Square Enix’s major shareholder drops 100-page presentation criticizing how the company is managed, rallies other shareholders

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3D Investment Partners, a Singapore-based activist investment fund, has published a 100-page presentation highlighting issues in Square Enix's management (as reported by BusinessWire). As a major shareholder of the game company (owning a 14.36% stake), 3D Investment is calling on other shareholders to join them in "sharing frank opinions" on Square Enix's ongoing issues. Their purpose is to "pursue constructive dialogue" with the company's leadership.

Given that 3D Investment Partners is known for being an "activist" investor (an investor who seeks to buy significant stakes in companies in order to influence how they are managed, often targeting underperforming or poorly managed companies), people have been curious about what moves they'll make on Square Enix ever since they first started acquiring shares in April this year. At the time, 3D Investment said its purpose was "pure investment, and depending on circumstances, to offer advice or make significant proposals to management." Now, it seems they've finally decided to make bolder moves towards influencing the company's operations.

In the new announcement, the fund argues that despite being a national brand who owns world-class franchises like Final Fantasy and Dragon Quest, Square Enix has been facing stagnant revenue growth and weak profit margins over the past three years, especially compared to peers like Nintendo, Capcom, Bandai Namco and Konami.

3D Investment blames this on the underperformance of Square Enix's console and mobile game sectors, as well as exceptionally large write-downs related to cancelled games. Interestingly, they also consider the company's arcade and publishing sectors to be "non-synergistic" businesses that are ultimately pulling down the company's value with lackluster performance.

Although Square Enix's plan is to "Reboot" with its new mid-term strategy for fiscal years 2025 through 2027, 3D Investment implies this plan is insufficient and too vague. Some of the issues cited are a lack of a concrete vision for long-term recovery, low-balled improvement margins, and a lack of concrete execution plans or KPIs for measures meant to address the company's problems.

It seems that 3D Investment already approached Square Enix's CEO Takashi Kiryu with an analysis of these problems and proposal for improvements back in October 2025, but was not satisfied with the response (allegedly, they only got a brief email that insisted the current plan was adequate). As a result, they've turned to making things public and getting other shareholders on board, which is a common method activists use to lobby for their initiatives.

That's not to say that Square Enix is obligated to listen. For example, Japanese mobile game giant GungHo has been facing similar pressure from activist investors, with major shareholder Strategic Capital repeatedly asking for the company to fire its CEO through scalding public announcements. On the other hand, GungHo has persistently rejected such proposals. How Square Enix's responds to 3D Investment Partners' initiatives remains to be seen.

 
it's a weird slide deck tbh, they compare any releases to MH game to show sales disparity. Which let's be fair, most games are gonna struggle to match whether it's Square Enix or whoever else. Then they pick random negative remarks about games to show their poor quality? I know FF16 has its fair share of haters on here but one of the comments is saying the music is bad 😂 like come on mannnnnn. It reads like an investment group that has no idea about the product, if they want to point fingers at revenue and write off due to cancellations that's all fair but they know f all about game quality.
 
it's a weird slide deck tbh, they compare any releases to MH game to show sales disparity. Which let's be fair, most games are gonna struggle to match whether it's Square Enix or whoever else. Then they pick random negative remarks about games to show their poor quality? I know FF16 has its fair share of haters on here but one of the comments is saying the music is bad 😂 like come on mannnnnn. It reads like an investment group that has no idea about the product, if they want to point fingers at revenue and write off due to cancellations that's all fair but they know f all about game quality.
The Metacritic reviews thing is retarded, but there are a ton of kill shots in this presentation. Like this reads almost like a short seller's report, and it's coming from an investor with %10 stake (which is massive in publicly traded terms).

The Monster Hunter comparison is more than apt given how much of a lead Square's IP had over MonHun in terms of brand awareness overseas.
 
Just go back to 2D and spend less time developing graphics, and more time developing interesting stories, addictive gameplay mechanics, and deep combat systems. Indie developers are shitting on AAA companies right now because gamers are growing tired of the shallow UE5 slop.

