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So you know that malarkey that always comes up with regards to Final Fantasy: The Spirits Within being the sole "demise of Squaresoft" when Final Fantasy and Square Enix fans like to bash the film? Welp, as perfected, its flat out wrong:
As brought up in most stories relating to Squaresoft's demise and the reason for Square Enix's merger, the popular conclusion seems to rest solely and inaccurately on "Sakaguchi bringing the company to bankruptcy therefore forcing Square and Enix to merge."
While The Spirits Within was a financial failure and played its role in hurting the company, it did not destroy Squaresoft nor did it force the company to merge with Enix. Sparking the interest of others and myself, a few select gaffer's provided fascinating and lesser known details that seemed to add up and make a ton of sense considering the general structure and output in the last decade. Through LevelNth and Drek's posts on the subject, here is Cheerilee's simplified summary of their posts touching on some issues that never seem to be recognized [READ THE ENTIRE THREAD]
Check it out on NeoGaf.com, because its long, involved and incredibly in-depth.