‘Final Fantasy’ Maker Square Enix Confirms Layoffs as AI Takes Over Game Development

Square Enix, the gaming giant behind the Final Fantasy and Dragon Quest franchises, confirmed layoffs across its US and European divisions on Thursday – the same day the company said it is ramping up the use of generative AI to streamline game development.

“We are reorganizing our operations in North America and Europe to strengthen our development structure and drive a globally integrated marketing strategy,” a spokesperson said. IGN. “This was an extremely difficult decision, made after careful consideration and analysis by our leadership, to best position the group for long-term growth.”

In a presentation shared Thursday, the game publisher said it is shifting more development back to Japan, where Square Enix was founded. The company has been gradually downsizing after a period of global expansion, and in 2022 it sold three studios and a number of franchises – including Tomb Raider – to fuel the development of AI and blockchain gaming.

Square Enix has not confirmed how many people are affected by the layoffs, but a source said IGN that 137 jobs were “at risk” in the London office alone, with other cuts expected in the US.

In the presentation, Square Enix said it wants to use generative AI tools to “automate 70% of QA and debugging tasks in game development by the end of 2027.” The plan emerged from a joint initiative with the University of Tokyo’s Matsuo Laboratory to develop generative AI technologies for game creation.

In recent years, Square Enix has embraced cutting-edge technology, experimenting with NFTs and even introducing an NFT-powered Ethereum game called Symbiogenesis, which concluded after the final story chapter this summer.

In early 2024, Square Enix president Takashi Kiryu said the company would be “aggressive” in using generative AI to reimagine the game development process, citing potential productivity improvements. The company had previously released an AI-powered game demo and even used Midjourney to generate some art for its 2024 game, Foamstars.

Square Enix isn’t the only major gaming company betting big on AI; companies such as Ubisoft, Electronic Arts and Krafton are also taking important steps in that area. But they come at a time of turmoil for the games industry, with layoffs rocking studios big and small in recent years.

Declutter contacted Square Enix for comment.