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Braindead investors. Cherry picking the worst statements they can find on a game that got 91% steam reviews. People love the DQ3 remake lol.

Not only that, every quote here is taken from the same metacritic user review. So they were very thorough and representative. Lmao. They took one 0 review from metacritic and just pulled the worst quotes, clowns.

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A user that gave Dragon Age Veilguard a 10 btw.
 
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Just go back to 2D and spend less time developing graphics, and more time developing interesting stories, addictive gameplay mechanics, and deep combat systems. Indie developers are shitting on AAA companies right now because gamers are growing tired of the shallow UE5 slop.

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To be fair, Square was always a graphic powerhouse.
 
The only way I can imagine Square Enix doing worst that how is already doing now is letting a shareholder that knows absolutely nothing about games and gamers have a decision role in how the company is managed.
 
A lot of cherry picking to drive agenda
SE SD (mobile) business is dying and it's not like SE can do a lot with it - see Yoshida comment about Japan be non-competive in this market (Chinese just bigger and better)
HD is flat
MMO is fine

The Monster Hunter comparison is more than apt given how much of a lead Square's IP had over MonHun in terms of brand awareness overseas.
It's weird how they highlight success of MHW over MHX just to shows that consequent titles performed significantly worse twice in the row, dropping back to almost MHX levels.
MH franchise doesn't fare any better than FF franchise
 
Square Enix have been riding nostalgia's coattails since they stopped being Squaresoft. Imo any other company would've gone bankrupt long ago with the number of commercial blunders they've had.
 
SE SD (mobile) business is dying and it's not like SE can do a lot with it - see Yoshida comment about Japan be non-competive in this market (Chinese just bigger and better)
The big issue posed here is "Why?", why is SE incapable of making new hits in the category when its rivals clearly can under the same market conditions?

Kiryu has not really improved much in his tenure so far and this seems targeted at him specifically.

HD is flat
Also not good when your rivals are doing far better than you in the same market. Fucking Konami is outdoing them, believe it or not!

The writeoffs are eye-watering too.

MMO is fine
Rn this is the category that's keeping them afloat.

It's weird how they highlight success of MHW over MHX just to shows that consequent titles performed significantly worse twice in the row, dropping back to almost MHX levels.
MH franchise doesn't fare any better than FF franchise
MHW and MH Rise have multiple years of catalog sales behind them, the chart was only inclusive of data up to May 2025 iirc.

Square Enix have been riding nostalgia's coattails since they stopped being Squaresoft. Imo any other company would've gone bankrupt long ago with the number of commercial blunders they've had.
They're the Japanese Ubisoft.
 
On one hand I love when Square Enix' management is getting shit (they deserve it). On the other hand, I don't trust investment companies with their criticism on content creation companies whatsoever. It's like asking the retards at Blackrock what they would do with Nintendo.
 
As a FF series fanatic and evangelist(i even loved and bought at launch ff15)- ff16 was big letdown(yes i completed it and bot of its expack, but again, im FF fanatic, not even ur normal FF series fan), even with my incredible bias i can only give it 8/10 with its crazy amount of huge flaws, and when im talking 8/10 think of it like 8/10 from woke reviewer who calls DA:V "back to form" in their sellout article ;)
 
The big issue posed here is "Why?", why is SE incapable of making new hits in the category when its rivals clearly can under the same market conditions?
Sega stagnating, Konami practically pulled out, Nintendo left for quite some time already. CyGames is strong but it always had much stronger slate than classic gaming houses.
Oldschool mobile-only games are under pressure, even popular niche games like NIKKE and Blue Archive find it difficult to hold ground.

He's probably talking about quality.
How does "quality" (a questionable and subjective take) will help SE with financials?
 
The big issue posed here is "Why?", why is SE incapable of making new hits in the category when its rivals clearly can under the same market conditions?
Tbf, the Japanese mobile game market is very competitive and out of all the JP publishers, the only ones putting out successful mobile games in the past 4 - 5 years have been Cygames (Umamusume: Pretty Derby) and Bandai Namco (SD Gundam G Generation ETERNAL and Gakuen Idolmaster).

