The company has created both game franchises such as Blue Dragon and Terra Battle, and standalone titles including Lost Odyssey (2007) and The Last Story (2011).

With the financial problems caused by Final Fantasy: The Spirits Within, and his growing dissatisfaction with management, Sakaguchi decided that he wanted to make games outside Square.

Mistwalker has been described by Sakaguchi as a collective of artists that oversee projects, with its independent small-scale structure setting it apart from most other Japanese game studios.

Recurring individual collaborators include composer Nobuo Uematsu, and artists Kimihiko Fujisaka and Manabu Kusunoki.

He notably conceived and helped develop the role-playing video game Final Fantasy, which saved the company's finances at the time and began a franchise of the same name.

[1] The concept work for Mistwalker's first two projects, Blue Dragon and Lost Odyssey, began prior to the formation of the company, with Sakaguchi enlisting both Toriyama and Inoue, and contacts within Microsoft Game Studios Japan (MGSJ).

[15][7] Microsoft's Xbox 360 was chosen over the PlayStation 3 due to both difficulties with third-party production and personal disagreements between Sakaguchi and Sony Computer Entertainment leader Ken Kutaragi.

[17] Blue Dragon, on which Toriyama collaborated, was a highly traditional RPG intended for genre fans rather than trying anything experimental on the 360, which was a niche console in Japan.

[15][14] For Lost Odyssey, which featured character designs by Inoue, Sakaguchi created a narrative focused on emotion and the impact of conflict through the eyes of an immortal protagonist, collaborating with novelist Kiyoshi Shigematsu on a series of visual novel stories within the game.

[29] Mistwalker led production on Away: Shuffle Dungeon for the DS, which was released in 2008; Sakaguchi wrote the scenario, while the character designs were handled by Sega veteran Naoto Ohshima.

[30] Following his work on Lost Odyssey, Sakaguchi took feedback from both that game and Blue Dragon and decided to create more atypical action-based gameplay alongside continuing storyline innovation.

[31] The Last Story for Wii was originally a science fiction-themed game with a dedicated romantic plot, but through Nintendo's input, it shifted to being a fantasy-based storyline with a general theme of companionship.

[36][37] The choice to shift away from larger console projects was also motivated by Sakaguchi wanting to work with a small hand-picked team.