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Square Enix's console business still on the ropes
Square Enix's console business still on the ropes
August 6, 2013 | By Mike Rose

August 6, 2013 | By Mike Rose
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    13 comments
More: Console/PC, Business/Marketing



Square Enix was able to reduce its latest quarterly losses thanks to steady browser and smartphone sales, but was forced to evaluate the game titles that it currently has in development for console.

Console game sales are still weak for the company, and were especially so during this latest quarter, due to the fact that Square Enix released no new major titles.

As a result, the publisher says that it has "conducted a comprehensive review on work-in-progress game titles," and has booked a loss of approximately 1.6 billion yen ($16.2 million) after evaluating this content. The report does not give details on which titles have been affected by this move.

Note that Square Enix says that it is not altering its full year fiscal forecast, as it believes that it can drive substantial earnings through business structure reform, in order to establish a new revenue base.

Meanwhile, Square Enix's browser games are performing well, with SENGOKU IXA and Kaku-San-Sei Million Arthur both proving valuable for the company. Its major MMORPG Dragon Quest X is also showing steady performance.

For the quarter ended June 30, 2013, Square Enix's Digital Entertainment sector posted revenues of 11.6 billion yen ($117.6 million), up 2.1 percent year-over-year, and operating income of 1.3 billion yen ($13.4 million), compared to operating losses of 111 million yen ($1.1 million) year-over-year.

Overall, the company recorded revenues of 24.1 billion yen ($244.3 million), down 3.3 percent year-over-year, and losses of 493 million yen ($5.0 million), improved compared to losses of 2.1 billion yen ($21.3 million) in the previous year.


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Comments


Alan Rimkeit
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Are they stupid? Re-make Final fantasy 7 in the new FF Luminous engine for PS4 and X-Box One. They will make so much loot it would be ridiculous.

Stephen Horn
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I agree that making a Final Fantasy 7 HD initially sounds like it would be just this side of "printing money", especially after nearly 10M lifetime sales of FF7, plus whatever is being made from the PlayStation Store sku. I just also think it would be hugely expensive to make. Maybe it's a safer bet than a whole new world on a main-numbered title, but 10M is still an awfully big number to shoot for.

John Flush
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They have purposely avoided touching FF VI and VII for remakes... probably because of fan back-lash if they did and didn't do it 'perfectly' So instead they just re-release them. The first on the GBA the other on Steam and such.

I'll be honest, if they had it on the 3DS I would buy them. I don't need a HD anything to give them $5-10 more money.

Alan Rimkeit
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Then I guess SE doesn't like huge pile o' cash, because that is what they would make with an HD remake of FF7.

Mike Murray
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People like to think that FF7 is a magic bullet that will eliminate all of Square Enix's problems, but I don't think so. They could release the game and sell millions of copies and be a critical success, but at the end of the day they're still Square Enix. One game isn't going to suddenly make them cool again.

Alan Rimkeit
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It would not fix their issues totally but it would make then boats loads of cash. Which is good for business.

Jeanne Burch
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And after 20 years of production when they finally get around to releasing it, I'm sure it will be a big seller!

Dane MacMahon
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Tr fact they consider Tomb Raider and the like as poor sellers is their real problem, and the problem of next gen consoles in general.

Stephen Horn
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Every main-number Final Fantasy since Final Fantasy VII has sold more than 5M. No Tomb Raider game has sold more than 5M since Tomb Raider II in 1997. 2013's Tomb Raider has sold about 2.1M so far.

2.1M is not a failure, to be certain, but I'm sure Square's perspective is that they have much more popular franchises to fund.

Dane MacMahon
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I read a much higher number than 2 million. If that's all it was that makes more sense. I read around 3.5 a month after launch. I'll have to research to find out the official number.

Stephen Horn
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I don't know if "trustworthy" numbers are publicly available. I took the 2.1M figure from a vgchartz table, because it was a convenient summary of the whole franchise. It looks like the sum of all of vgchartz's estimates puts the total sales for the latest Tomb Raider at around 2.7M. Definitely much better, but still supports my point that Square is probably accustomed to much bigger hits.

Deus Ex: Human Revolution appears to have similar lifetime sales to that of Tomb Raider 2013, but biased a little more towards PC.

Dragon Quest VIII and IX both broke 5M.

Duvelle Jones
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Maybe it is just me, but I have alway had this feeling that Square Enix had issues with managing expectations. The recent Tomb Raider is a good example of this, where sales were short despite being a mild success. I know that DeuxX had budging issues while in development.... and that Versus game continues to limp along

At this point, I would be worried about how SE does business... cost management is a big concern, and history paints a pretty stark picture of not getting a handle on that. And moving to the next gen is only going to make that issue more pressing.

Michael Stevens
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Meanwhile, the Atelier series has just released it's 13th consecutive annual release, it's 5th on the ps3. They sell about 300-500k a year, every year, on a sliver of the budget. And people don't resent those games.

SE has one of the least coherent console strategies in the industry. Inconsistent games on an arbitrarily broad array of platforms. After being really tightly focused during their Sony era they fragmented their audience then disappointed them.


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