Final Fantasy was made to answer Dragon Quest, then the two rivals merged
In 1987 a struggling Tokyo developer called Square built a role-playing game to cash in on the success of Enix's Dragon Quest. It named the game Final Fantasy, and it sold over 400,000 copies. Sixteen years later the two bitter competitors joined forces as Square Enix, owners of both series.
Enix started on September 22, 1975, founded by Yasuhiro Fukushima, an architect turned entrepreneur. It mostly published other studios' games, and with developer Chunsoft it released the first Dragon Quest in 1986, with art by Akira Toriyama; it eventually sold 1.5 million copies in Japan. Square began in October 1983 as a software division of a power-line construction firm owned by founder Masafumi Miyamoto's father. At a time when one programmer often built a whole game, Miyamoto believed designers, coders and professional writers should work together.
Final Fantasy rescued Square after several flops and launched a long string of hits, including Chrono, Mana and Kingdom Hearts, made with Disney. Choosing Sony's cheaper CD-based PlayStation over the Nintendo 64 paid off when Final Fantasy VII sold 9.8 million copies. Then came a costly misstep: the 2001 film Final Fantasy: The Spirits Within flopped, Square suffered record losses, and Sony bought an 18.6% stake. Enix, which had been discussing a merger since at least 2000, grew wary.
Recovery on the back of Final Fantasy X and Kingdom Hearts revived the plan. Miyamoto objected that his stake would shrink, so the exchange ratio was sweetened from 0.81 to 0.85 Enix shares per Square share, and the merger took effect on April 1, 2003. Enix was the legal survivor, though 80% of the combined staff came from Square. One analyst doubted the synergies, noting that Enix outsourced development while Square did everything in-house.
The new group kept buying: Taito, maker of Space Invaders, in 2005, and in 2009 Eidos, owner of Tomb Raider and Hitman. Weak Western sales forced a restructuring in 2013 and the president's resignation. Today its three flagship series have together sold hundreds of millions of copies.
Source: Square Enix
