The Beginning of Square Enix in the Gaming Industry: How Dreams, Risk, and RPGs Shaped a Legend
Square Enix is one of the most respected names in video game history. Known for legendary franchises like Final Fantasy, Dragon Quest, and Kingdom Hearts, the company helped define role-playing games for generations of players. But Square Enix did not begin as the powerhouse it is today. Its origins are rooted in risk, near-failure, creative passion, and a belief that games could tell emotional, unforgettable stories.
To understand how Square Enix became a giant, we must go back to its beginnings—long before the merger, before global success, and before RPGs became mainstream.
Square’s Humble Origins: A Small Software Division
The story begins in the early 1980s with Masafumi Miyamoto, a Japanese entrepreneur who ran a construction and electrical power company called Den-Yu-Sha. Within this company existed a small software division focused on personal computer games. This division would eventually be spun off into a separate company called Square Co., Ltd. in 1986.
At the time, the video game industry was still evolving. Consoles like Nintendo’s Famicom (known internationally as the NES) were transforming gaming from arcade experiences into home entertainment. Square entered the industry as a relatively unknown developer, competing with larger, more established companies.
Early Square titles struggled to gain attention, and financially, the company was not doing well. Square faced the real possibility of shutting down.
Final Fantasy: A Name Born From Desperation
One of the most famous stories in gaming history comes from Square’s darkest moment.
In 1987, Square was on the brink of bankruptcy. Facing mounting losses, the company decided to create one final game. If it failed, Square would likely exit the gaming industry altogether.
The game was titled Final Fantasy—a name that reflected the team’s belief that this was their last chance.
Led by Hironobu Sakaguchi, the development team poured everything into the project. Inspired by Western RPGs like Ultima and Wizardry, Final Fantasy combined turn-based combat, rich storytelling, and a grand sense of adventure.
When the game was released for the Famicom, something unexpected happened.
It was a massive success.
From Survival to Stardom
Final Fantasy sold hundreds of thousands of copies in Japan, saving Square from collapse and instantly elevating the company’s status. More importantly, it proved that story-driven RPGs had a powerful future in the console market.
Square quickly began producing sequels, each pushing technical and narrative boundaries. Titles like Final Fantasy II, III, and IV introduced deeper characters, emotional storytelling, and evolving gameplay mechanics.
Square became known for innovation, ambition, and artistic expression—traits that separated it from many competitors.
Enix: The Other Half of the Legend
While Square was rising through Final Fantasy, another company was making its own mark in gaming: Enix.
Founded in 1975 by Yasuhiro Fukushima, Enix initially focused on publishing software and games rather than developing them in-house. In 1986, Enix published Dragon Quest, a role-playing game developed by Chunsoft.
Dragon Quest became a cultural phenomenon in Japan. Its accessible gameplay, charming art by Akira Toriyama, and memorable music helped introduce RPGs to a wide audience.
For years, Square and Enix were rivals—each dominating different sides of the RPG genre. Square was known for cinematic storytelling and innovation, while Enix excelled at consistency and mass appeal.
The Industry Changes—and So Did the Companies
As gaming entered the late 1990s and early 2000s, development costs skyrocketed. The transition to 3D graphics, voice acting, and cinematic presentation required massive investments and larger teams.
Square took major risks, most notably with Final Fantasy: The Spirits Within, a fully CGI film released in 2001. While visually impressive, the movie was a financial failure and placed Square in a difficult position.
At the same time, Enix was facing its own challenges in adapting to the rapidly changing industry.
Both companies recognized a shared reality: the future of gaming required strength, scale, and collaboration.
The Birth of Square Enix
In 2003, Square and Enix officially merged, forming Square Enix Holdings. The merger combined Square’s creative ambition with Enix’s publishing strength and financial stability.
This union marked the beginning of a new era.
Square Enix now held two of the most important RPG franchises in history—Final Fantasy and Dragon Quest—under one roof. Rather than diluting their identities, the merger allowed both series to grow stronger.
A Legacy Built on Story and Emotion
From its earliest days, Square Enix stood apart because it believed games could be more than entertainment. They could be emotional, cinematic, and deeply personal.
This philosophy shaped:
Epic narratives
Memorable characters
Iconic music
Emotional themes rarely explored in games at the time
Even today, Square Enix continues to push storytelling boundaries across consoles, PC, and mobile platforms.
Final Thoughts
The beginning of Square Enix in the gaming industry is a story of risk, resilience, and imagination. Square nearly failed. Enix took a different path to success. Together, they formed one of the most influential companies in video game history.
What began as a desperate “final” attempt turned into a legacy that continues to inspire developers and players around the world.
Square Enix didn’t just make games—it made memories.
