Square announces restructuring of development and other key departments.

Strengthening profits through separate accounting.

   The household-use game maker Square will, by March 2000, divide the current company into as many as 8 subsidiary companies. By introducing separate cost accounting for each subsidiary, Square hopes to control the rapidly rising cost of production. Marketing and Quality Assurance divisions will also become profitable by taking on contracted work from other game companies. Adapting to the current trend towards interlinked management, Square plans to increase the profit-making potential of the Square group as a whole.

   Departments that are scheduled to be cut off into subsidiaries include those directly involved with game production, such as CG, Planning, Programming, and Sound, along with managerial departments such as Computer Support, Network Administration, and Customer Support. Departments remaining in the main company willbe those responsible for strategic planning, and public relations, along with the central development department responsible for Square's flagship title, the Final Fantasy series. Software production teams will be formed by gathering planning, CG, music, and marketing staff from the subsidiary companies.

   Square is currently developing a full CG movie "Final Fantasy: The Movie," for world-wide release. In order to create a team with the high level of technological expertise neccessary to compete in the global market, the CG production facilities will be established independently.

   Square of Japan intends to limit forays into gaming genres in which the company has little experience, instead focusing on their strengths, such as RPGs. 6 to 8 major project teams will be formed at a time, and with each project taking 2 or more years to complete, the company plans to release 2-3 titles per year. Teams would be formed by taking staff from the subsidiary companies, such as Programming, Planning, and CG.

   In addition to producing CG for other company's games, the new subsidiary will work on such things as special effects for movies and short films for special events. This will create a facility capable of competing with famous American studios for the rights to work on CG effects such as those used alongside actual footage in recent movies like Titanic.

   The Sound devision, responsible for creating sound effects and BGM for current Square games, will build up the multi-channel sound generation technology neccessary for the coming generation of DVD-based media.

   Previously, divisions of the company such as program quality assurance and customer service did not directly generate profits. With the current restructuring, these departments will accept work from other companies in the time between working on Square projects.

Management resources focused on big projects: an explanation

   Behind Square's bold restructuring plan is a development philosophy that values focusing manpower and production spending on big, blockbuster projects. Square's current plan is to cut off small projects in genres where Square is a newcomer, and gather developers into 6-8 major project teams. The development of one game will take about 2 years, with management depending on the release of 2 or 3 titles a year.

   Because of the high risk involved when a big title performs poorly in sales, it has become neccessary to divide departments like CG and management support into subsidiaries, each accountable for their own cost management, so that profits for the group as a whole will rise.

   With the upcoming release of Sony Group's next generation game platform, the "Playstation 2," the level of international competition will rise sharply and game companies without a flexible, maneuverable organization will be left behind.