Final Fantasy: The Spirits Within is widely regarded as one of the riskiest gambles in Square’s history—one that nearly pushed the company to the brink of bankruptcy. The film was born out of Square’s immense confidence and ambition in computer-generated imagery, as the company sought to prove that fully CGI characters could reach a level of realism comparable to live-action actors and to use this breakthrough as a gateway into Hollywood filmmaking. However, the gap between vision and reality ultimately turned the project into a severe financial burden.

From a production standpoint, The Spirits Within was extraordinarily expensive, with a budget exceeding USD 90 million—comparable to that of a major live-action blockbuster at the time. Square built its own animation studio and invested heavily in manpower and time to refine character expressions, movement, and lighting in an attempt to overcome the so-called “uncanny valley.” Despite these efforts, the film’s release was met with a lukewarm response. Its worldwide box office gross was only around USD 85 million, failing to recoup even the production costs, let alone marketing and distribution expenses, and resulting in massive financial losses.

The problem was not merely the disappointing box office numbers, but also the disconnect between technological achievement and audience acceptance. While the film was a technical milestone, audiences at the time still felt emotionally distant from hyper-realistic CGI characters and struggled to connect with them. The movie’s tone leaned toward serious, philosophical, and hard science fiction, with a slow pacing that clashed with the more fantastical, adventurous, and emotionally driven image many people associated with Final Fantasy. As a result, neither general audiences nor core fans fully embraced it.

From a strategic perspective, Square placed too many of its resources and too much capital into a single project, leaving little room for risk diversification. When the film failed, the impact rippled through the entire company, even threatening the stability of its once-reliable game business. For many fans, the biggest disappointment was that although the movie carried the Final Fantasy name, it told an almost entirely standalone story with only a tenuous connection to the spirit of the game series, creating a sharp gap between expectations and reality.

The failure of The Spirits Within became a harsh wake-up call for Square and profoundly influenced the company’s future direction. Management came to realize that an excessive pursuit of cinematic ambitions and cutting-edge technology could undermine the company’s core strengths. In response, Square refocused its efforts on game development in later projects such as Final Fantasy X, placing greater emphasis on gameplay and storytelling. Not long after, the company merged with Enix, using resource consolidation to reduce financial risk and ensure more stable production.

To this day, Final Fantasy: The Spirits Within is frequently cited as one of the most notorious commercial failures in film history and serves as a cautionary tale for video game companies attempting to cross over into the film industry. It not only reshaped Square’s destiny, but also left a lasting impact on how the broader gaming industry views the risks of large-scale film adaptations.