Origins Square was initially established in September 1983 as a software subsidiary of Den-Yu-Sha, an
electric power conglomerate led by Kuniichi Miyamoto. His son
Masafumi Miyamoto, then a part-time employee of the Science and Technology Department at
Keio University, had little interest in following his father into the electricity business. Miyamoto instead became a software developer at the
Yokohama branch of Den-Yu-Sha in
Hiyoshi, with a focus on the emerging video game market. Their original offices were based in a former hairdresser's salon. The company's name referred to a golfing term, and represented its aim to face challenges head-on. It also referenced a
town square, emphasizing a production environment based on cooperation. At the time, video games in Japan were usually created by a single programmer. Miyamoto, on the other hand, believed that graphic designers, programmers, and professional story writers would be needed to keep up with advances in computing and video game development. During these early years, the group was compared to a
family business; one of the early hires, Shinichiro Kajitani, joined because he was a friend of Miyamoto, and later compared the company at that time to a "college club". To recruit for this new organizational structure, Miyamoto organized a
salon in Yokohama and offered jobs to those who demonstrated exceptional programming skills. This led to the part-time hiring of university students
Hironobu Sakaguchi and
Hiromichi Tanaka, as well as Hisashi Suzuki, who would go on to become Square's CEO. Miyamoto's initial plan was to recruit from Keio University, but this never materialized.
1985–1987: First games, Final Fantasy '' franchise. Square's first attempt at a game was an adaptation of the television game show
Torin-ingen. As Miyamoto had not secured the license to adapt it, the show's producers forced Square to cancel the game, prompting its team to be reshuffled. Square's first completed game was
The Death Trap (1984) for
NEC PC-8801, a
text adventure set in a war-torn African nation.
The Death Trap was the first game published under the Square brand. Its sequel,
Will: The Death Trap II, was released the following year to commercial success. Many of Square's early titles were produced for PC devices, and focused on the
action genre. In 1985, the company negotiated a licensing agreement with
Nintendo to develop titles for the
Family Computer. The company shifted to developing for the Famicom to benefit from its stable hardware, compared to the constantly changing components of PCs. Square's first Famicom release was a port of the
run and gun game
Thexder (1985), and its first original game was the
scrolling shooter ''
King's Knight'' (1986). During this period, the team also hired new developers
Akitoshi Kawazu and
Koichi Ishii, artist
Kazuko Shibuya, Iranian-American programmer
Nasir Gebelli, and composer
Nobuo Uematsu. Yusuke Hirata joined that year as sales manager, and later became the company's publicity manager. In April 1986, Square moved into new offices based in
Ginza, noted as one of the most expensive areas for companies to operate; Sakaguchi later speculated Miyamoto was hoping to attract business by appearing affluent. Square was re-established as an independent developer in September of that year with capital of
¥10 million, buying the original Square gaming division from Den-Yu-Sha in December. Sakaguchi was appointed as a Director of Planning and Development, and Hisashi Suzuki became one of the company's directors. Due to the high cost of Ginza rents, the company was forced to move into smaller offices in Okachimachi,
Taitō. Square began struggling financially following multiple commercial failures for Nintendo's
Famicom Disk System peripheral. Miyamoto asked the company's four directors for game proposals, with plans to have their staff vote on the best idea. Sakaguchi proposed making a
role-playing video game (RPG), believing it to be a viable project after the success of
Enix's
Dragon Quest (1986). While skeptical, Miyamoto allowed production of the RPG on the condition it only had a five-person team. Sakaguchi led development, bringing in Gebelli, Kawazu, Ishii, and Uematsu. Production of the game, eventually called
Final Fantasy, proceeded in "fits and starts". Sakaguchi eventually received help from the other team at Square led by Tanaka, which included Shibuya and newcomer debugger
Hiroyuki Ito. Production on the game lasted roughly ten months. While shipments of 200,000 units were planned, Sakaguchi persuaded Square to double that number.
Final Fantasy was released in 1987 to commercial success, selling over 400,000 copies in Japan. It saw greater sales success in North American when it was released in 1989, selling 700,000 copies. Two other Japanese successes from 1987 were
Rad Racer and
The 3-D Battles of WorldRunner.
