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Square-Enix expects ‘extraordinary loss’ in next financial report

Tuesday, 26th March 2013 09:11 GMT By Dave Cook

Square-Enix has revised its financial forecast for the year-ended March 31st, and now expects to suffer an ‘extraordinary loss’.

The financial report is actually titled, “Announcement of Revisions to Consolidated Results Forecasts and Expected Extraordinary Loss” and paints a grim image of the publisher’s performance across the current financial year.

The report reads, “The Company forecasts that actual business results from its Digital Entertainment Segment substantially fall below its plan primarily due to slow sales of major console game titles in North American and European markets.

“The Company is also experiencing sluggish performance of its arcade machine business. In addition to these factors, the Company expects to incur extraordinary loss about loss from restructuring in the settlement of the account for its fiscal year ending March 31, 2013.”

Said revisions are edits to the company’s last projection, made back on October 30, 2012, and suggest a dip in digital and western sales.

The publisher had forecast net sales of ¥150 billion, but has now reduced its expectations down to ¥145 billion, as well as dropping its estimated ¥3.5 billion net income loss down to a staggering ¥13 billion.

Following the revision, Square-Enix has stated the “extraordinary loss” in question will come from “major reforms and restructuring in its development policy, organizational structure, some business models, and others”, which will account to further loss of ¥10 billion.

The loss breakdown works out at the disposal of content at around ¥4 billion, loss on the evaluation of content at around ¥4 billion, and the “other” section will cost approximately ¥2 billion.

It’s bad times indeed for Square-Enix. What do you think can be done to reverse the trend? Let us know below.

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24 Comments

  1. Digital Bamboo

    Hopefully this grim forecast will spark the sense of creativity that brought the company back from the brink like the first Final Fantasy.

    They should start listening to the fans, try some new IP, instead of stubbornly insisting that what they’ve been doing is what everyone wants.

    An open-world FF game and remaster of FFVI or Chrono Trigger wouldn’t be a bad place to start, but they really do need to expand their repertoire: Tomb Raider was nice, Deus Ex:HR is cool, but the FF name is not what it used to be. They need to remind people that they are still capable of greatness.

    #1 2 years ago
  2. Blue Oni

    “The Company forecasts that actual business results from its Digital Entertainment Segment substantially fall below its plan primarily due to slow sales of major console game titles in North American and European markets.”

    Could they mean Tomb Raider?I thought the game was selling well.

    #2 2 years ago
  3. DeyDoDoughDontDeyDough

    This is what happens when you wait 8+ years to launch your next console. People lose interest.

    #3 2 years ago
  4. DrDamn

    Yoichi Wada has resigned …

    http://www.hd.square-enix.com/eng/news/pdf/20130326_02en.pdf

    #4 2 years ago
  5. tezzer1985

    Does Sony still own just under half so Square?

    #5 2 years ago
  6. KrazyKraut

    Focus on western games for the western audience and japanese games for the eastern audience is maybe not the right thing.

    Still wait for Type-0 and other Final Fantasy games. And they deserve what happend for mistakes like FF14. The game was horror at the beginning and before they closed the first version some months ago it was awesome and playable. I hope they listen more to fans.

    #6 2 years ago
  7. DrDamn

    @5
    Sony bought 18.6% of Square, which translates to 8.25% after the Square Enix merger.

    #7 2 years ago
  8. G1GAHURTZ

    Bad news for Square Enix…

    #8 2 years ago
  9. Moonwalker1982

    How can this be with quality releases like Deus EX HR, Hitman Absolution, Sleeping Dogs and Tomb Raider? :(

    #9 2 years ago
  10. Digital Bamboo

    ^ Good question. Perhaps the burden of making FFX(2)HD & Versus XIII being in development hell are taking their toll?

    #10 2 years ago
  11. Moonwalker1982

    Yeah maybe indeed FF is to blame. When it comes to their own games, FF….they seem pretty lost. But when it comes to third party, they are doing awesome. A damn shame this.

    AH damn…this is not good:

    http://i.imgur.com/GEQFqvy.png

    I hope this won’t mean bye bye Tomb Raider sequel and bye bye Legacy of Kain new game.

