Square-Enix and their Financial Woes

Square-Enix and their Financial Woes

By Dan Maurer

 

 

 

 
From Final Fantasy to countless other classics, Square-Enix has been a powerhouse in the video games industry. Classic titles to this day that have stood the test of time among gamers. From the original Nintendo all the way to as recent as the PlayStation 3 and Xbox 360, Square-Enix has made a name for itself when it comes to quality and presentation. In recent times however, releases have been universally panned by gamers and critics alike. This along with constant delays in releases has put a dent in the once mighty company.

 

With such chastening results on the immediate horizon, it’s been confirmed that CEO Yoichi Wada is resigning from his position, to be replaced by current representative director Yosuke Matsuda. He’s the second major executive to step down in recent times alongside EA’s John Riccitello.

 

According to the revised financial forecast for the end of the year March 31st, Square-Enix expects to have undergone an “extraordinary loss.” The name of the financial report itself is quite indicative of the company’s bleak outlook: “Announcement of Revisions to Consolidated Results Forecasts and Expected Extraordinary Loss.”

 

The company had some original projections at a forecast net sale of ¥150 billion and ¥3.5 billion net income loss. These projections are now ¥145 billion net sale and a whopping ¥13 billion net income loss.

 

Square-Enix reported that the majority of the extra ¥10 billion loss is accounted for by huge changes in development policy, business models, etc.

 

 

The report points that their losses for their estimated net sales comes from poorer than expected performance in North American and European markets. Not only did they suffer here, but their arcade machine business also performed unexpectedly low.

 

As recently as last month, word came out that Square-Enix was “disappointed” with the sales of Tomb Raider and Hitman Absolution. A company official was quoted as saying that Tomb Raider needed to achieve sales of at least 3 million units to “break even”. This has led to speculation as to how the financial situation at Square-Enix has gotten so out of control in recent years.

 

In this writer’s opinion, Square-Enix needs to rebuild the trust in its brand with gamers and work on releasing more quality products that meet gamers expectations. Although Tomb Raider and Deus Ex have stood out as quality games in recent memory, they have been overshadowed by constant Final Fantasy rehashes and other sub-par quality products that Square-Enix has released.

 

 

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