Square Enix revises earnings to $150 million loss

[Correction]

Buzzing about this at the FFXIV forums but it affects a broader slate (Deus Ex, Hitman games, etc) so it's more appropriate here.

http://www.andriasang.com/e/blog/201...ings_revision/

Spoiler: show

Square Enix Revises Earnings Forecasts For Major Loss

Losses attributed in part to cancellations as company tightens its selection standards.

Posted on 05.12.2011 at 14:06, by Anoop Gantayat

Square Enix announced revised earnings expectations today. The company says that it will incur a net loss of 12,000 million yen for the previous fiscal year. Its previous forecast from February 3 listed a modest net profit of 1,000 million yen.

The revision is due to extraordinary losses, in part from a "tightened selection standard" for games. This will result in 4.5 billion yen in losses related to development cancellations. A press release announcing the revision did not share specifics beyond this.

The company will also incur a "loss on disaster" of approximately 0.6 billion yen related to the Tohoku earthquake. This is for closures and restoration of amusement facilities.

As these are all extraordinary losses, revisions to the company's forecasts for its other areas weren't as extreme. Sales forecasts are down from the original 130,000 million yen to 125,000 yen. Operating income expectations are down from the forecast 8,000 million yen to 7,300 million yen.

You can read Square Enix's full revision statement here (English, PDF).

pdf at http://www.square-enix.com/eng/news/pdf/110512.pdf

SE trimming down their selection is GOOD for consumers, since lately all they're able to do is shit out horrible, unplayable F2P MMOs and release trailers for games 2+ years out. Hopefully this won't impact studios they own that we care about (DON'T FUCK WITH HITMAN THX) but it's a pretty dire revision of their earnings.

[BadKarma]

Shut down XIV. Update XI. Profit.

[Ksandra]

Shut down XIV. Update XI. Profit.

I was just about to post that this may mean even more attention to FFXI from developers, because it's a steady stream of income for them atm. Even if that income is small, it's better than nothing (ie lolffxiv)

[Lucavi]

Good news. You release shit, you earn shit in return.

[Correction]

Even if that income is small, it's better than negative cash flow (ie lolffxiv)

If nothing else it will hasten the decision to cancel the PS3 port. SE may question the wisdom of 3 more titles named FFXIII as well.

[volcanicweather]

Never a good sign when a company has to do this. I agree that SE should just pull the plug on XIV (at least outside of Japan) because it doesn't stand a chance to be profitable in NA/EU with better and/or more renown MMOs like GW2, TERA, and SW:TOR on the horizon. No point wasting resources on customer service and translation for a game that's struggling as F2P and will get crushed in the markets I just mentioned as at least 1 of these games will almost certainly be a huge hit here.

[Rulke]

I've been a fan of SE for years, like many people. However a sadistic part of me is happy to see them hurting after releasing such crap like FFXIV. Consumers can only take so much before they leave even their most favorite companies behind due to poor products.

[Ksandra]

I honestly don't know what they should do with FFXIV. I honestly don't think it can be saved sad to say. Even if they fix it, it'll be way too hard to encourage enough customers to give it another try to make it worth it. Dunno if they can afford though to bite the loss and just shut it down either.

Probably best bet is to make it a true f2p mmo and start up a cash shop in it, so they can at least try and get their money back.

Then either stop with the mmo scene for awhile (outside of ffxi shit), or fucking do shit right this time around.

[Nevex]

If nothing else it will hasten the decision to cancel the PS3 port. SE may question the wisdom of 3 more titles named FFXIII as well.

Two, not three (Agito XIII has been renamed into Type-0).
If they show us a good FFXIII-2 trailer (all they need to do is show Lightning walking in a townz and mid-battle character switch to please the masses) that game is guaranteed to be a cash cow.
VXIII doesn't look too good though.

I really hope SE never sets foot into the MMORPG field ever again after this.

[Ksandra]

VXIII doesn't look too good though.

I think they must have scrapped this, or are redoing the whole damn thing, because after that one period where they were showing all kinds of FFXIII and VFFXIII shit it disappeared off the face of the planet on news updates.

[Charismatic]

VXIII doesn't look too good though.

That's not what most people are saying, rofl.

[Charismatic]

I think they must have scrapped this, or are redoing the whole damn thing, because after that one period where they were showing all kinds of FFXIII and VFFXIII shit it disappeared off the face of the planet on news updates.

Uh... there was a recent trailer for it (with the FFXIII-2 reveal) and Nomura has stated that it's going to be out after FFXIII-2. Also, there's the fact that the folks at Square don't want to lose Nomura and the team he has working with him on that game, supposedly if SE fucks with VXIII, they're going to walk.

[Ksandra]

Uh... there was a recent trailer for it (with the FFXIII-2 reveal) and Nomura has stated that it's going to be out after FFXIII-2. Also, there's the fact that the folks at Square don't want to lose Nomura and the team he has working with him on that game, supposedly if SE fucks with VXIII, they're going to walk.

Oo never saw the trailer, guess I'll have to look into it.

Still though wasn't it originally going to be out only like 6 months after ffxiii originally? so if it's coming out affter ffxiii-2, then ya I still say they must have been changing a lot of shit on it from it's original plan.

[Charismatic]

Still though wasn't it originally going to be out only like 6 months after ffxiii originally?

I don't think so.

[Katlan]

I'm not surprised at all. Outside of lolXIV, most of the games they publish are complete shit and, while I was happy w/ XIII for the most part, FF isn't as strong of a name as of late because the direction of the franchise has been going downhill. Also, outside of FF.. do they publish anything good anymore? Their latest RPG's have been horrible from what i heard (Nier and that other one)

Can't help that XIV has been so horrible that they are losing money every month since it generates 0 income. Hopefully when they came goes P2P they will also revamp the payment method to make it so giving them money (if the game is then good) isnt the most painful thing I have seen for any mmo since the genre started

[Correction]

From GAF

Well, while we don't know if they have just been canceled, this is what Square Enix currently has announced:

Eidos:
-Hitman: Absolution
-Tomb Raider
-Deus Ex: Human Revolution
-Thi4f

From Statements:
-Kane & Lynch 3
-Eidos Montreal Game 3

From Job Postings:
-Crystal Dynamics New IP

Enix:
-Dragon Quest: Rocket Slime 3
-Dragon Quest X

Square:
-Final Fantasy: Type-0
-Final Fantasy Versus XIII
-Final Fantasy XIII-2
-Final Fantasy XIV Online (PS3)
-Chocobo Racing 3D
-Kingdom Hearts: Dream Drop Distance

Semi-Announced:
-Kingdom Hearts: Birth By Sleep: Volume 2

External:
-Dungeon Siege III
-Chaos Rings Omega
-Chaos Rings 2
-Wakfu

Wild guessing as to how this list is going to get pared down GO!

[Ksandra]

Wild guessing as to how this list is going to get pared down GO!

For sure they'll keep (outside ff stuff) tomb raider and KH since both are strong titles. Probably would keep DQ too as they tend to sell ok.

[Hyan]

FF developed outside the Tokyo branch was always a shitty idea, I hope they scrap FF Fortress for good if they haven't already.

[Kuya]

I'm really hoping that this company goes under soon.

[volcanicweather]

For sure they'll keep (outside ff stuff) tomb raider and KH since both are strong titles. Probably would keep DQ too as they tend to sell ok.

Both DQ and Kane & Lynch were strong sellers according to SE's financial results and they cited mobile games as successful (moreso in Japan) and as a strong point for growth. Chocobo racing, Thi3f, and Deus Ex the ones to kill if you ask me as they cited consoles as their main source of declining revenue.