A serious investor in Ultimate Fantasy maker Sq. Enix has revealed a 100-page doc criticizing the corporate’s efficiency and calling for a “elementary reassessment” of its enterprise, citing perceived “sluggish” income and income.
In a press assertion, 3D Funding Companions — Sq. 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 a number of the world’s greatest franchises and being a “preeminent Japanese recreation developer.”
“What Sq. Enix as soon as dropped at life was a ‘tradition’ that formed an period, and an ‘business’ that fascinated the world. Is Sq. Enix actually giving start to one thing genuinely new, or has Sq. 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 “players 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 progress and profitability, with a big deterioration in incomes energy, as evidenced by declines in working earnings, return on fairness, and different key efficiency metrics.”
Calling this “probably the most important administration problem” at the moment confronted by the Japanese firm, 3D1P requires the agency to “devise and rigorously implement concrete countermeasures addressing important 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 equivalent to growth prices.”
“We respectfully urge a elementary reassessment of the medium-term administration plan, with the target of absolutely unlocking the potential of Sq. Enix’s distinguished mental property and thereby maximizing company worth.”
After instantly evaluating Sq. 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 Sq. Enix since final summer season.
“Since July 2024, we now have been engaged in ongoing dialogue with SQEX HD. In October 2025, we defined to President Kiryu and Exterior Director Abdullah the administration problems with 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 short 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 “gather [their] frank views, and, based mostly on the views we obtain, have interaction in constructive dialogue with SQEX HD to reinforce its company worth once more.”
IGN has requested Sq. Enix for remark.
Former Sq. Enix exec and CEO of Genvid, Jacob Navok — the identical exec that not too long ago claimed “Gen Z loves AI slop” — additionally weighed in, saying that the presentation from 3DIP basically has two themes: “gross sales are dangerous” and “dev prices are excessive.”
“These are the identical points I addressed in 2024 when discussing the issues with Sq. Enix’s gross sales for FF16 expectations for gross sales have been set accurately,” he added. “They weren’t met as a result of Sq. Enix gross sales have been poor, and the sport price an excessive amount of to make.”
The very public grievance comes simply weeks after Sq. Enix introduced mass layoffs, impacting over 100 people, alongside a broader effort to consolidate its publishing group and focus its growth work in Japan. It had additionally already offered Crystal Dynamics, Eidos-Montreal, Sq. Enix Montreal, and plenty of related IPs to Embracer Group, and laid off employees throughout its western operations in 2024.
Sq. Enix additionally expects 70% of its QA work to be dealt with by generative AI by the top of 2027. The corporate has said up to now that it intends to be “aggressive in making use of AI” throughout each growth and publishing.
Vikki Blake is a reporter for IGN, in addition to a critic, columnist, and guide with 15+ years expertise working with a number 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.