Japanese video game publisher Square Enix is announcing a $140 million hit as it overhauls its approach to developing future games, tying the staggering sum to the halting of certain productions.
The developers of the hit franchise Final Fantasy have published a “Notice on the recognition of extraordinary losses”. It said: “The company expects to incur approximately 22.1 billion yen in losses from abandonment of content on its books for the fiscal year ending March 2024.”
On March 27, 2024, a meeting was held with the participation of the Board of Directors, at which “countless” changes in the group’s environment were voted on.
It notes that the group has adopted a revised approach “to the development of high-definition (HD) games” to be more selective and focused in allocating development resources.
Square Enix has not announced which games or titles in development have been canceled or changed.
This news comes after the company’s president, Ryuji Kiryu, reportedly conducted a drastic review of its development system in February.
Bloomberg reported that on February 5, the president made a statement to analysts at the financial results press conference in which he reportedly announced, “We are reviewing which organizational system embodies the content of the pipeline and what is best on a zero basis.”
Square Enix’s sales remained stagnant despite the launch of new titles
On February 5, Square Enix released its financial results for the nine months of the fiscal year ended December 31, 2023.
Net sales were 257.6 billion yen (US$1.7 billion), up 1% year-on-year, while profit was 26.8 billion yen (US$180 million). Profit fell 42% year over year and Digital Entertainment net sales fell 2.5%.
Since its release, Foamstars launched a day later, but sales figures for this game are not yet known. The next part of the Final Fantasy 7 remake, Final Fantasy 7 Rebirth, was also released on February 29th.
Although no official numbers have been released, rumors suggest that Final Fantasy 7 Rebirth isn’t selling nearly as well as the first game in the reboot series.
As for Foamstars, that title saw a sharp decline in players just two months after release. Within two weeks of release, there was a 54% decline in the PlayStation player base.
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