Square Enix announced that they’ve incurred massive losses in profits from cancelled titles. Read on to learn more about the company’s statement as well as what this means for future titles and remasters.
Square Enix Expects To Lose 22.1 Billion Yen
Mainly Because of Cancelled Titles
Square Enix recently announced that they are expecting a massive loss of 22.1 billion yen, or over $140 million, in the fiscal year ending in March 2024. The reason is mainly caused by changing their development policy and the cancellation of ongoing projects.
In an executive meeting concerning the company’s board of directors held on March 27, they decided to revise the development policy for HD video game titles with the reason being "due to diverse changes in the environment and in an attempt to allocate and concentrate development resources." The result of this is a massive approximate loss of 22.1 billion ye due to "content abandonment losses."
An Effort to Get Back on Track
Newly appointed president, Takashi Kiryu, already announced back in February that this was already to be expected come April, as this was an effort to "improve the quality of its work." He described that one of their goals was to reduce the amount of outsourced development to external development and focus on in-house development for their big titles saying, "I want to increase our development proficiency by strengthening our internal development capabilities so that we are able to achieve greater diversity in our title portfolio. I would also not rule out inorganic means as an option for strengthening our internal development capabilities."
Another point that Kiryu made before was that the company needed to increase the diversity of their releases while having fewer releases, seemingly pointing out that the company should be more efficient when it comes to releasing new titles as a whole. He addressed that the company has been relying on certain genres and styles while not catering to the growing taste of the audience, saying, "Because we possess strong IPs like the Dragon Quest and Final Fantasy franchises, I believe that we have tended to be overly reliant on certain gameplay styles or genres," and added, "Meanwhile, the tastes of customers in the gaming market have diversified, and customers have come to enjoy content from a variety of genres."
Where Do We Go From Here?
With the supposed changes now taking place, it seems that a lot of Square Enix’s current projects will be in limbo. While it’s not confirmed as to which projects are to be halted, it may be safe to assume that a lot of their plans are going to be scrapped to focus on improving their upcoming big titles. It was already reported by Director of Research and Insights at Niko Partners, Daniel Ahmad, that their latest big title, Final Fantasy 7 Rebirth, isn’t doing so well sales-wise. "It’s selling about half of what Remake sold in the same timeframe and looks like it’ll have a weaker tail (prior to any PS+ like release)," Ahmad posted.
Moreover, there has been no news regarding Dragon Quest 12, the supposed latest entry in the series. The last known news was that Dragon Quest’s lead producer, Yu Miyake, was stepping down from his role to head the mobile games division instead. Hopefully, this is an effort for the company to get back on its feet, as both Final Fantasy and Dragon Quest are beloved IPs in the gaming industry.
Source:
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Square Enix expects loss of $140 million from cancelled video game title
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Final Fantasy 7 Rebirth is ‘underperforming’ sales wise, analyst claims