1987–1995: Expansion and notable staff The success of
Final Fantasy prompted development of
Final Fantasy II (1988), which established many of the series
recurring elements. This and four more
Final Fantasy titles would appear on the Famicom and
Super Nintendo Entertainment System (Super Famicom), culminating in
Final Fantasy VI (1994). These were among a string of projects that Square produced exclusively for Nintendo consoles, including the portable
Game Boy. In 1990, Square moved its offices to the
Akasaka district, and then to
Ebisu, Shibuya in 1992. In April 1991, Square merged with an identically named dormant company in order to change its share prices. As a result of the merger, Square's foundation was backdated to the other company's July 1966 founding date. At that time, Square drew some of its development funding from loans from Shikoku Bank. Due to increasing development costs, the bank sent Tomoyuki Takechi on
secondment to be their office manager in 1990. Takechi's secondment lasted until 1994, by which time Square had annual sales worth ¥16 million per year. In August of that year, Square registered with the Japan Securities Dealers Association to offer shares for public purchase. Sakaguchi was by now a prominent figure within the company, and was promoted to Executive President in 1991. His increasing corporate involvement lessened his creative input, prompting him to give greater influence to other staff. Gebelli left Square in 1993, retiring on royalties from the
Final Fantasy series. Miyamoto stepped down as Square's President in 1991 while remaining a major shareholder, and was replaced by Tetsuo Mizuno. In 1991, Suzuki became Vice President. As
Final Fantasy became a featured property for the company, Square produced additional projects that became successful series of their own. The Japan-exclusive
real-time strategy series
Hanjuku Hero, which began in 1988, parodied conventions of the RPG genre. Kawazu helmed an RPG project for the Game Boy. Released in 1989,
Makai Toushi SaGa (
The Final Fantasy Legend) spawned the
SaGa series, which Kawazu would continue to be involved over the years. After the release of
Final Fantasy III (1990), Ishii was offered the chance to create his own game, leading to the production of
Seiken Densetsu: Final Fantasy Gaiden (
Final Fantasy Adventure) for the Game Boy in 1991. Ishii went on to develop additional
Seiken Densetsu titles, released outside of Japan as the
Mana series. A famous game from the period was
Chrono Trigger, born from a collaboration between Sakaguchi,
Dragon Quest creator
Yuji Horii, and
Dragon Ball artist
Akira Toriyama. Among other standalone titles were the Western-exclusive
Secret of Evermore, and the
Mario-themed
Super Mario RPG co-produced with Nintendo. Reflecting on this period, Sakaguchi noted that
Final Fantasy was the company's most recognized property, while celebrating the fact that the company would still be profitable on the merits of their other successful game series. Additional staff joined Square by the early 1990s, inspired by the successful
Final Fantasy series, with several first working on
Final Fantasy IV (1991),
Yoshinori Kitase acted as a writer and later director, artist
Tetsuya Nomura began as a graphic designer, and
Tetsuya Takahashi and
Kaori Tanaka were both artists and writers.
Takashi Tokita became a full-time employee at the company, and Hiroyuki Ito began his work as a game designer.
Chihiro Fujioka worked on several projects including co-directing
Super Mario RPG.
Kenichi Nishi worked in minor roles on
Chrono Trigger and
Super Mario RPG.
Masato Kato, who joined in 1993, became scenario writer for
Chrono Trigger. Artist
Yusuke Naora first worked on
Final Fantasy VI.
Kazushige Nojima, known for his work on the
Glory of Heracles series, joined as a scenario writer. Future director
Motomu Toriyama, who had no experience with game development, began as a scenario writer. Square also hired additional music staff.
Kenji Ito contributed to both the
SaGa and
Mana series.
Hiroki Kikuta worked on the
Mana series and standalone projects.
Yasunori Mitsuda started as a sound designer and was lauded for his work on the
Chrono series.
Yoko Shimomura, formerly a
Capcom composer, did her first work on
Live A Live (1994). In 1995, Square moved its headquarters to the
Shimomeguro district in
Meguro.
1995–1999: Move to PlayStation 's continued use of cartridges with the
Nintendo 64, Square moved game production over to the PlayStation which used CD-ROMs.|alt=The Sony PlayStation Following the release of
Final Fantasy VI and
Chrono Trigger, Square staff began planning the next entry in the
Final Fantasy series, and entered the emerging
3D gaming market. With the production of
Final Fantasy VII, Square decided to shift their projects to
Sony Computer Entertainment's new
PlayStation console, prompted by the affordability of CD-ROM distribution, compared to Nintendo's continued use of expensive
cartridges. This shift caused a long-standing rift between Square and Nintendo; one Square employee recalled Nintendo telling the company to "never come back". In 1996, Square's final project with Nintendo was
Sting Entertainments
Treasure Hunter G for the Super Famicom, while the company debuted
DreamFactory's
Tobal No. 1 for the PlayStation that same year. Soon after, the company signed a licensing agreement with Sony, who gained the exclusive right to publish Square's next six games in the West. Square continued work on
Final Fantasy VII, with Kitase as director, Naora as art director, Nomura as lead artist, and Nojima as scenario writer. Released worldwide in 1997,
Final Fantasy VII was a worldwide commercial and critical success, bringing Square international fame. Also in 1997, at Square's invitation, Takechi returned and took Mizuno's place as President. Three new hires during the period were
Shinji Hashimoto,
Yasumi Matsuno, and
Masashi Hamauzu. Hashimoto joined in 1995 as promotions producer for
