Support NeoGAF

[Blablurn]

Square-Enix had a strong run of IP last year, but its latest financial report makes for uneasy reading. The Japanese firm has published a loss of ¥5.7 billion for the nine-month period ended December 31st 2012, and cites the increasingly difficult console market as a key factor.


- Year-on-year profits are up ¥5 billion for the nine-year period ended December 31st 2012.

- The company’s financial project for the end of year is ¥3.5 billion, which is down 42.2% year-on-year. The company is still banking on big sales of Tomb Raider.

- Game sales were positive for the period, up ¥95.7 billion to ¥102.7 billion.

- Square-Enix cites, “the increasingly difficult condition of the world-wide console game market” as a key issue in its financial report.

It’s an about-face for the company, which posted a ¥5 billion profit year-on-year for the previous period, begging questions about the console market’s volatility in the run-up to next-gen formats.

Although profits were down, game sales were up from ¥95.7 billion to ¥102.7 billion, in a year that saw Hitman: Absolution, Final Fantasy XIII-2 and Sleeping Dogs go to market. It also published Call of Duty: Black Ops 2 in Japan, to no avail.

The company still has high hopes for its year-end financial report – presumably as Tomb Raider has yet to launch – with its net profit projection sitting at ¥3.5 billion, which is a 42.2% year-on-year decrease. Still, black is better than red.

In a statement issued this morning – via GI.biz – Square-Enix discussed its slumping financials:

“During the nine-month period ended December 31, 2012, the Company has not recovered the operating loss posted in the six-month period ended September 30, 2012. [This is] primarily due to the increasingly difficult condition of the world-wide console game market, under which the Group is struggling to achieve a fair expected return on its investment.

“On the other hand, content for other platforms such as PCs, smartphones and SNS such as ‘Sengoku Ixa,’ a browser game, and ‘Final Fantasy Brigade,’ a social networking game for Mobage, are generating an acceptable profit.

“In addition, newly released game titles, such as ‘Kaku-San-Sei Million Arthur,’ a social networking game released in April, 2012 serving more than 1 million registered users, have been expanding at a satisfactory pace. Registered users of Final Fantasy Artniks,’ a social networking game released in November, 2012 for Gree, exceeded 1 million at the end of December, 2012.”

http://www.vg247.com/2013/02/05/squ...s-amid-increasingly-difficult-console-market/

 

[Foffy]

Is it the difficult market at work or Square-Enix's disastrous track record this generation on consoles coming back to bite them in the ass?

 

[nickcv]

i was just about to post this...

i wonder where did the money go exactly.

aren't they reusing almost every possible asset for LR?

 

[Sandfox]

- The company’s financial project for the end of year is ¥3.5 billion, which is down 42.2% year-on-year. The company is still banking on big sales of Tomb Raider.

I don't know how to feel about this.

 

[Glass Rebel]

Wait...

YoY profits are up 5b but they still had a 5.7b loss?

 

[Czigga]

Man, banking on tomb raider. I'm nervous for them

 

[BanGy.nz]

I don't know how to feel about this.

Sad.

 

[Drencrom]

i was just about to post this...

i wonder where did the money go exactly.

New Lightning assets

 

[Acrylic7]

lets try making quality games.
astonishing, I know.

 

[antonz]

No shit you face a difficult console market. You spend all fucking gen funding vaporware.
Fans ask for easy things like TWEWY2 and instead you troll them with iphone shit.

 

[Sandfox]

i was just about to post this...

i wonder where did the money go exactly.

aren't they reusing almost every possible asset for LR?

That is a very good question seeing as how they had a large amount of iOS games that seemed to do well and unless I'm missing something they had a lot of success sales wise in 2012 outside of XIII-2 which still probably made them a profit.

 

[Averon]

If Square thinks Tomb Raider will be the ace-in-the-hole they think it will be, then they are delusional.

 

[FalsettoVibe]

How about they start releasing games that fans ask for. That might help.

 

[polyh3dron]

Shocking.

Putting all that money into Versus XIII and XIV and losing money, and putting out shitty rehashes of FF XIII which was just mediocre to begin with.. Sounds like a winning business strategy to me.

 

[Samurai_Heart]

And thus Square-Enix made All the Bravest =/, how's about releasing Bravery Default and if physical copy are so hard a PSN Final Fantasy Type 0 over here?

