Key Takeaways
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- Square Enix is facing criticism from one of its largest shareholders, 3D Investment Partners, over stagnant revenues and declining profit margins for nearly three years.
- The shareholders report identifies two primary issues: the struggling console and mobile division and accounting losses tied to project cancellations.
- The focus on remasters and remakes of older IPs is viewed as unlikely to drive substantial growth or restore Square Enixs reputation.
- 3D Investment Partners urges other shareholders to join them in demanding a fundamental review of Square Enixs midterm management plan, citing concerns about the companys strategy, capital allocation, business portfolio, governance, and growth opportunities.
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Activist Shareholder Critiques Square Enix’s Management and Strategy, Calling for Midterm Review and Revival of Profitability
After a string of disappointing releases, including Forspoken, Babylon’s Fall, and Final Fantasy 16, and the announcement of a restructuring plan met with skepticism, Square Enix is now facing opposition from one of its largest shareholders. 3D Investment Partners, a Singapore-based investment fund holding 14.6% of Square Enix’s capital, has published an extensive 100-page document criticizing the company’s management and urging other shareholders to join them in demanding a fundamental review of its midterm management plan. Known for its activist stance, 3D Investment Partners targets companies it deems underperforming to directly influence their strategy. In its report, 3D Investment Partners argues that despite its well-known franchises (Final Fantasy, Dragon Quest, Kingdom Hearts), Square Enix has seen stagnant revenues and declining profit margins for nearly three years. The report states that Square Enix is falling behind its Japanese competitors, citing Capcom’s impressive performance, Konami’s successful use of its licenses, Bandai Namco’s string of hits, and Nintendo’s continued dominance.
Activist Shareholder Raises Concerns over Square Enix’s Console and Mobile Performance, and the Focus on Remasters and Remakes
Square Enix Holdings Co. Ltd., founded in 1975, operates in Digital Entertainment, Amusement, Publishing, and Rights and Properties. The company’s most recent revenue (TTM) is 226.19 billion, with a net income of 17.47 billion. Square Enix employs approximately 4,600 people. (Square Enix Holdings Co. Ltd., Shinjuku Eastside Square 6-27-30, Shinjuku, Shinjuku-ku, 160-8430 Japan. Phone: 81 352928000. Website: [https://www.hd.square-enix.com](https://www.hd.square-enix.com)). The Singaporean fund identifies two primary issues: the consoles and mobile division’s struggle to translate its licenses into consistent hits and significant accounting losses tied to project cancellations, a problem that has worsened over the past decade. HD-2D remakes offered some promise last fiscal year with Dragon Quest 1, 2, and 3, but the fund views the company’s focus on remasters and remakes of older IPs (such as SaGa Frontier 2, Final Fantasy Tactics, The Ivalice Chronicles, and Octopath Traveler) as unlikely to drive substantial growth or restore Square Enix’s reputation.
Square Enix’s Struggling Subsidiary and Lack of Detailed Restructuring Plan Sparks Shareholder Concern
Luminous Productions, Square Enix’s subsidiary, has experienced financial difficulties, including a restructuring and layoffs for roughly half its team after the underperformance of Agnis Philosopher Stone. Luminous developed the engine used in Final Fantasy XV and the now-canceled Avengers project. Despite these challenges, Square Enix continues to support Luminous Productions and plans future collaborations. 3D Investment Partners projects that the announced releases for 2026—another remake (Dragon Quest VII Reimagined) and The Adventures of Elliot: The Millennium Tales, a project projected to have little impact—do not indicate a significant shift. The fund argues that Square Enix’s promised restructuring, involving a multiplatform strategy and increased release frequency, appears to be more of a slogan than a detailed plan. They cite overly modest goals, a vague long-term vision, and a lack of concrete metrics to assess the effectiveness of the proposed measures. The fund claims it presented a detailed analysis and proposals to Square Enix CEO Takashi Kiryu in October. Kiryu’s response—an email stating that everything was progressing appropriately—was perceived as a rejection, prompting the fund to publicly criticize the company in an effort to mobilize other shareholders.
Shareholder Urge for Feedback and Action Plan on Square Enix HD’s Strategy and Management Issues
The 3D Investment document concludes with a direct appeal: “Therefore, we urge all Sqex Hd shareholders to read the presentation and share their sincere opinions on Sqex Hd’s strategy, capital allocation, business portfolio, governance, growth opportunities, and other related matters. We would appreciate receiving feedback from as many shareholders as possible so that we can convey their opinions to Sqex Hd’s management board and help address its management issues.” With a major shareholder now publicly challenging its strategic direction, Square Enix faces pressure to demonstrate a clear path to sustainable growth and profitability.
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Did you know that Hideo Kojima, the mastermind behind Metal Gear and Death Stranding, recently confessed his uncertainty about his upcoming Xbox horror game, OD? In a revealing interview with ananweb, he admitted that this departure from his familiar systems might not appeal to everyone. But here’s where it gets interesting – he claims the latest trailer hides numerous clues for players to decipher the game’s concept! Want to know more about this enigmatic project? Check out Sophie Laurent’s article on PlayersForLife Kojima Unsure If OD Will “Function” as a Game to learn how Kojima plans to blend gaming, filmmaking, and communication in OD. In his latest interview with Ananweb, gaming legend Hideo Kojima chats about his upcoming projects, giving us a sneak peek into the mind of this industry titan. Just last month (2025-12-08), he spilled some beans on his next action-packed espionage game, Physint, a joint venture with Sony that promises to challenge our perception of gaming cinematics. Kojima’s plan? To integrate film crew professionals into the development process, pushing the boundaries between cinema and games even further. If you’re as excited about this revelation as we are, don’t miss out on Ahmed Hassan’s insightful coverage – check it out here Kojima Reveals Plans to Collaborate with Film Crew Members, Not Just Actors, for Physint. In other exciting gaming news, Carlos Mendoza takes us on another deep dive into the world of Elden Ring with his latest post, ‘Elden Ring: Nightreign – The Forsaken Hollows Trailer Reveals Sealord’, published just yesterday. If you’re eager to explore new horizons in this iconic series, be sure to check out this insightful article that delves into the upcoming expansion’s trailer and its implications for players. Don’t miss out on this opportunity to stay ahead of the curve – click here Elden Ring: Nightreign – The Forsaken Hollows Trailer Reveals Sealord to read all about it!
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