[08/09/2012] Former Squaresoft exec calls Enix merger a “complete failure” – report

[Ohri-Jin]

Thu, Nov 08, 2012 | 01:20 GMT
[h=1]Former Squaresoft exec calls Enix merger a “complete failure” – report

[/h]

In response to Square Enix’s less than stellar financial report this quarter, former Square president and Square Enix executive Hisashi Suzuki has poured scorn on the publisher’s performance. According to Kotaku‘s translation of a series of Tweets, the Sega director apparently argued that a failure to increase stock value since the merger demonstrates that it was a “complete failure”. He also said the joint company has “no vision for the future”. Harsh.



Source - http://www.vg247.com/2012/11/08/former-squaresoft-exec-calls-enix-merger-a-complete-failure-report/

 

[Baseballbat Boy]

Of course it's a fucking failure.
Let's count how many new franchises they created after merging: 1
Let's count to how many of their previous project they created sequels after merging: 2
Were their main series selling better than before?: No, they are selling less.
Were they in any way influencing the industry like before?: No, 80% of their games are for outdated portable garbage.

Just go back to being Square.

 

[Silver Rocket]

How long did it take you to figure this one out, when it was right in front of your nose, Square?

 

[Mr. Zombie]

It's simple: when we strive to be successful, we fail. When we strive to be original, we succeed. It's true even for companies.

For money's sake, coward companies stop taking risks and stop innovating. That's what happened to Capcom and Square. It's not fault of the merging, both Square and Enix were successful. It's greed's fault.

 

[AuronX]

Mr.Zombie totally agreed. I was just talking with someone about this yesterday, but honestly it's not a unique problem with Square Enix. Activision, Ubisoft, EA...all of the major producers of today haven't produced noteworthy original content since the beginning of this console generation. Since then it's just been sequel after sequel after sequel. Developers are running the current generation as a whole into the ground trying to squeeze as much profit out of it as possible instead of taking risks that in the end would be more profitable.

 

[Razberry Knight]

Lol. i honestly find this funny. though it doesn't seem to be really about game quality but sales....i remember them losing profit and blamed it on people not buying console games.

 

[Nocturne]

Im mixed on this. First off, he really doesnt have much ground to stand on, because I believe it was under his direction, Square almost went under and had to have Sony buy stock in the company to keep them afloat.

Some great games came from SE this gen, especially if you consider the portable market. We had a ton of great games from them. People tend to look at only HD consoles though and say SE as failed. Most of their games havent failed. They either sold moderately ok or great. I dont think there has been a game they released (besides Sleeping Dogs) which has lost them money.

I entirely agree with him saying Yoichi Wada has led them down a wrong path. With F2P, social gaming, and the like, we are seeing a huge step back in games. Developers think that their games will sell amazing on these and want to pursue it because ultimately they can put much less effort into the games and potentially make less money. We are also catering to the gamers who want to get their games essentially for free, thus lowering what the value of games should be. Should games be $60? Debatable, but they also shouldnt be free. Tablet gaming isnt going to be any better either. It runs into the same problems as with phone gaming:: the controls are absolutely awful without at the very least, a mouse and keyboard.

SE had it rough, along with any many other developers because of the switch to HD. They started late in the game and I think next gen they wont be as bad off with it, if not great with it. Bad thing is, the gaming press in the West, as well as your average FPS gamer, has attached, and continues to attach, anything from Japan as inferior, when it isnt the case. The gaming media in Japan is far more open to experiences from all over, whereas the gaming media, press, many developers, etc have become the xenophobic ones.

Also, as a side note, anyone who is in charge over at Sega has zero ground to stand on. They have continuously spat in the face of their fans and have been running that company into the ground.

 

[Razberry Knight]

Im mixed on this. First off, he really doesnt have much ground to stand on, because I believe it was under his direction, Square almost went under and had to have Sony buy stock in the company to keep them afloat.

Some great games came from SE this gen, especially if you consider the portable market. We had a ton of great games from them. People tend to look at only HD consoles though and say SE as failed. Most of their games havent failed. They either sold moderately ok or great. I dont think there has been a game they released (besides Sleeping Dogs) which has lost them money.

I entirely agree with him saying Yoichi Wada has led them down a wrong path. With F2P, social gaming, and the like, we are seeing a huge step back in games. Developers think that their games will sell amazing on these and want to pursue it because ultimately they can put much less effort into the games and potentially make less money. We are also catering to the gamers who want to get their games essentially for free, thus lowering what the value of games should be. Should games be $60? Debatable, but they also shouldnt be free. Tablet gaming isnt going to be any better either. It runs into the same problems as with phone gaming:: the controls are absolutely awful without at the very least, a mouse and keyboard.

