Square-Enix’s latest financials show a decrease in sales and profits for the past nine months

    
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Things could be going better!

The latest financial report for Square-Enix is out for the prior nine months of operation, and it’s not a great report for the company. Year-over-year, the company’s net sales dipped 4.8% and profits dipped 60.1%. The aggressive drop in profits came partly due to the closure and restructuring around Luminous Productions, a subsidiary centered around developing further content for Final Fantasy XV which Square wrote off as an extraordinary loss in 2018. (Remember, this is the technical use of the term “extraordinary loss,” wherein the company wrote off assets it was not expecting to lose.)

The bright side is that the company’s core releases did indeed sell well, and it appears to be planning to focus more heavily on releasing, expanding, and developing its existing properties. Final Fantasy XIV‘s operating revenue also decreased year-over-year, but that is attributed in the report to the fact that no expansions were released in 2018; the earning report makes it clear that the upcoming Shadowbringers release will likely mark another upturn. So it’s not a strong nine months of performance, but there’s reason to believe the next few months will be better.

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Fenrir Wolf

It’s really not surprising. They’ve been pushing hard toward leaving their creatively inclined, colourful, fantastical past behind them. They’ve been moving in that direction for a while, now. I think the most notable origination of Nu Square is FF VIII.

I recall how hugely unpopular it was, and how it resulted in a face-heel turn with FF IX, which is probably the best PlayStation Final Fantasy of them all.

Sadly, even in the face of plummeting profits, I doubt they’d be brave enough to try to recapture their initial niche. Too big budget and with too wide a net cast. It really is a pity. With a company like Square one could split their massive dev teams up into smaller sub-studios each targeting more specific niches with exotic titles of both smaller budget and scope.

They couldn’t make less money than what they’re making right now, that way, and it’d generate a lot of good will. I honestly find myself wondering why a lot of larger, failing studios don’t give this a try. After all, it did work in the days of the Dreamcast, PS2, and GameCube; it could just as easily work once again. Someone just has to try it.

I don’t really think that the hundreds of under-served niches out there really care a whit about graphical fidelity. It’s a very superficial factor. So long as the graphics manage to be good enough? I can’t see that being an issue. I feel that the period of the DC/PS2/GC really nailed that balance of budget and scope.

I’ve bought three copies (and one special edition) of Little Dragons Cafe at full price thus far simply because it appeals to me as part of an under-served demographic. It’s a kind of game I’ve been waiting for for a very long time. I don’t get to fly around as or on a dragon very often, nor am I allowed to enjoy quirky, eccentric, and even deep characters because you just have to be po-faced, it’s the po-faced generation!

I doubt Square-Enix will do that, though. They’ll just keep making these massive budget games and MMOs until they go under. Only a matter of time.

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psytic

Did XV do that bad though? Its done over 8 million in sales. What else do they want? That is pretty decent. They just dont seem to have much in the oven for new games is the issue for whatever reason.

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Daniel Miller

Not decent if you think if 10 years to make and it was incomplete.

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psytic

according to this they made their investment cost back in one day of sales https://www.tweaktown.com/news/56169/final-fantasy-xv-made-square-enixs-money-back-day-one/index.html

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Danny Smith

It took ten years to release and lead to a 133 million dollar loss. even if every copy was sold full retail price thats nearly a quarter of total lifetime sales lost just to cover losses incurred during that period. The fact that a quarter of a final fantasy games sales were just burnt up to cover the nightmare going on at the time is a pretty unique situation.

Pepperzine
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Pepperzine

It just wasn’t that good of a game. It was a good game, but for me it was forgettable.

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Danny Smith

Not finishing a game and rushing out a 60% complete build will have that effect. Nice characters in the party and villain, some pretty locations but boy if MGSV is always going to be considered unfinished theres no way XV can be considered anything but “Toriyama overproduced so many assetts for his tulpa waifu game with the disaster of 13 we flipped a chrono trigger and valkyrie profile into more lightning games and are still losing money on the FF brand, we need to drag this carcass out for 15 because we have nothing else right now”.

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Fenrir Wolf

@Pepperzine

It was bland and forgettable, yes. Which is pretty much the worst thing a game can be. A game can be so bad that it somehow U-turns around into something enjoyable and memorable. It’s like their MMO, too. If you compare FF XIV with FF XI, it’s lost so, so much of its personality and identity. They’re just creating larger and more spectacular game at the cost of their games having an identity, or a soul.

Because that really is what it is. It’s a soulless endeavour. There’s no passion there, no verve, no life, nothing that really stands out as being important to someone. Their games feel like they’re going through the motions, now.