The rest of the popular mobile games in JP are either older titles like FGO (Aniplex/Sony/Type Moon), Monster Strike (XFLAG), Puzzle & Dragons (GungHo Online) and Granblue Fantasy (Cygames) or overseas games like HSR, Nikke, Blue Archive, Arknights, etc.

Edit: I forgot about Pokémon TCG Pocket. That one's also a recent, very successful mobile title in JP.
 
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Tbf, the Japanese mobile game market is very competitive and out of all the JP publishers, the only ones putting out successful mobile games in the past 4 - 5 years have been Cygames (Umamusume: Pretty Derby) and Bandai Namco (SD Gundam G Generation ETERNAL and Gakuen Idolmaster).

The rest of the popular mobile games in JP are either older titles like FGO (Aniplex/Sony/Type Moon), Monster Strike (XFLAG), Puzzle & Dragons (GungHo Online) and Granblue Fantasy (Cygames) or overseas games like HSR, Nikke, Blue Archive, Arknights, etc.

Edit: I forgot about Pokémon TCG Pocket. That one's also a recent, very successful mobile title in JP.
The overreliance on the JP market is another problem this report correctly calls out. Other publishers are far less reliant on JP sales than Square is.

Hell, I discovered through this report that Konami runs its own mobile stores for mobile games! They pay like %40 in platform fees than Square!

Sega stagnating, Konami practically pulled out, Nintendo left for quite some time already. CyGames is strong but it always had much stronger slate than classic gaming houses.
Oldschool mobile-only games are under pressure, even popular niche games like NIKKE and Blue Archive find it difficult to hold ground.
And yet all of those guys are outdoing Square in a lot of ways. Both in the HD and SD games categories.

The report compares operating margin between Square and the rest, and tbh the difference is eye-watering.
 
How does "quality" (a questionable and subjective take) will help SE with financials?

No way this is a legit question. Quality is questionable? Quality always improves financials. Your picture is retarded because most indies and AA are not behind famous IP's such as what SE owns, so ofc most will rush to buy the next cod or the next fifa, however said famous IP's can also be good and get the same or more sales.
 
, why is SE incapable of making new hits


Talent is the answer. Lack of, in this case. This is not rocket science. SE has become the eastern Ubisoft and is unable to move forward.

You just need to look at the state of mismanagement of Yoko Taro's gang and the Nierverse. That Drakengard and Nier have not taken over as main franchises speak by itself. The lack of vision at managerial level and the lack of creative talent (for too long playing politics) have condemned them.

They need a hard reset, assemble new fresh creative teams, promote Yoko Taro to whatever he fancies and starting up new exciting stuff. They are on FFVII nostalgia and DQ life support and that's not nearly enough.
 
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The overreliance on the JP market is another problem this report correctly calls out. Other publishers are far less reliant on JP sales than Square is.
The only mobile JP publisher that isn't as reliant on domestic sales is Nintendo, for obvious reasons (Pokemon is the biggest IP in the world). The rest of the JP publishers I mentioned in my previous reply make most of their revenue from the domestic market, with the one exception being Cygames, since Uma Musume exploded in popularity in the west when it released earlier this year. Even so, half of Uma Musume's revenue still comes from Japan.
 
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it's a weird slide deck tbh, they compare any releases to MH game to show sales disparity. Which let's be fair, most games are gonna struggle to match whether it's Square Enix or whoever else. Then they pick random negative remarks about games to show their poor quality? I know FF16 has its fair share of haters on here but one of the comments is saying the music is bad 😂 like come on mannnnnn. It reads like an investment group that has no idea about the product, if they want to point fingers at revenue and write off due to cancellations that's all fair but they know f all about game quality.
FF16 has the worst music of all FF post 7. It's basically hours of minimalistic cinematographic trash.
Adding chorus to bad music doesn't make it good music.
 