    #11 2 years ago
  12. ps3fanboy

    WHY BUY TOMB RAIDER NOW??.. WHEN YOU KNOW THAT THE GOTY COMES NEXT YEAR WITH ALL THE MISSING PART OF THE GAME INLCUDED ON DISC+PATCHES & FIXES… THIS EXPECTATION TO SELL MILLIONS ON DAY ONE WILL NEVER HAPPEN, THEY CAN THANK THEM SELF FOR THAT…

    #12 2 years ago
  13. Gnosis

    http://blog.crowdspring.com/wp-content/uploads/2011/02/capslock.jpg

    #13 2 years ago
  14. Francis O

    The problem with SquareEnix is the amount of money their spending on games. They do have some big Ips like Tomb Raider, Hitman, and Deus Ex. These games take massive budgets to make. And while they sell ok, a few million units, It’s not enough to actually make huge profit gains.

    These games have huge multimillion dollar production cycles. You have to sell more than 5 million units if you want to see huge gains. And we all know games devalue quickly. Hitman Absolution was $29.99 a month after the game came out. Thats not good for SE bottom line.

    Hopefully the old Square can come back. Bring back the FF we all know and love. Not this FF 13 crap. Make a new Chrono Trigger and Secret of Mana game. And stop with the massive budget Western games. You guys were a lot more successful without them.

    #14 2 years ago
  15. salarta

    All they have to do is make more games exactly like the new Tomb Raider and they’ll be swimming in money. And that’s exactly what’s going to happen. To every IP they have.

    As I’ve said elsewhere, hopefully we at least get some boobs out of it. May as well stop pretending we have standards and go for broke.

    #15 2 years ago
  16. OlderGamer

    Remember when BDH was saying that consoles will kill publishers and developers alike…just saying….

    And folks, there is only so much room for trip A games in the market. Everytime a game comes out at 60usd and has 30usd+ in DLC…somewhere another 60usd game will go unsold. People only have so much money. If pubs like SQE wanna excel they need to start looking at the mid teir gaming market. Not out right budget games, but not big blockbuster games either. Try targeting your games for the 40usd price range(with NO DLC).

    And my other advice, focus more on Japan.

    #16 2 years ago
  17. DrDamn

    @OG
    Consoles are not doing the killing. Poor management is doing the killing.

    #17 2 years ago
  18. OlderGamer

    I was just pulling out something BDH used to say. His words are solid! lol if you recall him saying all of that stuff. Funny how it has sort of panned out.

    What I think is that the market changed. I think the global economey has changed. The yen to western currencies values have changed. And all of that makes it very hard for a JPN company like SQE to continue to be a major player.

    #18 2 years ago
  19. viralshag

    Well obviously if they only have $90 to spend they can’t buy two $60 games anyway…

    #19 2 years ago
  20. DrDamn

    Heh. Just edited my comment as I missed out a “not”. :)

    Market change is the biggest one and some of the bigger companies just couldn’t or wouldn’t change how they should to survive. Unfortunately that has impacted the devs more than it should have.

    #20 2 years ago
  21. Gnosis

    @16: I don’t think you can blame that entirely on consoles. SE made several really big and really stupid mistakes during the past few years. The biggest one was obviously XIV, which was already a train wreck before they started working on the console version. And despite all work it’s still not in a very good shape. Not good enough to have a monthly fee, that’s for sure. They decided to bring XIII to PS3 although it already was in development for 2 years, took way to long to actually release it, never released Versus, there was no main KH game this gen and only one Dragon Quest game on a handheld. And that’s it. Their three main franchises, on which SE relies.

    #21 2 years ago
  22. G1GAHURTZ

    Speaking of predictions, I’m wondering if any of this will turn out to be true…

    Nintendo does so well, because for the most part they can connect with what large numbers of people want. And they offer that. The WiiU GamePad was a gamble. It is expensive to make, would be in short supply, and was risky to see if both Devs and Gamers would/could want to use it. I bet within five years tablets and console gaming go hand in hand.

    #22 2 years ago
  23. Edo

    Well shit….

    #23 2 years ago
  24. Henryartem

    They need a new arch of great series, something like what happened during the FFVII-FFVIII-FFIX-FFX era. A good plot development, an immersive gameplay and a sharp balance between the game&fun x story&experience apects would do the trick.

    #24 1 year ago

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