Video Games and the Shaping of Industrial Transformation

Center on Japanese Economy and Business, Columbia Business School
Tuesday, February 21, 2012
Uris 301, Columbia Business School

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As you can see, during this period while the other game companies were partying, Square was out in the cold. With turnaround management, all it takes is a resolute person to turn things around. Discover what your company is strong at, concentrate on that strength, and stop everything that’s unnecessary.

At the same time, the market was not only growing but transforming. Thinking about how to respond to this transforming market, I opted for M&A as a quick-growth strategy. I merged Square and Enix in 2003, and Square Enix was born. You can thank me for that easy-to-say name. The results from that period are here.

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The light blue portion is the simple total of Square and Enix's operating income. The dark blue portion is the operating income after we became Square Enix. The profit range has shifted upward, and I think you can see synergy emerging. TAITO and UK-based Eidos are also our subsidiaries now. The most difficult part of M&A growth strategy comes post-merger. But as a group we work together incredibly well. Incidentally, with M&A, the role played by top executives is huge. No matter what, you can't let your vision get blurred, and you must respect individual cultures; in other words, be fair. If you can control these aspects well, your M&A strategy will also work.

If I had left the company here, I think I could have made some head hunters a killing. That said, I joined this industry after reading an article in 2000 about the merger of AOL and Time Warner. The industry’s transformation was the start of the story, and I could not have left the company there.

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