As a FF series fanatic and evangelist(i even loved and bought at launch ff15)- ff16 was big letdown(yes i completed it and bot of its expack, but again, im FF fanatic, not even ur normal FF series fan), even with my incredible bias i can only give it 8/10 with its crazy amount of huge flaws, and when im talking 8/10 think of it like 8/10 from woke reviewer who calls DA:V "back to form" in their sellout article ;)
Is Clive worth the dickriding he gets from the fandom? Whenever i hear about the game he's all i heear about.
 
Is Clive worth the dickriding he gets from the fandom? Whenever i hear about the game he's all i heear about.
He is solid most of the time, altho ofc he has some unrealistic story/behaviour thats very weird/opposite to human nature that i dont wanna spoil(maybe in 5 years i would once game is considered old :P ), but that stuff would never happen irl, game has so many other flaws tho u really gotta be crazy FF fan to look past them and enjoy the game, which i still did but had many immersion breaking/getting annoyed af moments we didnt get in previous mainline FF games(or at least i didnt).

To name few major flaws of the game: crazy amount( at kojima-san lvl)of skipable and even unskipable cutscenes, it directly affects gameplay if u for example die to a boss and gotta reply whole sequence.
Really bad fighting and equipment system, much worse than even old af by now ff12.
Some very unrealistic story moments/weird behaviour of main character.
 
The overreliance on the JP market is another problem this report correctly calls out. Other publishers are far less reliant on JP sales than Square is.
The biggest markets for gacha games are Japan and China and China obviously even harder take for JP publishers.

And yet all of those guys are outdoing Square in a lot of ways. Both in the HD and SD games categories.
"Conviniently" report omit comparison in SD games with peers. Just generals words about saturation of market for SE published SD games.
These guys knew how to present data to paint very bad outlook. Not as it's good, I myself have a lot of question to SE, luckily I am not shareholder. But this stuff is intentional attack on management.

No way this is a legit question. Quality is questionable? Quality always improves financials. Your picture is retarded because most indies and AA are not behind famous IP's such as what SE owns, so ofc most will rush to buy the next cod or the next fifa, however said famous IP's can also be good and get the same or more sales.
This picture is an average across all games released in 2021-2024, not just SE ones.
And quality is subjective - my perception of it clearly different as I don't treat indies/AA games as quality.
The typical indie/AA game are shit across the board - from graphics to gamedesign/story/direction/animations/game mechanics/sound design etc. Good ones get right one or several parts, but the rest will remain shit, they just don't have budget to cover everything. And it's fine for some players who can ignore bad parts over good ones they want to indulge in, but it's clearly not for all, and rift in sales clearly shows it.
For example I think pixelart is pure trash and generally detest simple/outdated graphics. Games without proper story or without proper math-based game mechanics are no go - so story-only, arcade or gameplay only games are out. And each person has its own standards and for many indies/AA is a miss.

Simply put a particular indie/AA games doesn't not have enough qualities to be a quality game for most players and it shows in sales where only good/perfect match (your likings are the game strong points) lead to sales, making it niche and heavily reduce sales potential.
 
This picture is an average across all games released in 2021-2024, not just SE ones.
And quality is subjective - my perception of it clearly different as I don't treat indies/AA games as quality.
The typical indie/AA game are shit across the board - from graphics to gamedesign/story/direction/animations/game mechanics/sound design etc. Good ones get right one or several parts, but the rest will remain shit, they just don't have budget to cover everything. And it's fine for some players who can ignore bad parts over good ones they want to indulge in, but it's clearly not for all, and rift in sales clearly shows it.
For example I think pixelart is pure trash and generally detest simple/outdated graphics. Games without proper story or without proper math-based game mechanics are no go - so story-only, arcade or gameplay only games are out. And each person has its own standards and for many indies/AA is a miss.

Simply put a particular indie/AA games doesn't not have enough qualities to be a quality game for most players and it shows in sales where only good/perfect match (your likings are the game strong points) lead to sales, making it niche and heavily reduce sales potential.

