Square Enix to close overseas studios and consolidate development in Japan

• Square Enix says the decision was made to support long-term growth.
• The company will reassess support roles and staffing across its global teams.
• Square Enix plans to automate up to 70% of QA and debugging by 2027 using generative AI.
• The publisher aims to improve development efficiency and strengthen its competitive position.

Square Enix has revealed plans to close its overseas studios and shift resources to consolidate game development primarily in Japan.

Although Square Enix did not disclose the exact number of staff that would be affected, IGN learned that the publisher is reportedly notifying staff in the US and UK of upcoming layoffs, with 137 jobs potentially at risk in the UK alone. 

“We are reorganising our operations in North America and Europe to strengthen our development structure and to drive a globally integrated marketing strategy," said Square Enix in a statement.

“This was an extremely difficult decision, made following careful consideration and analysis by our leadership, in order to best position the Group’s long-term growth. 

“We extend our heartfelt gratitude to the talented team members who will be departing the company for their significant contributions to Square Enix." 

Aside from closing overseas studios, the company also plans to reassess support roles and staffing both in Japan and abroad to optimise the group overall.

AI expansion 

Square Enix said it aims to use generative AI to automate around 70% of its QA and debugging processes in game development by the end of 2027, as part of a wider push to expand AI usage in Japan.

In an internal presentation, the company also reviewed its development pipeline to better use resources across the company and increase the value of its IP. 

“Through the use of automation technology, aim to improve the efficiency of QA operations and establish a competitive advantage in game development," said Square Enix. 

This follows a series of recent moves at the company including shutting down two more mobile titles in Japan, which both ended service on October 31st, 2025. 

At the same time, the firm has begun expanding its reach in new markets, making its first investment in Brazil through a partnership with digital games platform Nuuvem to launch browser-based platform Spawnd.