publishing operations will face significant cutbacks, including the absolute closure of its London mobile game studio. This large-scale restructuring was hinted at with the departure of Ian Livingstone, Square Enix Europe’s Life President, last year.
Square Enix’s decision to drastically reduce its workforce is a consequence of a strategic shift away from traditional console and PC game development, leaning towards revenue models like mobile games, live services, and blockchain initiatives. Despite the commercial underperformance of recent releases such as Tomb Raider and Hitman, the company remains hopeful that these measures will foster a leaner, more adaptive organization that can exploit emerging opportunities in the gaming industry. The recent wave of mass layoffs in major gaming companies like Microsoft, Amazon, Meta, Twitter, and others reflects intensifying economic challenges.
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