Nothing is universally good. You missed his point, which is that AA and indies have increased significantly recently and offer more quality for your bucks than your typical famous IP. Ofc there are shit aa's and indies, no one said otherwise, however there is no denying that the winds are starting to blow in their favor slowly but surely. AAA does not mean the game has high production values, at least no as much as it used to these days. AAA in fact is just a lot of money being laundered into CEO's pockets hidden as "game budget", while they fire people. Indies and AA have enough qualities these days to overcome AAA. Clair Obscur, BG3, Hades 2, Silksong, KCD2, Dispatch, etc. all prove you wrong.
 
it's a weird slide deck tbh, they compare any releases to MH game to show sales disparity. Which let's be fair, most games are gonna struggle to match whether it's Square Enix or whoever else. Then they pick random negative remarks about games to show their poor quality? I know FF16 has its fair share of haters on here but one of the comments is saying the music is bad 😂 like come on mannnnnn. It reads like an investment group that has no idea about the product, if they want to point fingers at revenue and write off due to cancellations that's all fair but they know f all about game quality.
They are an "activist investment fund" so all they are tying to do is get someone on the board, cut costs (ie get people fired), maybe load the company up with some debt for "structural improvements", pump up the stock, dump and run.
 
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Braindead investors. Cherry picking the worst statements they can find on a game that got 91% steam reviews. People love the DQ3 remake lol.

Not only that, every quote here is taken from the same metacritic user review. So they were very thorough and representative. Lmao. They took one 0 review from metacritic and just pulled the worst quotes, clowns.

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A user that gave Dragon Age Veilguard a 10 btw.
I agree that Square plays way too safe; but yeah, this is some bullshit

The investors really want Square to move, but this isn't the way
 
They are an "activist investment fund" so all they are tying to do is get someone on the board, cut costs (ie get people fired), maybe load the company up with some debt for "structural improvements", pump up the stock, dump and run.
This.

They are fucking poison.

They are not interested in the long-term growth and health of the company; they are only interested in short-term growth so they can turn a profit, dump their stocks, and move on to the next victim.

No one here should be agreeing with 3D Investment Partners, because while they may bring up some decent points about SE, their "solutions" will be the exact opposite of what most gamers want.
 
activist investment fund
Be very careful with data and agenda provided by those lads.

'Activist investor' once suggested Sony to sell-off games and electonics because he saw movies and music as more profitable. Usually 'activist investment fund' is type of people who are trying to either short a company, or spun-off the more profitable parts to strangle the company into M&A and short stock on the news later.
 
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They're citing FFX's voice acting as SE being at the "forefront of game development" which tells me they didn't actually play the game.
 
it's a weird slide deck tbh, they compare any releases to MH game to show sales disparity. Which let's be fair, most games are gonna struggle to match whether it's Square Enix or whoever else.
If we were back in the PS2 era, the idea that SQEX can't compete with Monster Hunter would be seen as completely laughable.
 
What could the budget have possibly been for DQ3 HD?

What percentage of the companies annual value does that budget represent? 0%?

This is like pitching an supermarket redesign over the location of the instant tea.
 
From June 2023 until now, what has Takashi Kiryu actually done that had any real impact at Square, besides mass layoffs and promising heavy use of AI?
I feel like that investor group has an agenda against the guy, but honestly he doesn't help himself either. The previous management also made bad decisions, giving up Tomb Raider was one of the worst, so they've been in self-destruction mode for a few years now.

Square needs a resurrection like the one Capcom went through
 
The Metacritic reviews thing is retarded, but there are a ton of kill shots in this presentation. Like this reads almost like a short seller's report, and it's coming from an investor with %10 stake (which is massive in publicly traded terms).

The Monster Hunter comparison is more than apt given how much of a lead Square's IP had over MonHun in terms of brand awareness overseas.
Yeah I think it's a valid question. Why in the hell doesn't S-E have anything of the same magnitude as Monster Hunter? Or Elden Ring? Or even Clair Obscur? It's like everyone else is beating S-E at their own game.

S-E is a massive company with several studios and some of the biggest IP in gaming, yet all they manage to do is appeal to the same ~5 million nostalgic middle-aged audience.
 
