Square Enix Holdings announced today that it expects to post a ¥12 billion ($148 million) loss for the fiscal year that ended in March, a stark turnaround from a February internal prediction of a ¥1 billion ($12.4 million) profit.
In a revision note issued Thursday, the company said it plans an ¥8.8 billion ($109 million) goodwill writedown, citing "a rapidly changing operating environment and more prudent estimates of future cash flows."
Also contributing to the downgrade are expected losses of ¥4.5 billion ($55.7 million) attributed to a "tightened selection standard regarding title lineup [and] project development cancellation."
Damage to Japanese amusement centers operated by Square Enix caused another ¥600 million ($7.4 million) in previously unanticipated losses, with changing account standards, asset retirement and other factors contributing to the remainder of the expected loss.
Despite the new, more pessimistic outlook, Square Enix still expected to bring in ¥125 billion ($1.55 billion) in sales revenue for the fiscal year, largely in line with previous expectations of ¥130 billion ($1.6 billion) in revenue for the year. Both numbers are down from over ¥192 billion ($2.38 billion) in revenue for the 2010 fiscal year, however.
Square Enix saw over ¥9.5 billion ($117.6 million) in profits in the 2010 fiscal year, a record result led by multimillion sellers including Final Fantasy XIII.
Profits for the first three quarters of the 2011 fiscal year were down 77 percent from that high mark, a result president Yoichi Wada attributed to "intensifying competition in the console game market."
It was a joke. ;) Every post on any site about Square Enix's finances always gets an obligatory "Square needs to remake FFVII!" and cracks about the PSN being down are also becoming memetic as well.
Personally I think this could all be fixed if they put out another re-release of Final Fantasy IV. I mean, 800 released of that one title to date just isn't enough. We need more!
Well, Square-Enix was doing better in that area of late - before the PSN outage, it seemed like a Square-Enix PS1 game was going up on the service every week.
So how much of this is due to the fallout of the MMO? I've read that they are pouring tons of resources into addressing its issues, but is it a lost cause?
S-E has been in the dump can for some time now. Really, how hard is it not to notice what the fans (mainly be it overseas) want in the next installment of a FF title? Or rather, learn from their mistakes (i.e. FFXIII) and re-release games on XBLA and PSN of their early yet highly successful FF titles and spin-offs. It just boggles my mind that S-E hasn't been bought out yet, restructured - and don't tell me that what they did recently was a good idea and helped them - then finally putting in the money and time to create (or recreate) new FF titles. IMO, everything before FFX - excluding FFXII - was epic and has the potential to draw in more people to become fans of the series.
Yeah I liked Square-Enix better in the PS1 days when they were churning out one elaborate and innovative world after another: Vagrant Story, Legend of Mana, Final Fantasy Tactics, Saga Frontier, Front Mission 3, Bushido Blade, Xenogears... Come on Square... come back to us.
I was thrilled when they merged with Enix as they also had a great reputation, but it really seems like the quality has gone downhill since.
Well, back in the PS1 they could develop games much faster. It's easier to be inventive when you can make a game from scratch in about a year with a small team than when you need four years and a huge team to produce FF13, and have to drop the original focus on making the engine reusable to even achieve that deadline.
It's easy to list a lot of potential reasons for Square's decline over the years, but I wonder if it's partially due to gamers' attention spans just not being able to appreciate old-school JRPG game design anymore. Just speaking from anecdotal experience, several of my friends and I used to love every RPG that Square released, and now none of us have the time or attention spans for them anymore.
The gaming experience nowadays is dominated by no shortage of pure-meat content with no filler. Games are more cinematic, action-packed, varied, etc. Gone are the days when gamers were willing to put up with repetitive level designs and game mechanics in order for game length to be inflated. There's just no reason to feel compelled to grind away RPG characters in a single-player game setting anymore.
The competition for our time is much stronger, and most of our incomes have increased since we grew up with Square's classic titles -- we're now calculating a game's merit by enjoyment/time, rather than time/price.
FF13 still sold millions, so I think the appeal of the genre isn't as damaged as you'd think. But with extended development periods there just aren't nearly as many RPGs coming out as during the PS1 explosion, and so it has fallen out of focus.
Do you have any data on FFXIII's current sales numbers? It looks like sales for the series have been falling since FFVII ( http://vgsales.wikia.com/wiki/Final_Fantasy ), which is bad news even if you don't account for increased production costs and relative industry growth.
I don't mean to imply that the JRPG genre is dead, but it's certainly not as appealing to gamers as it once was.
Pokemon features very traditional JRPG game design and the latest incarnations of that (Black & White) are selling better than ever.
The problem with the Square part of Square-Enix is that they have terrible management. FF13 had individual elements that were great, but it lacked the direction to mold those elements into a cohesive whole, plus they spent a small fortune developing it. And that's one of their more successful games in recent years.
(Obligatory x2)
I was thrilled when they merged with Enix as they also had a great reputation, but it really seems like the quality has gone downhill since.
The gaming experience nowadays is dominated by no shortage of pure-meat content with no filler. Games are more cinematic, action-packed, varied, etc. Gone are the days when gamers were willing to put up with repetitive level designs and game mechanics in order for game length to be inflated. There's just no reason to feel compelled to grind away RPG characters in a single-player game setting anymore.
The competition for our time is much stronger, and most of our incomes have increased since we grew up with Square's classic titles -- we're now calculating a game's merit by enjoyment/time, rather than time/price.
I don't mean to imply that the JRPG genre is dead, but it's certainly not as appealing to gamers as it once was.
The problem with the Square part of Square-Enix is that they have terrible management. FF13 had individual elements that were great, but it lacked the direction to mold those elements into a cohesive whole, plus they spent a small fortune developing it. And that's one of their more successful games in recent years.