 

[Dwight Schrute]

It's those kind of thread that makes me miss :lol so much

 

[Mpl90]

5.7 billions in Yen = around 60 millions $

 

[Sandfox]

The new info op added is making me even more confused lol. If the games they released were successful and the mobile games are generating profit how did they lose so much money and how is it due to the condition of the market?

 

[scytherage]

I can't believe they're blaming the market. Have they even played the games they've been making? I can't imagine sitting through FF13 and its various iterations and not falling asleep.

 

[Box of Bunnies]

The company is still banking on big sales of Tomb Raider.

You'll want to protect their financials.

 

[FalsettoVibe]

Am I a bad person for smiling a little inside when I see bad financial news for SquareEnix? Maybe this will put them in panic mode.

 

[neptunes]

I never thought I see the day where Square was depending on a Western property in order to do good. (Not that there's anything wrong with that)

This company is so sad, how much money has been poured into the development of Versus and XIV?

No matter how long that can't be good for business, there's has to be a time where you just have to ship product. How much does Versus have to sell to recoup its investment? Will it still be exclusive to Sony?

 

[Pooya]

there is no mention of Hitman in their press release, I guess that's what "which the Group is struggling to achieve a fair expected return on its investment." is about,

well basically everything they published in last 1-2 years lol.

 

[The Abominable Snowman]

We're still waiting on delayed products from E3 2006. WTF do you expect?

Still, all in all, not a bad financial. They had a much more muted quarter. I expected BAD news. It's pretty decent

 

[Herb Alpert]

They have to make more IOS games.

FF15 timed exclusive for IOS. Then android.

 

[Sir_Crocodile]

It's not "difficult", you just don't make good games.

 

[Hydrogen Bluebird]

How about they start releasing games that fans ask for. That might help.

Exactly.

They've made quite a few games this gen that fans probably didn't want.

 

[Taker666]

Maybe they should make the next mainline Final Fantasy for the 3DS.

 

[patapuf]

Am I a bad person for smiling a little inside when I see bad financial news for SquareEnix? Maybe this will put them in panic mode.

So, they will take even less risks and focus on iOS and cheap sequels?

 

[Router]

Tomb Raider?


What could possibly go wrong?

 

[Negator]

Getting what they deserve.

 

[Sandfox]

Maybe they should make the next mainline Final Fantasy for the 3DS.

The meltdowns would be bigger than DQIX.

 

[onQ123]

Square You know what to do

 

[Ushojax]

The company is still banking on big sales of Tomb Raider.

So, they will take even less risks and focus on iOS and cheap sequels?

They...already do that.

 

[Stark]

aren't they reusing almost every possible asset for LR?

Somewhat. A mixed bag.

 

[dreamstation]

How difficult is it to just give the gamers what they want? Versus, FFXV, FFX HD, KH HD, etc.

 

[Saty]

Can we finally put the notion to sleep that Sleeping Dogs was any sort of a sleeper hit? Good.

 

[FalsettoVibe]

They...already do that.

lol

 

[Kenka]

Can anyone chart the amount of RPGs sold each year in Japan by company ? I would love to see how S-E's competitors are "struggling" as well.

 

[Biggzy]

How difficult is it to just give the gamers what they want? Versus, FFXV, FFX HD, KH HD, etc.

After their botched efforts this generation with the IP, I no longer care about the property.

 

[Sammy Samusu]

Time for FFXIII-4.

 

[AniHawk]

i feel bad for enix.

 

[Donthizz#]

Time to make a FF tactics game again..

 

[Shadow780]

Time for FFXIII-4.

Oerba Returns

 

[grimshawish]

Tomb Raider you say...uh oh...
Just bring over BD square. Theb we're cool.

Can we finally put the notion to sleep that Sleeping Dogs was any sort of a sleeper hit? Good.

But the UK!...


Wonder if Hitman drew in a loss when sales and marketing were added together.

 

[vareon]

Banking on a reboot of an old IP doesn't seem...convincing...

 

[Stark]

Time to make a FF tactics game again..

Time to move on from FNC by early next year and get the mainline titles moving again.

 

[Magic Mushroom]

It's not "difficult", you just don't make good games.

Sleeping Dogs ended up fourth on our GotY list!

 

[neptunes]

Time to make a FF tactics game again..

Yeah, that'll save them, that and making a sequel to [insert your favorite Square title from yesteryear]

 

[Biggzy]

Tomb Raider you say...uh oh...
Just bring over BD square. Theb we're cool.



But the UK!...


Wonder if Hitman drew in a loss when sales and marketing were added together.

That game tumbled down in price here in the UK. I think there is a chance.