Square Enix restructuring into four divisions after weak Q3

Square Enix's impending restructuring reportedly won't result in a loss of employees.

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Square Enix experienced a disappointing Q3, and as a result the company is making big changes to its business structure.

The company is looking to reorganize down from 11 units to just four, spurred on by underperforming core titles and a combination of other factors. Square Enix's net sales were down 4.8%, and profits had plummeted 60.1% year-over-year.

The restructuring was outlined during the call in response to an investor speaking on the company's previous Q2 briefing, after Square Enix noted it would be developing additional smartphone games in the months to come.

"As of Q3 of fiscal year 2020, we plan on reorganizing and consolidate the 11 existing business divisions at Square Enix into four business units in order to increase the efficiency of our workflows, make more effective use of our resources, and consolidate our expertise with the aim of improving profitability," said president Yosuke Matsuda on the company's Q3 earnings call.

Matsuda noted that the decline in numbers could be attributed to Just Cause 4's "sluggish start" and the fact that big names like Shadow of the Tomb Raider and Dagon Quest Builders 2 just couldn't keep the numbers afloat on their own.

The changes are limited currently to Square Enix's Japan studio and are scheduled to take place in April 2019, according to a comment given to GamesIndustry.biz. There will not be any sort of reduction in the workforce, thankfully, as the changes will only apply to help consolidate business units in an effort to allocate resources in a more effective manner.

It remains to be seen what these changes will mean for the rest of Square Enix, if they mean anything at all, but we'll be following the story as it develops and bringing you all the latest updates on the business side of things as it happens. Keep it locked to Shacknews for additional updates. 

Senior Editor

Fueled by horror, rainbow-sugar-pixel-rushes, and video games, Brittany is a Senior Editor at Shacknews who thrives on surrealism and ultraviolence. Follow her on Twitter @MolotovCupcake and check out her portfolio for more. Like a fabulous shooter once said, get psyched!

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  • reply
    February 21, 2019 11:54 AM

    Brittany Vincent posted a new article, Square Enix restructuring into four divisions after weak Q3

    • reply
      February 21, 2019 2:26 PM

      typo: Dagon Quest Builders 2

      Anyways, did they really expect dragon quest builders 2 to sell a ton of copies? It sounds like they're just using anything as an excuse.

      • reply
        February 21, 2019 3:04 PM

        Dargon Quest

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        February 21, 2019 3:07 PM

        I'm totally buying DQB2 day one as soon as it hits the Switch. The first was very solid.

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          February 21, 2019 4:46 PM

          The first wasn't a bad game, but I wouldn't expect it to compete with other high profile releases.

    • reply
      February 22, 2019 11:22 AM

      Didn't Kingdom Hearts 3 sell 5 million copies? Christ, how much of a cut did Disney take?