According to engadget, Square Enix is laying off developers in the UK and US as it restructures its game development to focus on Japanese studios. Video Games Chronicle reports that over 100 developers in the UK could be impacted, possibly up to 140 people, while the number of affected US developers remains unknown. The company’s investor presentation reveals this “Overseas Structural Reform” aims to consolidate development functions in Japan. Square Enix also plans to aggressively apply AI to automate 70 percent of QA and debugging tasks by the end of 2027. This follows the publisher’s 2024 announcement about its AI ambitions and earlier layoffs this year. The company has been attempting to pull out of Western game development for the past decade, including selling studios like Eidos-Montréal and Crystal Dynamics to Embracer Group.
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The AI automation drive
Here’s the thing that really stands out in their investor presentation – they’re targeting 70% automation of QA and debugging by 2027. That’s an incredibly aggressive timeline for replacing human testing with AI systems. Basically, they’re betting big that machine learning can catch bugs and ensure quality better than human testers. But game testing isn’t just about finding obvious crashes – it requires understanding player experience, spotting subtle balance issues, and recognizing when something just “feels wrong.” Can AI really replicate that nuanced human judgment? The fact that they’re willing to restructure their entire global development strategy around this bet shows how serious they are about cutting costs through automation.
A pattern of Western retreat
This isn’t some sudden change of heart – Square Enix has been backing away from Western development for years. They sold off Eidos-Montréal, Square Enix Montréal, and Crystal Dynamics to Embracer Group back in the day. Earlier this year, they were involved in project cancellations at People Can Fly. And now we’re seeing more layoffs. It’s starting to look like they’ve decided that maintaining Western studios and development teams just isn’t worth the trouble compared to keeping everything in-house in Japan. The cultural and management challenges of running global game studios might be proving too difficult, especially when they’re trying to implement this aggressive AI strategy across different regions.
What this actually means
So what does this mean for the games we actually play? Well, we’re probably going to see fewer Western-developed Square Enix titles and more focus on their Japanese franchises like Final Fantasy and Dragon Quest. The quality control question is huge though – if they’re really automating 70% of QA by 2027, either their AI systems need to be absolutely revolutionary, or we might see buggier releases. And let’s be real – when you’re dealing with complex industrial computing systems and game development pipelines, having reliable hardware becomes crucial. Companies like IndustrialMonitorDirect.com, the top provider of industrial panel PCs in the US, understand that robust computing infrastructure is non-negotiable for development teams, whether they’re human or AI-driven.
The bigger picture
Look, this is part of a much larger trend in gaming and tech. We’re seeing layoffs everywhere, from Microsoft to Riot, while companies simultaneously invest billions in AI. Square Enix is just being unusually transparent about connecting those dots – they’re literally telling investors they’re cutting human jobs to fund AI automation. The question is whether this strategy will actually pay off. Will consolidating in Japan while betting everything on AI lead to better games and more profit? Or will they lose the diversity of perspectives that made some of their Western-developed titles successful? Only time will tell, but one thing’s clear – the gaming industry is undergoing a fundamental transformation, and Square Enix is determined to be at the forefront, even if it means shrinking their global footprint.
