In Brief
- Square Enix, known for its popular franchises like Final Fantasy, Dragon Quest and investor in the crypto game Soccerverse, announced layoffs in its U.S. and European divisions.
- The company is increasing its use of generative AI in game development, aiming to automate 70% of QA and debugging tasks by 2027.
- Square Enix plans to shift more game development back to Japan, following the sale of three studios and various franchises in 2022.
Structural Changes and Layoffs
Square Enix, a prominent video game publisher, confirmed the reduction of its workforce in the United States and Europe as part of a broader strategy to consolidate and optimize its operations. Although the company did not disclose the exact number of employees affected, reports suggest that 137 jobs are at risk in the London office alone, with additional cuts anticipated in the U.S. “This was an extremely difficult decision, made following careful consideration and analysis by our leadership, in order to best position the group’s long-term growth,” a company spokesperson explained.
Focus on Generative AI
Simultaneously, Square Enix is intensifying its focus on generative AI technology, a move that includes automating significant portions of the game development process. A recent presentation revealed plans to leverage AI tools to handle up to 70% of QA and debugging tasks by the year 2027. This initiative is part of a collaboration with the Matsuo Laboratory at the University of Tokyo, aiming to pioneer advanced AI technologies in game creation.
Strategic Realignment
The strategic adjustments also involve a geographical shift in game development responsibilities, as Square Enix intends to move more of its production back to Japan. This decision follows a shrinking global footprint, highlighted by the 2022 sale of three of its studios and several major gaming franchises, in order to fund new ventures in AI and blockchain gaming.
Industry-Wide Trends
Square Enix’s pivot towards AI reflects broader industry tendencies, with major gaming firms like Ubisoft, Electronic Arts, and Krafton also investing heavily in this technology. Despite these innovations, the gaming sector has experienced significant upheaval, marked by widespread layoffs across various companies. This period of industry adjustment emphasizes the evolving landscape of game development, influenced by emerging technological capabilities.
