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Square-Enix financials: ¥13.7 billion loss, cites ‘competitive’ console market

Monday, 13th May 2013 09:47 GMT By Dave Cook

Square-Enix has posted its financial report for the financial year ended March 31st, highlighting a ¥13.7 billion loss amid what it has called a ‘competitive’ console market. The company will now look to the PC, mobile and tablet space with greater focus to reverse the trend.

NeoGAF poster miladesn got a hold of the company’s financial report, which opens with a net sales increase of 15.7% – up to ¥14.7 billion from ¥12.7 billion in 2012.

However, due to the cost of company-wide reform, the company’s net income loss ended at ¥13.7 billion, prompting renewed focus.

The report states, “In response to the latest environmental changes in the game industry, the Group has implemented various strategic initiatives such as a change in its development policy, organizational reforms and redesign of some business models.

“As a result of of such initiatives, the Group posts the extraordinary losses in addition to the recurring loss, which leads to net loss of ¥13,714 million for the fiscal year ended March 31, 2013″.

The confirmation of structural reform follows confirmation of lay-offs at Square’s European and UK offices, its LA office, and the high profile departure of president Yoichi Wada.

Elsewhere, the company’s Digital Entertainment arm – which covers all games – has seen a 99.7% decrease in operating income to ¥44 million, suggesting it barely broke even last year. In FY’12 is hit operating income of ¥89 million by comparison.

The report cites the, “Under-performance of major titles for consumer game consoles in North America and Europe”, as a key factor.

However, the report states that the browser and smartphone market has proved continually profitable for the company, backed up by the “Steady performance” of MMO Dragon Quest X and “Kaku-San-Sei Million Arthur” in Japan.

It seems that browser, tablet and mobile will be of great interest to the company moving forward.

The report continues, “The business environment surrounding the Group is in the midst of major changes, where smart devices such as smartphone and tablet PCs are spreading rapidly, while the console game markets in North America and Europe are increasingly competitive and oligopolistic.

“In light of such environmental changes, the Group is focusing all efforts on a substantial earnings improvement through driving reforms of business structure in order to establish new revenue base”.

Could this point to less Square games on home consoles? We’ll know more moving forward.

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13 Comments

  1. Templar_Dante

    Square-Enix financials: ¥13.7 million loss, cites
    “not knowing the industry and not killing Lightning off” as reasons. * FIXED

    #1 1 year ago
  2. heyvc

    Yeah.. probably the GREAT west game such as TOMB RAIDER, HITMAN and DEUS EX are the problem… not the stupid three part final fantasy XIII (seriusly?! THREE games of the most not WANTED?!) and the REALLY bad move they made with XIV.. yeah.. XIV had no losses… ‘– . What I liked about old JRPGS was the Group, the companions, I loved FF VI for the tons of characters and fun ones… also chronno trigger.. and then.. they launch FF XIII with few chars… not cool ones.. and THEN XIII-2 with TWO.. and THEN the third entry.. with only Lighting… :/ the thing I loved the most about JRPGS are being lost in theses FF games. Mass Effect, KOTOR, Dragon Age are great because of the team, the companions, the interactions with them. Shepard Wouldn’t be the same without them.. nor would revan.

    #2 1 year ago
  3. Moonwalker1982

    Do we need to be afraid that we won’t be seeing sequels of these titles anymore?

    #3 1 year ago
  4. loki

    It is look like make PC ports was not very good idea

    #4 1 year ago
  5. salarta

    Hey, I’ll support this direction if it leads to no more cases of Toriyama ruining good franchises like Final Fantasy and Parasite Eve, and no or fewer sequels or spinoffs to the latest “Tomb Raider.” I’ve long since given up naively believing that financial blows would get the company to stop ruining good things just to try and capture whatever’s popular with kids these days. At this point, those franchises dying has started to look like the best option of all possible options.

    #5 1 year ago
  6. Dark

    RIP Parasite eve .. a sequel for this game is the only thing that i wanted form SE.

    #6 1 year ago
  7. Dave Cook

    @7 oh man, I’d love to get the original Parasite Eve on my Vita. I played the NTSC version back in the day and loved it. Just a superb game.

    #7 1 year ago
  8. Khan979

    The new Tomb Raider was an awesome reboot, I hope they make a couple more sequels for that. Can’t speak for the recent Final Fantasies, as I Haven’t played one of thos since probably FF7 or 8.

    And hell yeah a new Parasite Eve, that was made well would’ve been awesome. I hate anymore when I read shit about major game companies going to Mobile platforms over console or PC. Unlike all the people that bash AAA, I am quite fond of a lot of Triple A games, and hope they don’t dissappear all together.

    #8 1 year ago
  9. ps3fanboy

    this is how it goes, they should have kept the ff series exclusive to playstation. instead of whore them self out to all platforms and lose focus of the ff games.

    #9 1 year ago
  10. theevilaires

    ^ yup I agree with you ps3fanboy. Its about making the consumers come to you not you to them. If your game is fucking awesome then they will buy it regardless if its only on one console. Spread yourself thin and make yourself too available then you become a slut….and wants to fuck a slut when she’s been everywhere with everyone.

    #10 1 year ago
  11. Demigod

    do we know how much they have lost so far on the ff14 and how/if that affected these numbers?

    #11 1 year ago
  12. salarta

    I don’t buy XBox exclusive games, and I’m someone that loves to support Mistwalker and Sakaguchi. It was disappointing that I couldn’t play Lost Odyssey, but I’ve never supported Microsoft in the console race, so it was a necessary sacrifice. There’s nothing wrong with going multiplatform though, because going multiplatform really does allow the widest audience to play the game.

    Major game companies, like with games like FF13, 3rd Birthday, RE6, DmC and Tomb Raider, are pursuing what they see as the most popular trends and trying to force what they own to fit the mold, rather than actually celebrating the unique and good qualities of what they have. That’s leading to failures on consoles, from a mix of royally screwing the franchises and pouring way too much money into efforts like marketing (though to be fair, to force several million in sales for an awful creative direction, you pretty much have to have an insane marketing plan). So then their plan is to… flood the mobile market with watered down games? The mobile market only works for certain groups because their games are quick and simple experiences that can be picked up and put down easy anywhere you go. It also only really works because the console offerings still exist; if all you have is an endless stream of mobile games, eventually you have oversaturation, and in terms of sales numbers themselves, it’ll just end up being the same as the console situation was.

    #12 1 year ago
  13. Gheritt White

    Hey salarta, why don’t you try spouting something new, rather than the same old shit over and over and OVER again?

    #13 1 year ago

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