Under Fire Square Enix Major Shareholder Demands Change After Sluggish Performance
Square Enix, a major RPG giant denomination in a fantasy world, is also behind the most famous franchises Final Fantasy, Dragon Quest, and Kingdom Hearts. But it was not good at all behind the curtain. There was a ruckus that led to war between the company's managers and one of its top owners. The reality is that there are some very ugly things about our favorite publisher's current health.
At present, an open letter and presentation have been released, narrating in detail the dissatisfaction and demands for a complete overhaul by 3D Investment Partners (3DIP), a Singapore fund that possesses an enormous 14.3% of Square Enix.
The Leak A 100-Slide Reality Check
Those polite handshakes are only for corporate meetings. Corporations go public like this on one occasion. 3DIP has released a presentation (over 100 slides) that essentially roasts the current leadership under CEO Takashi Kiryu.
The core argument That Square Enix's enormous operating cost for the game isn't high enough for the low demand from consumers. While competitors like Capcom (Resident Evil) and SEGA have skyrocketed with profits, Square Enix lags sorely.
"Despite its status as a "national" company... SQEX HD is the only company in its industry to record negative growth." --- 3D Investment Partners Presentation
Why Are Investors Upset The Numbers Don't Lie
Jargon thrown aside the investors have put to the side three of what they call "red flags" every stockholder and gamer should be worried about
- Negative Growth Over the last three years (FY2022-2025), revenue growth declined for Square Enix by 4%. In a nutshell, you're dying outside of growth in games.
- Low Profit Margins Operating margin for the company is cakling at 13%. Compare this to peers (i.e. Bandai Namco or Konami), which lie on average around 28%. In essence then, Square Enix is worked almost double to retain only about half.
- Wasted Money (Impairment Losses) There is a staggering ¥22 billion noted on the report as an impairment loss. In gamer terms, this refers to money wasted in canceled games or ones that needed to be wrote off their value because they flopped so hard that there was just no rescue anymore.
Using Gamer Reviews as Evidence
This is where it gets exciting to us, however 3DIP invoked gamer reviews in its presentation.
They cited poor or mixed reactions to recent titles the performance of FF XVI, the remake of Dragon Quest III, and the disastrous flop of Babylon's Fall by way of evidence that management has been out of touch. They argue that it is failing to meet the financial bottom line but accounts for the customers as well.
Another Major Point of Dispute The Conglomerate Discount
Square Enix's other counting portfolio interests include the large arcade business (Taito) and manga publishing.
The investors call this "Conglomerate Discount." They claim that arcade centers and book publishing have nothing to do with making high-end video games. Obviously, the suggestion is to dispose of non-game-businesses and keep in entirely on winning great video games.
What Next
This year it launched an initiative called "Reboots" which includes the utilization of AI and the restructuring of development teams. In November 2025, the firm also retrenched employees in its offices in America and Europe, but this wasn't enough for 3D Investment Partners.
They want other shareholders to vent their anger and join the shareholders to make the Board of Directors come up with a real plan. For us gamers, this likely means
- More emphasis on building big-budget AAA titles (instead of the quantity, quality).
- Selling off smaller, riskier divisions.
- Change in leadership if Takashi Kiryu fails.
What Do You Think
By now, do you think Square Enix has lost its way Should the investor stop with the misshapen side businesses and simply make better games Share your opinions in the comments below.
This Article was based on the financial disclosure and press releases up to December 10, 2025, from 3D Investment Partners relative to Square Enix Holdings Co. Ltd.
