According to president and co-founder Sugiura Hirohide, the company was formed after the release of the Squaresoft film "Final Fantasy: The Spirits Within" proved to be a box-office bomb. With the film losing $94 million at the box office, Squaresoft had very little money left to create a sequel to Xenogears, thus causing Hirohide to leave the company and create Monolith Soft along with Tetsuya Takahashi, also a former employee at Squaresoft.