3D Investment Partners, Square Enix’s third-largest investor with a 14% stake, is raising alarms about the company’s financial health. They say Square Enix is experiencing a “significant deterioration in earning power.” In a recent press statement, they highlighted a three-year trend of stagnation in revenue and profits, citing drops in operating income and return on equity.
The investment firm called for a thorough reevaluation of Square Enix’s management strategy to tap into the potential of its beloved intellectual properties and enhance corporate value. They even shared a detailed 100+ page report comparing Square Enix to other major Japanese game developers like Nintendo and Capcom, urging fellow investors to voice their concerns regarding management practices.
Since July 2024, 3D Investment Partners has been in talks with Square Enix’s leadership. In October 2025, they presented their findings to President Kiryu and Outside Director Abdullah, which included specific management issues and proposed solutions. However, President Kiryu’s response was minimal, not addressing key concerns raised by the firm.
In light of these tensions, Square Enix announced plans for a “fundamental restructuring.” This move will redirect resources from international development teams and put over 100 jobs at risk, raising questions about the company’s future direction.
Interestingly, the gaming industry is witnessing a surge in discussions around corporate accountability, especially as companies navigate the complexities of the digital market. According to a recent survey by the International Game Developers Association, 65% of developers have expressed concerns about their company’s management and strategic decisions. This highlights a growing trend where investors and employees alike seek more transparency and engagement in decision-making processes.
As the situation unfolds, it will be crucial to keep an eye on how Square Enix responds to these investor concerns. The outcome could serve as a lesson for other companies in the gaming sector about the importance of aligning management strategies with stakeholder expectations.
For more insights on corporate governance in the gaming industry, you can check out this Fortune article.
