The Early Years
In September of 1983 Masafumi Miyamoto, a graduate of Waseda University in Tokyo, founded Square as an offshoot of the Den-Yu-Sha power line construction company which was owned by his father. The company was focused on computer technology and before they began making any games they were able to generate income by renting out their PC's for use by the local students.
It was in those embryonic years that two young programmers named Hironobu Sakaguchi and Hiromichi Tanaka were hired by Square, just as the company had begun to look into making games. Their first game was released for the PC in 1984 titled " The Death Trap", it flirted with some of the storytelling elements which would later become a company staple. The game was a success and was followed by a sequel, "Will: The Death Trap II", a year later. Square's first console game would come in that same year when they were responsible for the NES port of Thexder.
Independance and the First Final Fantasy
By the end of 1986, Square was able to leave Den-Yu-Sha to become a fully independent company officially titled "Square Co. Ltd". Many of the staff were brought on-board full time and Sakaguchi was made Director of Planning and Development. After developing a slew of titles for the NES within the space of a year, most of which garnering only modest success, the company was faced with the possibility of bankruptcy in 1987.
With only enough resources available to make one more game, Sakaguchi decided that his talents lay in being able to tell a compelling story and so he began assembling a team that would be able to rescue Square's future in the games industry. Final Fantasy brought together composer Nobuo Uematsu (with whom Sakaguchi had worked on several of Squares previous titles), artist Yoshitaka Amano (who inspired the look and characters in the game) and Sakaguchi's old friend Tanaka to design the game.
The success of Final Fantasy and its sequels would make it Square's main franchise and along with games such as Chrono Trigger, Secret of Mana, Xenogears, Parasite Eve and Vagrant Story cause many to regard them as the world's leader in RPG development.
The PlayStation Era and Beyond
By the mid-90s, the 32 and 64-bit systems had begun to arrive and Square began planning an epic 3d Final Fantasy to accompany the shift forward in technology. They disputed Nintendo's decision to stick with a cartridge based console which eventually caused them to end their long-term relationship with the company in favor of Sony Playstation's disc-based system in 1996. When Final Fantasy VII was released, it broke sales records and became the highest selling Final Fantasy to date, receiving universal critical acclaim.
Although primarely known for their RPGs during the PlayStation and into the PlayStation 2 era, the company began slowly branching into other genres. Tobal No 1 was Square's foray into fighting games, and it was followed by Bushido Blade (1997) and Bushido Blade 2 (1998). Still, Square's bread and butter was RPGs and they released some of their best known during this period. In addition to the Final Fantasy series, Square also released the fan-favorite Xenogears, garnering controversy due to some of the themes of the game. With the PlayStation 2, Square continued to focus on diversifying their output, releasing the racing game Driving Emotion Type S as well as the beat 'em up The Bouncer, both of which were poorly received by critics.
During this time, talks began between Square and long running RPG rival Enix over a merger between the two companies. Though the financial failures of Square's foray into film Final Fantasy: The Spirits Within caused Enix to delay the talks, the two companies joined to form Square Enix on April 1, 2003.