In the weekly Toyo Financial Magazine's March 16th Special Edition (released March 11th in Japan), a full page article covering the background details to the recent movement of Square and Nintendo has been reported. The article also depicts a short graph of the relationship involving the companies.
A clip of the article can be found in Japanese site "Epistle", and is also available in text form in gaming news site GC-inside (special thanks to Dorikyasu for this news).
In the article, the following points have been made.
1- Conditions given to Square by Sony Computer Entertainment (SCE) as the second major stockholder was that, Square's contract to Nintendo will not effect Square's development for the Playstation2.
2- By creating a new company, Square will be able to clearly distinguish between where Yamauchi's funds are going, and also send a message that Square will still keep their main focus on the PS2.
3- However, the new company is a paper company, as Square executive Akiyoshi Kawazu and approximately 10 developers from Square's Production 2 team will actually be involved in the development. Realistically, the new company is a part of Square, and is only portrayed as a separate company by its structure.
4- Reconciliation with Nintendo has been one of the top priorities for new Square CEO Souichi Wada, as a mean to stabilize Square's income. Wada is speculated to have also hurried in rebuilding their relationship in order to stop the flow of important staffs to leak outside of the company. There have been cases of staff leaking by groups in the past, as employees of Square specializing in 2D have been eager to work on Software for Nintendo.
5- While Sony and Nintendo were each other's strongest enemy, this distance has shrunk since the change of rivalry structure with the appearance of Microsoft and its Xbox.
6- As Bandai's Wonderswan was struggling in sales, Square's development for the handheld console supported to popularize the machine. However, with this new situation, Bandai will be left in an even difficult standpoint than before.
7- Thus, Square has found an effective way to utilize their assets from their past, while Nintendo has now gained a strong boost for their Game Boy Advance which is lacking in vitality.
Short Comment - Considering that the Nikkei Journal reported on the 8th and this magazine was for release in the 11th, I wasn't sure if it was for real or not. But I've just checked the actual magazine- the article is in there, all right.
- "Madman" H. Moriarty