Final Fantasy VII. Matsuno, along with a number of other developers, had left
Quest Corporation following the release of
Tactics Ogre (1995), and worked with Sakaguchi on
Final Fantasy Tactics (1997). Hamauzu joined in 1996, and worked on
Final Fantasy spin-off titles and the
SaGa series. Sakaguchi, working on other projects, took on the role of executive producer for the series beginning with
Final Fantasy VIII, and Hashimoto stepped in as producer. Hirata went from an administrative position to lead producer, focusing on diversifying Square's library into new game genres. Several properties were introduced during this period. These included
Parasite Eve, based on a
novel of the same name by
Hideaki Sena;
Front Mission, which began on the Super Famicom but was transferred to the PlayStation beginning with its
second entry; and the
Final Fantasy spin-off series
Chocobo, starring an incarnation of the
titular mascot character. As Square was estranged from Nintendo at the time, the company supported other platforms including the
WonderSwan and
Windows. Late in the PlayStation's lifecycle, Square continued to support the console with multiple releases, such as
Threads of Fate (1999) and
Vagrant Story (2000). The company also began work on
PlayOnline, a digital storefront and a platform for online game services and web content. During the late 1990s, Square launched an initiative to give teams of younger staff members a chance to create experimental titles on smaller budgets. Among such titles were
Xenogears,
Soukaigi, and
Another Mind. Around this time, several staff members departed Square due to creative differences or a desire to work on their own projects. These included Takahashi and Tanaka, Fujioka, Nishi, Kikuta, Mitsuda, and
Mana artist Shinichi Kameoka. In April 2000, Suzuki was appointed Square's new President, while Takechi became a company chairman. Also at this time, two outside directors were appointed,
Kenichi Ohmae of Ohmae & Associates and Makoto Naruke of
Microsoft. The corporate reshuffle was intended to strengthen Square's overseas connections and bring in technical and administrative support for future digital and online content. Alongside this,
Yoichi Wada joined the company as a company director and eventually COO. In August 2000, Square was listed on
Tokyo Stock Exchange's first section, which includes the largest companies on the exchange.
2000–2003: The Spirits Within, final years In addition to leading production on
Final Fantasy IX (2000), Sakaguchi also worked at the 1997-established Square Pictures studio on a
Final Fantasy feature film. Titled
Final Fantasy: The Spirits Within, it was planned as Sakaguchi's first push towards cross-media storytelling; however, the project ran over budget and ended up costing Square and co-producer
Columbia Pictures US$137 million. Upon its release in 2001,
The Spirits Within was met with mixed critical reception, and grossed only $85 million. Labeled as a
box-office bomb, the film damaged Square's finances, and led to the closure of Square Pictures. Following both the failure of
The Spirits Within and a delay of
Final Fantasy X (2001) for the
PlayStation 2, Square suffered a financial loss for the first time, prompting Sakaguchi, Takechi, and director Masatsugu Hiramatsu to resign from their positions. Sakaguchi was kept on as executive producer for
Final Fantasy, while Takechi and Hiramatsu were retained as external consultants. This period left Sakaguchi in a state of low morale. In late 2001, Suzuki stepped down as President, and was replaced by Wada. Yosuke Matsuda became Senior Vice President. Kenji Ito also left during this period to work as a freelance composer. Prior to the film's release, rival company Enix was proposing merging with another game company to alleviate development costs, opening serious discussions with Square in 2000. Square's financial losses with
The Spirits Within prompted Enix to halt discussions. Under Wada, the company underwent restructuring with the intent of streamlining production and resources, and cutting development costs to increase profits. After evaluation of its financial position, and with changes to the
console war due to Microsoft's
Xbox, Square opened talks with Nintendo for the first time since their breakup in the 1990s. The talks were successful, with
Final Fantasy Crystal Chronicles beginning development for the
GameCube in late 2001. Square also began production on
Final Fantasy X-2, the first direct sequel to a
Final Fantasy game.
Final Fantasy X-2 was Sakaguchi's last credited project at Square, and he left the company in 2003. Around this time, Square also began development on
Kingdom Hearts (2002), with Nomura making his directorial debut. The game was a collaboration between Square and
The Walt Disney Company, blending Disney characters with
Final Fantasy elements in an original story.
Kingdom Hearts was Shimomura's last project as an in-house composer before going freelance in 2002. Also released in 2002 was the Japanese version of
Final Fantasy XI, the company's first
MMORPG. Conceived by Sakaguchi, it was developed by the
Chrono team and led by Ishii.
Final Fantasy XI and its first expansion was Kato's last work for Square before leaving in 2002 to go freelance. Following the commercial success of
Final Fantasy X and
Kingdom Hearts, Square and Enix resumed talks and agreed to merge their two companies. Wada described it as a merger of two companies "at their height". Despite this, the merger had its skeptics, particularly Miyamoto who did not want to see his
controlling stake diluted in a merged company. Miyamoto's issue was resolved by altering the exchange ratio to one Square share for 0.85 Enix shares, and the merger was greenlit.
Square Enix was formed on April 1, 2003, with Enix as the surviving corporate entity and Square dissolving its departments and subsidiaries into the new company. Around 80% of Square's staff transitioned into Square Enix. Square's final release was the Japanese version of
X-2. ==Structure==