Smileworks was a spin-off of the publisher's mobile game development division Smile-Lab, officially launched in June 2013 with 23 staffers and a mandate to makes games for both the local and international mobile market.
"It has proved difficult to achieve the expected results from the Square Enix Smileworks business," a Square Enix representative told GamesIndustry.biz, noting that the studio had shrunk to 14 people before its closure. "After re-evaluation, the company has decided to close down the Square Enix Smileworks business."
Update: The company provided an identical statement to Gamasutra, and added that "going forwards we will focus on developing businesses in Indonesia and other south-eastern Asian countries through partnerships with local companies who are thoroughly versed in customers and business practice in each given market."
"Furthermore, we will pursue developing businesses in the emerging markets," stated Square Enix of America representative Reilly Brennan. "Not only in Asia, but also other regions including Middle East, South America and Russia."
Back in April the publisher also shuttered its India branch, which had been open for just over a year.