SE had it rough, along with any many other developers because of the switch to HD. They started late in the game and I think next gen they wont be as bad off with it, if not great with it. Bad thing is, the gaming press in the West, as well as your average FPS gamer, has attached, and continues to attach, anything from Japan as inferior, when it isnt the case. The gaming media in Japan is far more open to experiences from all over, whereas the gaming media, press, many developers, etc have become the xenophobic ones.

Also, as a side note, anyone who is in charge over at Sega has zero ground to stand on. They have continuously spat in the face of their fans and have been running that company into the ground.

I dont think that was the reason for the merger

 

[Nocturne]

I dont think that was the reason for the merger

So making money and becoming more successful wasnt the point of the merger? All of what I said relates

 

[Razberry Knight]

So making money and becoming more successful wasnt the point of the merger? All of what I said relates

But it doesnt relate to the point. From what i see they wanted more games under their name and gain money from them. But seeing as how the enix team so far has only made dragon quest x. The merger was practically pointless.

 

[Kuja9001]

He's just sour that Spirit's Within crashed and almost killed the company, its his fault(plus sakaguchi) that the company is doing terrible if only they didn't waste money on that film.

 

[Rapture]

Wah wah wah wah wah. Cry me a river

Honestly, all companies ever do is squabble and point fingers. The easiest thing to do would be to fix things rather than to piss and moan about who did what

If they don't like the merger separate then. I'm sure without Enix though, they'd fail and they'd have more problems then they already have.

I don't think they've failed BECAUSE of Enix though, because Square has been putting out what's in my opinion crap games for awhile now. I don't want mmorpg's, mobile games, or portable games, I want DECENT CONSOLE GAMES. If you can't manage to put out a decent one of those, then I don't know what to tell them as it seems that with their past theory of rushing out games with recycled ideas, scenery, and characters they are setting themselves up for failure. The last decent looking game they brought out was Type 0 and they can't even manage to localize it here in the U.S.

 

[Razberry Knight]

I dont know if this has heen said before but once merged, it cant be split. Im not 100% on that.

 

[Nocturne]

Enix has done more than Dragon Quest X. Not as much as Square, but they do more than you think. Just most of it stays in Japan.

 

[Razberry Knight]

Enix has done more than Dragon Quest X. Not as much as Square, but they do more than you think. Just most of it stays in Japan.

Lets not play devil's advocate here.

Im talking about recently

Dragon Quest, and Star Ocean. After final fantasy XII, they really didnt make much.

Dragon Quest isnt as huge here as it is in Japan and Star Ocean series comes out at an inconsistent pace, and then we got all the smaller games such as Ogre Battle but we dont get to see much of them.

 

[Martel]

I'm going to actually take a stance nobody would expect and say that this merger wasn't a complete failure. I think what people fail to observe is the corporate environment: mergers and acquisitions are how a lot of firms survive, and merging with Enix allowed Square to enhance its business prospects. You need to differentiate between the merge and decisions that have been made after the merge occurred; the two do not necessarily tie in, especially not in this industry. It might have made very poor use of its resources in the last few years - FFXIII is proof enough of that - but the merger itself cannot really be deemed as a complete failure, because the company hasn't entirely collapsed: if the merger had been a complete failure, the company would be long gone by now in all probability, either broken up or absorbed into another, bigger company.

There is also the changing economic climate, and the state of gaming in general. Technology has advanced in leaps and bounds since 2003; that was almost a decade ago now. Gaming costs a lot more now, and gets wider media coverage: it's a competitive and more expensive industry. Then we've got the recent recession, which has fucked with pretty much everyone in some fashion. You can't blame Square Enix's lackluster performance entirely on poor business decision-making (although that is certainly a huge part of it) and you sure as hell cannot attribute recent failures to a merger that happened in 2003, considering this. You cannot call it a failure based upon that.

