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

Monday, 13 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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