The studio opened in March 2013 with the intention to partner with Indian developers to create mobile games for the local market. The India studio did not release any games prior to its closure this week. All six of its employees have been laid off.
According to MCV India, the studio had been working with several Indian developers on a handful of projects that ultimately did not gain final approval from Square Enix's Japanese headquarters.
Former vice president of Square Enix India Atul Vibhandik confirmed with MCV India that the studio was closed, although he would offer no further comment. Additionally, there are rumors that Square Enix's similar studio endeavor in Latin America may also currently be on the chopping block.
In May 2012, the company held the Square Enix Game Development Contest India, through which it hoped to groom Indian game developers and bolster the local market. However, at the end of the contest the company ultimately decided not to formally publish and release any winning entries. At the time of the contest, Yasuhiro Fukushima — honorary chairman and now former head of the company's emerging markets division — said Square Enix's involvement in India would be a long term investment.
"We all know that India is going to be the next big market for games, but no one knows when that push will come," he said. "Smartphone and tablet sales are very strong in India, and it is the fastest growing platform for games around the world. So we want to work closely with Indian developers to make sure that when that big push does happen, there are quality Indian games available to audiences both in India and abroad."
Polygon has reached out to Square Enix for additional details.