Square Enix, the famous Japanese gaming company behind franchises like Dragon Quest and Final Fantasy, is the latest to announce layoffs affecting its Western divisions. Reports from IGN indicate significant job cuts in publishing teams located in the U.S. and the U.K., potentially impacting up to 137 employees in the U.K. alone.
The company is restructuring to focus more on games developed in Japan and reduce its publishing operations outside of the country. This move follows several years of downsizing its Western gaming presence, including the sale of studios like Crystal Dynamics (Tomb Raider) and IO Interactive (Hitman) to Embracer Group.
Even after selling those studios, Square Enix continued to publish Western-developed games, such as PowerWash Simulator and the Life is Strange series. However, the sequel to PowerWash Simulator will be self-published by its developer.
Square Enix confirmed to investors that these layoffs are part of a larger effort to streamline operations and cut costs, aiming for savings of over 3 billion Yen (approximately $20 million USD) by simplifying its organizational structure.
Square Enix is investing in generative AI for QA testing
Square Enix recently announced in a public report that it intends to integrate generative AI more deeply into how its games are made. The company aims to automate 70% of its quality testing processes by 2027, and is collaborating with researchers at the University of Tokyo to achieve this.
Square Enix isn’t the only game company exploring AI. Electronic Arts is also using AI tools, but a Business Insider report reveals that EA employees have encountered difficulties, including coding errors and unexpected AI-generated problems, that require fixing.
Square Enix’s multiplatform strategy continues
Square Enix recently announced it’s shifting its focus to release games on multiple platforms at the same time, reaching a wider audience. This is a change from their past practice of releasing titles like Final Fantasy 7 Remake initially as exclusives for PlayStation consoles.
In early 2024, they brought Final Fantasy 16 to Xbox Series X|S, and Final Fantasy 7 Remake is now scheduled to launch on Xbox Series X|S and Nintendo Switch 2 on January 22, 2026. Both Final Fantasy 16 and the Remake will support Xbox’s Play Anywhere feature, allowing players to purchase a single copy and play it on either Xbox consoles or Windows PCs.
Looking ahead, Square Enix plans to release the next installment, Final Fantasy 7 Rebirth, on both Xbox and Nintendo Switch, and the final game in the remake trilogy will also be a multiplatform release.
FAQ
Why is Square Enix laying off employees?
Square Enix is streamlining its business by combining some departments, like publishing, and reducing staff in the U.S. and U.K. This move allows the company to concentrate more on its work in Japan.
Why is Square Enix using AI for QA?
According to the company, artificial intelligence can make routine testing quicker, help find errors more efficiently, and lower expenses. However, they also acknowledge that people still need to supervise the process.
How many employees were affected?
Square Enix hasn’t revealed specific details, but it appears they’ve made substantial cuts to their quality assurance and support teams.
Does this mean AI is replacing human testers?
It’s not quite that simple. While Square Enix says AI testing helps their team, the recent job cuts have people worried that they’re using automation as an excuse to reduce staff.
How has the industry reacted?
As an analyst, I’ve been following the debate around AI in game testing. The main concern I hear from critics is that AI simply can’t match the subtle, contextual understanding a human tester brings to complicated gameplay – it struggles with nuanced judgment. However, proponents believe AI can really benefit the process by taking over the more monotonous, repetitive tasks, freeing up human testers to focus on the areas where they truly excel.
Is this part of a larger trend?
While many game companies are looking into using AI for quality assurance, Square Enix’s recent layoffs have brought the impact of automation on game development jobs into sharp focus.
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2025-11-07 00:42