Naavik Gaming Podcast Naavik Digest: Square Enix Refutes and Reframes
Jan 25, 2026
Analysis of SensorTower's State of Mobile 2026 and how AI is reshaping mobile engagement and monetization. A deep dive into Square Enix’s recent financial hits, consolidation moves, and cost-saving plans. Discussion of activist investor pressure and criticisms of large AAA development models. Exploration of near-term release gaps and strategic options like layoffs, AI adoption, or mobile reinvestment.
AI Snips
Chapters
Transcript
Episode notes
Quality Over Quantity Meets Reality
- Square Enix's medium-term plan emphasized 'quality over quantity' but faced rising skepticism as execution lagged.
- The company has structural issues linking ambitious AAA plans to declining recurring revenues and shrinking release cadence.
Mixed Results: Income Up, Sales Down
- H1-26 showed a modest operating income increase but a sharp net sales decline and a lowered full-year sales forecast.
- Square Enix attributes declines to a lack of tentpole releases and an extraordinary loss from US/UK consolidation.
Restructuring And Layoff Round
- Square Enix consolidated its US and UK publishing ops and announced about 100 layoffs as part of restructuring.
- The move followed earlier 2022 divestitures of Western studios to Embracer and drew criticism from multiple angles.