The film failure that led to the Enix–Square merger (2002)

What the “merger of crisis” left behind

What marks the shape of this merger is that, although it was a combination in which the side in crisis joined the asset-light side, the word chosen at the announcement was the forward-looking “an aggressive merger.” The defensive fact of a failed film business and the offensive logic of widening customer contact and going global sat side by side; and in the fight over the merger ratio, the seemingly weaker Square used shareholder opposition as a weapon to raise its terms. Even in a merger born of crisis, the balance of power between the parties was not as one-sided as the numbers suggest.

The fruit — uniting the two great IP — was clear, but the price of absorbing the in-house studios was hard to see right after the merger; it surfaced only slowly, through the later 100% ownership strategy and the rebuild of Final Fantasy XIV. Suzuki’s remark that “the merger was a complete failure” may be hindsight offered more than a decade on, yet it seems unchanged that this choice — letting go of a publisher’s asset-light footing to take on the weight of in-house development — still defines the outline of the management problems the Square Enix of today, more than twenty years later, must face.