Square Enix CEO switches to a more cautious approach to generative AI use 

At Square Enix’s shareholders’ meeting held on June 21, CEO Takashi Kiryu made statements regarding the company’s stance on the use of generative AI technology in creative fields. Kiryu’s remarks suggest that he may be “changing course” to a more cautious and user-conscious approach on the matter, especially compared to some of his past statements. 

According to independent reporter michsuzuki, when asked by shareholders about Square Enix’s use of AI and related concerns over intellectual property infringement, Kiryu responded: “AI itself has tremendous potential. However, there are also many risks involved. We have introduced a flow whereby AI-related tools are used internally only after being properly examined.” Kiryu goes on to explain that Square Enix is proactively utilizing AI technology in fields unrelated to creativity to boost the efficiency of its operations. 

On the other hand, when it comes to the use of AI in creative fields, Kiryu comments that he is aware of the matter being “extremely delicate” and that he will stay in tune with public opinion going forward. While these statements do leave room for interpretation and are far from an explicit yes or no, they are a significant change from some of the CEO’s past remarks on the topic.  

In his New Year’s Letter from January 2024, Kiryu stated that Square Enix would be “aggressive in applying AI and other cutting-edge technologies to both our content development and our publishing functions.” He also opined that “generative AI has the potential not only to reshape what we create, but also to fundamentally change the processes by which we create, including programming.” 

In contrast, the CEO’s latest words suggest an outlook that is more concerned about not making the wrong decisions and upsetting audiences with generative AI. Square Enix’s Foamstars, which released in February this year, received significant backlash for the use of generative AI for some of its assets, especially outside of Japan. 

In the past fiscal year (April 2023 – March 2024) Square Enix saw their net profit decline by 70% to 14.9 billion yen. In order to overcome this situation, the company has announced various changes in policy, including focusing on multiplatform releases, in-house development and quality over quantity. Perhaps Kiryu’s cautious statement regarding generative AI is also indicative of a change in policy.