Wednesday, January 30, 2002

Last May, hopes were flying high for "Final Fantasy" as producers Chris Lee, left, and Jun Aida, right, flanked director Hironobu Sakaguchi at Square USA's office in Honolulu.

‘Fantasy’ movie
studio to close

Honolulu-based computer animation
pioneer Square USA will fold
in March, laying off 125

By Tim Ryan

"Final Fantasy" became Square USA's final nightmare, ultimately responsible for the impending closing of its $46 million Honolulu studio after five years here.

The promise of the game maker-turned-production company had been touted by Gov. Ben Cayetano and other state and county officials as the wished-for beginnings of a new industry base here.

Square USA's Honolulu studio instead will close March 31, sending its 125 employees, including Jun Aida, "Final Fantasy" executive producer and Hawaii studio president, to the unemployment line.

Though Sony's "Final Fantasy: The Spirit Within" featured the most lifelike animated characters ever produced, the film cost $145 million, generating only $32 million in ticket sales domestically, and $72 million worldwide.

Square may never make another film in Hollywood, sources said.

Aida on Monday told employees the studio was shutting down. The Harbor Court studio spent about $1.5 million monthly, and more than $90 million during its five-year tenure in Honolulu, sources said. About 30 percent of the workers here are from Japan, 12 percent are Hawaii residents and the rest from North America, Aida said.

High-tech layoffs

Employees laid off recently by some of Hawaii's major high-tech firms:

>> Square USA: 95, with 125 more expected in March with studio closure
>> Ohana Foundation: 120
>> WorldPoint Interactive: 65

Source: Star-Bulletin

Since September 2001, Aida and Square officials have been talking with major U.S. studios "to partner" with the Honolulu operation in managing the film production side of Square's business.

But the talks were unsuccessful for several reasons, Aida said: The Sept. 11 attacks caused a month's delay, followed by the Thanksgiving and Christmas holidays.

"This was the toughest period to be negotiating a major transaction," Aida told the Star-Bulletin. "We had some serious interests ... but our (deadline) worked against us.

"The state of the economy caused a lot of people to take a wait and see attitude."

Furthermore, parent company Tokyo-based Square Co. wanted an agreement reached "sooner than later," Aida said.

If a partner steps up before the March 31 deadline, the Hawaii studio still could be saved, Aida indicated.

Earlier this month, Square renegotiated its contract with the state for use of the new sound stage at the Hawaii Film Studio that allows the state to give the company 30-days' notice to allow another company use of the facility.

The "Man of War" production starring Bruce Willis wants to use the studio beginning in mid-March.

Aida said "Final Fantasy" could have produced more revenue if had not opened in July 2001, competing with several other major film premieres.

"Then I think our options would have been different," he said.

"Some day" the entertainment industry will view "Final Fantasy" as a significant technological advance, Aida said.

"For Hawaii we were a success story," he added. "I believe we put Honolulu on the map as far as CG (computer graphics) industries is concerned."

A Square subsidiary may use the "Final Fantasy" software in video games, and there are discussions with an unnamed mainland company to market at least part of the software package to the entertainment industry, Aida said.

While Aida has been searching for a partner, the Honolulu studio also has been secretly working on the Warner Bros. $150-million "Matrix" sequel, producing 10 minutes of computer graphic animation for the trailer. The Hawaii-produced segment will not be used in the actual film, Aida said.

State officials are "deeply saddened" by Square's announcement, said Donne Dawson, Hawaii film manager.

"We appreciate Square's immense contributions to the community, and revolutionary CG achievements for the industry," she said. "We hope that ... technology ... helps Hawaii attract other business.

"Several Hawaii residents have had an incredible opportunity to work for this company, gain experience and stay at home."

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