I would like to see a record of their stock values, though: he has some cause for saying that no substantial increase in share price indicates that the merger wasn't a success, but then, a share price increase does not always follow a merger; in fact, there are times when the share price will drop in anticipation of the merger, and then rise later. Not to mention there are other reasons for undertaking a merger besides from generating additional profits and, given Japan has historically adopted a form of stakeholder capitalism, giving less priority to the shareholders than Western businesses, I would be quite surprised if their motives for this merger were purely for the generation of shareholder wealth. As a global company, I expect Square Enix does adopt the strategy of shareholder wealth maximization now if it didn't then, but that still doesn't necessarily mean the merger was undertaken to increase shareholder wealth, rather than for company stability, or to gain economies of scale, or any number of other reasons I could name which do not directly tie-in to share price increases. A merger is a long-term commitment and, whilst it's been nearly a decade since it happened, meaning there has been time enough to evaluate it, the lack of additional profit or a share price increase does NOT mean it was a failure. Who knows, the workforce could be extremely happy, which would indicate success. It's a lot more complicated than just "Oh, there was no share price increase, so it was a failure." which this statement implies. I think to make that judgement fully, you need to be one of two things: an insider, or an analyst with access to inside information. Being an employee or SEGA, he is neither. Nor am I, but then, I'm just trying to provide alternate options, because as far as I can see he has a very weak basis for saying this with no real support behind it. He's posting it on Twitter of all places, making it even more ridiculous.

I want to know what his basis is for this assessment. What were the exact stock price movements, and how did this compare with the industry average? Did he have a similar merger that was a success or failure that he could use to compare? Does he know the primary reasons behind his merger, or is he just saying this because he doesn't like it? I get the feeling that it's the latter, but I have to admit that I would like to see the statistics behind this. It's a bit difficult to take him seriously without them...but then, it's difficult to discredit his assessment either. At least in terms of share prices. I just find it difficult to believe that a merger between two high-profile companies that occurred nearly a decade ago could be considered a failure when the company is still in business and these complaints have only been coming in volume recently, with the whole FFXIII fiasco. Call me a cynic, but there it is. I would attribute Square Enix's failure to other things, and not the merger.

As a publisher, Square Enix are doing fine; they have published some truly excellent games in recent years, such as NieR. Although the success of a published game cannot be attributed to its publisher; the developer is the one that deserves the credit for creating the thing in the first place. So, as a developer, they have a great deal to make up for given their recent performance, but it remains to be seen whether or not they can do that as of yet, both in terms of making good quality products and in turning a profit on those products. The number of IPs doesn't necessarily matter, it is the sales they generate that matters: is it more profitable to invest in making a new FF game, a well-established IP, or in spending unfathomable sums on a new IP that may or may not kick off? In this current climate, I know which I'd choose. Longer development times are due just as much to the technological advancement as they are to poor resource management, and neither of those factors has anything to do with the merger: Square Enix has no control over advances in technology, and bad management is bad management no matter what; a merger doesn't suddenly make it even worse, unless the two companies are massively incompatible, which Squaresoft and Enix obviously were not, since they've been in this together for nearly a decade now.

To say the company has no long-term prospects is sheer stupidity, because Japanese business is built on long-term stability over short-term gain and, whilst Square Enix is a global company, the fact remains that the vast majority of its key players are Japanese, and it originated in Japan. That's clearly nonsense. They have long-term prospects. Whether or not those long-term prospects are any good is another matter entirely. If they didn't have long-term prospects back then, this would have been identified much earlier, and there would have been outcry far, far sooner than this. It is questionable whether or not Square Enix would even exist now if that had been the case. That's not harsh, that's just plain ignorant.

My point, then? These judgements need at least another five or ten years before they can be made with any certainty. Technology needs to stop advancing at such a rapid pace, and we need a few more years of financial statements, before we can fully judge Square Enix's success, and begin to identify just how much of it is their fault and how much is due to the changing industry. Right now, they've got a LOT of valid excuses for poor performance and, whilst they are clearly not doing the best they can - I shudder to imagine how they conduct day-to-day business - they are not performing as badly as they might be because they are still in business, and you can hardly attribute all of their failures to this point to the merger when they have produced some quality products after the merger, and been able to turn a profit. This guy is clearly dredging up old history and looking for someone to blame. He should start by blaming individuals, not the company as a whole. Honestly. These people are supposed to be objective professionals, not squabbling children.

I also think it very rich that someone from SEGA, of all companies, is saying this. Given that they were forced out of the console race nearly three generations ago now and have since butchered their most powerful franchise, and left several other popular ones to die, they're the last people who should be criticizing Square Enix about their business practices. SEGA are what Square Enix could become in the future, if they haven't already, but the point is that they've had their heyday, and it was a bloody long time ago. Maybe if they'd undergone a merger themselves they'd still be major players in this industry. Idiots.

 

[Razberry Knight]

The merger happened in 2003, thats 9 years already., i think they ad more than enough reason to say what they said.

 

[kratoscar2008]

Well the only thing i can say is that SE hasnt topped the quality of Squaresoft and Enix own tittles.

So far this gen SE is simply not worth.