A serious investor in Remaining Fantasy maker Square Enix has revealed a 100-page doc criticizing the corporate’s efficiency and calling for a “basic reassessment” of its enterprise, citing perceived “sluggish” income and earnings.
In a press statement, 3D Funding Companions — Square Enix’s third-largest investor, holding round a 14% stake — claims there was a “vital deterioration in incomes energy” regardless of the corporate proudly owning some of the world’s greatest franchises and being a “preeminent Japanese recreation developer.”
“What Square Enix as soon as introduced to life was a ‘tradition’ that formed an period, and an ‘trade’ that fascinated the world. Is Square Enix actually giving start to one thing genuinely new, or has Square Enix turned away from the challenges earlier than it and let its steps falter?” the doc asks, imploring that the agency “surprises us, strikes us, and ignites that zeal we as soon as felt,” as “avid gamers throughout the globe have been ready, endlessly, for that irreplaceable expertise.
“Nonetheless, underneath the newly established administration construction, the previous three years have been marked by a pronounced stagnation in each income development and profitability, with a vital deterioration in incomes energy, as evidenced by declines in working earnings, return on fairness, and different key efficiency metrics.”
Calling this “essentially the most crucial administration problem” presently confronted by the Japanese firm, 3D1P calls for the agency to “devise and rigorously implement concrete countermeasures addressing crucial administration points,” together with the “extreme fragmentation of the event portfolio, product design, and promotional methods which have led to declining tie ratios, and inflated expenditures resembling improvement prices.”
“We respectfully urge a basic reassessment of the medium-term administration plan, with the target of totally unlocking the potential of Square Enix’s distinguished mental property and thereby maximizing company worth.”
Finest Mainline Remaining Fantasy Video games
Finest Mainline Remaining Fantasy Video games
After straight evaluating Square Enix with Japanese rivals like Capcom, Sega, Konami, Bandai Namco, and Nintendo — and cherry-picking “harsh” responses from Metacritic of each new and established IP — the funding agency revealed that it had been “engaged in ongoing dialogue” with Square Enix since final summer time.
“Since July 2024, now we have been engaged in ongoing dialogue with SQEX HD. In October 2025, we defined to President Kiryu and Outdoors Director Abdullah the administration points of SQEX HD as seen from the market. We additionally introduced to President Kiryu our proposals.
“Nonetheless, in response to this request, President Kiryu replied solely with a temporary e-mail stating, with out addressing any of the particular administration points or options we had raised, and with out offering any concrete rationalization of his reasoning.”
3D Funding Companions is now sharing its views on the perceived administration points “with all shareholders” to “accumulate [their] frank views, and, based mostly on the views we obtain, have interaction in constructive dialogue with SQEX HD to improve its company worth once more.”
IGN has requested Square Enix for remark.
Former Square Enix exec and CEO of Genvid, Jacob Navok — the identical exec that just lately claimed “Gen Z loves AI slop” — also weighed in, saying that the presentation from 3DIP primarily has two themes: “gross sales are unhealthy” and “dev prices are excessive.”
“These are the identical points I addressed in 2024 when discussing the issues with Square Enix’s gross sales for FF16 expectations for gross sales had been set appropriately,” he added. “They weren’t met as a result of Square Enix gross sales had been poor, and the sport value an excessive amount of to make.”
The very public criticism comes simply weeks after Square Enix introduced mass layoffs, impacting over 100 people, alongside a broader effort to consolidate its publishing group and focus its improvement work in Japan. It had additionally already offered Crystal Dynamics, Eidos-Montreal, Square Enix Montreal, and a quantity of related IPs to Embracer Group, and laid off workers across its western operations in 2024.
Square Enix additionally expects 70% of its QA work to be dealt with by generative AI by the tip of 2027. The corporate has acknowledged prior to now that it intends to be “aggressive in making use of AI” throughout each improvement and publishing.
Vikki Blake is a reporter for IGN, in addition to a critic, columnist, and guide with 15+ years expertise working with some of the world’s greatest gaming websites and publications. She’s additionally a Guardian, Spartan, Silent Hillian, Legend, and perpetually Excessive Chaos. Discover her at BlueSky.