Square Enix’s global growth strategy too often overlooks mobile

“Achieving major growth in the game industry is difficult now for companies that compete primarily in the Japanese market, given its greying demographics. As such, it is critical for our business that we produce hit titles that speak to the global market, which offers greater scale in terms of both customers and sales volumes.”

Former Square Enix president Yosuke Matsuda shared this company stance in the twilight of his tenure at its helm – but it’s a sentiment that’s been echoed by his successor, current president and representative director Takashi Kiryu.

It’s a salient point, too. This year, mobile player spending in Japan has hit its lowest level since 2017, down to $11.1 billion in 2024 with three weeks to go. According to AppMagic, the Japanese market has been in decline year-on-year since its peak of $17.9 billion in 2020.

It’s only natural, therefore, that those developers for whom Japan is a primary market would need to turn elsewhere to keep their revenue from falling apace.

Square Enix is among them. Its own mobile revenue is currently on track to hit a decade low this year by AppMagic estimates, while the company’s self-reported overall net revenue was down 18% in its Q1 FY2025 report.

So, looking to grow as a global company and to “leverage existing intellectual properties” on mobile, cases like Final Fantasy VII: Ever Crisis appear to be an ideal unification of goals. The $100 million maker builds upon the Final Fantasy VII IP by fleshing out returning characters with playable backstories and more.

The upcoming mobile adaptation of Final Fantasy XIV marks another clear example, intertwining brand expansion, global growth and mobile goals all in one game.

But this alignment of targets often isn’t the case.

Rather, when it comes to mobile, Square Enix has a habit of releasing its games exclusively in Japan, as is the case with its latest release Emberstoria, a brand-new mobile IP.

Once upon a time, it could have been argued that significant cultural differences between Japan and the Western world simply made certain titles unfit for a global release – unlikely to be worth the return on investment. We’ve previously delved into Gree and DeNA’s expansion plans a decade ago. But the landscape has changed.

As the West has become increasingly receptive to Japanese media to the extent that 42% of US-based Gen Zers are claimed to now watch anime weekly, the effects have bled into the games industry with major successes like Genshin Impact leveraging the artstyle – and finding its third-biggest mobile market in the US.

Even Cygames’ horse girl racing game Uma Musume: Pretty Derby was deemed worth the cost of localisation.

Embers of opportunity

Square Enix stated last year that an “endeavour to create new intellectual properties” on mobile would be key “to continue to produce hits”, and while its latest mobile title Emberstoria fulfills that new IP pledge, for now it’s missing the opportunity to grow Square’s presence globally.

Released on November 27th, 2024, the game is an anime-style RPG that’s part city builder and part real-time monster battler. Based in the fantastical aerial city Anima Arca, it sees humanity harness unearthed technology, revive fallen warriors and aim to overcome the monsters of Purgatory.

It’s a premise fitting of Square Enix’s brand at large with big names on board like lead character designer Yusuke Kozaki, whose artistic credits span multiple Nintendo franchises like Fire Emblem, Xenoblade Chronicles and even Pokémon.

Emberstoria marks his first credit on a Square Enix game, though Kozaki has worked with the company via the Donyatsu manga since 2011. Masashi Hamauzu served as the game’s composer, known for his musical contributions to many a Final Fantasy game.

Kozaki and Hamauzu’s contributions to the games industry have reached players globally, making them recognisable names to many overseas. This surely makes Emberstoria that much more fitting for an international release, yet Square has given no hint of any worldwide expansion for its newest IP.

Emberstoria’s launch also came at the tail end of Square Enix’s worst-performing month on mobile since April 2015, based on AppMagic data. But again, how much of a turnaround it can bring when reserved to a declining market remains to be seen.

Survival of the fittest?

Square Enix’s mobile game closures have been outpacing new launches this year, shrinking the company’s mobile portfolio with the likes of SinoAlice, Final Fantasy: Brave Exvius and Dragon Quest Monsters: Super Light all shutting down overseas and in Japan.

Japan exclusives Engage Kill and Fullmetal Alchemist Mobile also shut down shortly after their first anniversaries. The latter’s closure was directly attributed to difficulties in handling so many operational services.

Octopath Traveler: Champions of the Continent, meanwhile, is about to be transferred from Square Enix to NetEase, making it another title to leave the former’s portfolio as it refocuses elsewhere.

Bravely Default: Brilliant Lights is among the most surprising examples of Japanese exclusivity, being a mobile spinoff of a global series spanning multiple Nintendo hardware generations.

For over a decade, entries in the main series have released internationally on the 3DS and later on the Switch, but Square Enix reserved the mobile iteration to its Japanese audience, missing out on yet another opportunity to grow an IP further overseas. Ultimately, Brilliant Lights was closed down after just over a year.

But that doesn’t mean the end of days for Square Enix and mobile games. After all, Dragon Quest Walk is one mobile game that’s certainly found a market, having made over $2 billion in its lifetime. The location-based game outperformed Pokémon Go in annual revenue in its home country in 2023, making it the most lucrative geolocation game there that year.

Yet even this genre leader has been held back from the West.

“Speak to the global market”

“By sharing information within our group on the features unique to different geographical markets and on the best practices for addressing them, we are bolstering our publishing capabilities globally,” Kiryu stated at the beginning of 2024.

“We see this as an effective means not only to maximise our sales of new titles, but also to deliver our rich back catalogue to more customers and in turn to expand the fanbase for our group’s intellectual properties.”

In the context of all these Japan-only mobile games, repeated globalisation comments could be interpreted by some as lip service, especially following Squre Enix’s sale of Crystal Dynamics, Eidos and Square Enix Montréal in 2022.

Layoffs in the US and Europe this year don’t exactly inspire overseas optimism either.

But at the same time, it isn’t the case that no new mobile titles are launching outside of Japan. SaGa: Emerald Beyond and Dragon Quest Monsters: The Dark Prince saw international releases this year, in fact, and the aforementioned Final Fantasy XIV Mobile is due at some point in the future.

Still, those ambitions to “speak to the global market” and “produce hits” on mobile would go much more hand-in-hand if every title got the overseas treatment.

As for Emberstoria, perhaps it will go on to launch internationally, or perhaps it will remain a Japan exclusive as many Square mobile games do.

What’s more certain for now is that Square’s revenue is falling, Japanese players are spending less money on mobile RPGs, and a global mobile initiative is looking more important than ever.