Yeah I think it's a valid question. Why in the hell doesn't S-E have anything of the same magnitude as Monster Hunter? Or Elden Ring? Or even Clair Obscur? It's like everyone else is beating S-E at their own game.

S-E is a massive company with several studios and some of the biggest IP in gaming, yet all they manage to do is appeal to the same ~5 million nostalgic middle-aged audience.
The fact that Genshin Impact and Honkai Star Rail continue to rake in the cash with 0 from Square is abysmal on its own.

Both titles are very heavily horning in on Square's bread and butter games!
 
Metacritic user reviews as citations?

Come the fuck on, lol. Square is terribly managed, sure, but that is just a ridiculous thing to bring up from the "shareholders", lol.
 
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Nothing is universally good. You missed his point, which is that AA and indies have increased significantly recently and offer more quality for your bucks than your typical famous IP. Ofc there are shit aa's and indies, no one said otherwise, however there is no denying that the winds are starting to blow in their favor slowly but surely. AAA does not mean the game has high production values, at least no as much as it used to these days. AAA in fact is just a lot of money being laundered into CEO's pockets hidden as "game budget", while they fire people. Indies and AA have enough qualities these days to overcome AAA. Clair Obscur, BG3, Hades 2, Silksong, KCD2, Dispatch, etc. all prove you wrong.
You have to sentences that can't be true in current reality simultaneously - "Quality always improves financials" and "AA and indies have increased significantly recently and offer more quality for your bucks than your typical famous IP".
Because current state of indie/AA is that they in no way can increase financials with their level of sales, no matter how you perceive their "quality" .
It's either they aren't really quality or quality itself is not enough to drive sales and improve financial metrics.

Btw - BG3 is not AA and for each game you listed there is tons and tons of trash in AA and especially in indies (and even though games aren't exactly lit world on fire). And good games are rare. Even GaaS produce more games of quality than AA/indie space.
 
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Wait, hold up. So shareholders, the same niggas whose short-term demands lead to corporate identity crisis, are now clutching balls and asking, why is this company run so poorly?

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You have to sentences that can't be true in current reality simultaneously - "Quality always improves financials" and "AA and indies have increased significantly recently and offer more quality for your bucks than your typical famous IP".
Because current state of indie/AA is that they in no way can increase financials with their level of sales, no matter how you perceive their "quality" .
It's either they aren't really quality or quality itself is not enough to drive sales and improve financial metrics.

Btw - BG3 is not AA and for each game you listed there is tons and tons of trash in AA and especially in indies (and even though games aren't exactly lit world on fire). And good games are rare. Even GaaS produce more games of quality than AA/indie space.

Completely wrong. Also Larian is an AA studio, not triple A.
 
1. Create new IP's.

2. Sprinkle in some cheap-ish remasters (Parasite Eve, Vagrant Story, Brave Fencer Mushashi, Xenogears)

3. Make a few HD-2D remakes (Chrono Trigger, Breath of Fire)

4. Have a full-fledged FF sequel that doesn't suck.

5. DON"T rely on GAAS.

Fortnite has poisoned shareholders expecting a constant influx of $$$$$$ instead of just making a good game.
 
5. DON"T rely on GAAS.

Fortnite has poisoned shareholders expecting a constant influx of $$$$$$ instead of just making a good game.
They would be long gone if they didn't
They very one of the first, long before Fortnite became a thing, who recognized importance of gaas for having strong foundation of constant stream of money that carry them even if they do practically everything else wrong.
 
I think Square's biggest issue is that they constantly overestimate what their products will sell and so they then say everything under performed. They need a better understanding of their market and what their product will sell though. I would like them get FF back to some sort of turn based ideas, I will even take FF12 style Gambit system. I haven't played a mainline FF and enjoyed it since FF12. Started 13 and quit, did not try FF15 and 16. Never playing online.

I would even be ok with the FF7Remake combat system with modern FF story. You could make FF more SCI fi and go to various planets or something.
 
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