That’s why I’m dreading the Final Fantasy VII remake, if that happens before they go bust.

And they inevitably will go bust.

Honestly, I wish I’d been of another timeline. One where JRPGs got more over-the-top, silly, and cheesy. Where Scalebound was successful, a best-selling hit because of how wonderfully out there it was as a concept and as a game. I wanted dragon-friend sassing fun times. Sigh. Nothing Square-Enix can offer me comes even close to the promise of that.

And it’s funny, some might cite Xenoblade Chronicles 2 but that shows a lack of awareness of how JRPGs used to be (Shining Force, Skies of Arcadia, Grandia, Landstalker, et alia). XBC2 is… darkly cynical. It’s an otaku game dressed up as a JRPG whilst not really being like a JRPG, parasitically leeching off of old JRPG tropes in the hopes that’ll make it something special.

What it is is a game of RNG and Western MMO grind, one that’s tried hard to capture hints of Rogue Galaxy and Skies of Arcadia, yet failed miserably.

Also: THINK YOU CAN TAKE ME?! DON’T FORGET ME!

Phbbbt.

I miss JRPGs.

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psytic

https://www.tweaktown.com/news/56169/final-fantasy-xv-made-square-enixs-money-back-day-one/index.html

Made their investment back in one day of sales. So it seems that if they would have stopped there instead of trying to milk it with dlc they wouldn’t have lost anything.

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Fenrir Wolf

Development costs and time were insane, that’s not enough sales to justify the resources they put into it. They’re making ever larger games, they can’t seem to scale themselves back. The next game will be their largest and most ambitious yet! Annnd it’ll be the one that sinks them.

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Saito Hiraga

Haha, good. They deserve it. XV was released not even half complete and the only reason it sold as well as it did was because of good advertising.
Not only that, they start hyping up the 2nd Season Pass with the Level Editor Mods and everything. Then like a month later, they scrap it all. I wouldn’t even be surprised if Episode Ardyn is released incomplete, if it’s even released at all.
If SE have any sense, they should release the Level Editor Mods for XV on PC so at least that way, modders can have a chance of finishing their game.
As you can tell, I’m pretty pissed about XV, but hey, their losing money from it so that makes me happy. Hopefully no one will buy the FFVII Remaster and that will be the nail in their coffin.

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Bannex

Yikes. Guess I was way off huh?
Don’t want to be an I told you so but… maybe there is something to those numbers after all?

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Danny Smith

I think years from now FFXV is going to be looked on as the first mistake close to the level of Square Pictures in the early 2000’s. The big issue for them now of course is simple: they don’t have any large titles in the future.

sure theres a 7 remake but thats not coming out for 5 years if it comes out at all. Beyond that? Deus Ex is dead, they lost Hitman, Tomb Raider is declining as its a recurring series of “watch lara become the tom raider she was born to be… and we mean it this time!” but its still just an uncharted knock off which is deeply ironic, theres no big final fantasy, they dont have a kingdom hearts sequel to sell preorders for a decade for anymore.

They are the closest thing to a AAA of any rpg company in japan and they have no AAA rpgs to sell. Their upcoming games list is a Front Mission spin off, chocobos mystery dungeon, Babylons fall, the avengers project which is rumoured to be not coming to current gen hardware anymore and everything else is a port of older final fantasy games.

Personally i’m excited for left alive and crystal chronicles since its my favourite final fantasy game but beyond that there is a single platinum game outside of FFXIV getting an expansion that i find interesting.

I mean shit the fact that they are porting half the mainline FF library should show how much they trying to hit the whopper button and make some easy revenue. They have nothing else. No FFXVI, no DQXII theres no big square enix releases for most of the year and after the colossal failure of FFXV continuing the doomed trend of project fabula nova crystalis this is probably going to be an even worse year for them than 2018 if KH3 is counted as the end of 2018’s fiscal year in japan.

Hopefully this means more money put behind yoshidas team rather than panic funnelling it all to nomura and the 7 remake since nomura seems to have burned most of his consumer goodwill and a lot of vocal final fantasy fans on social media seem to want him to take a quiet backseat for a while and give other folks a chance like Uematsu taking a break for his illness and saying ‘just let soken do the Shadowbringers theme, i believe hes got the vision for it’.

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Rheem Octuris

Well, I’m looking forward to the NA release of Dragon Quest Builder 2, and I really wish they’re port over Itadaki Street / Fortune Street (the 30th Anniversary one that came out last year for PS4)

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Daniel Miller

They have ton of ip titles. Fk squsre. 7se those enix okd school titles. Bring them tonpc, make seausls.

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Schmidt.Capela

Yep. Among the series Square controls that I would purchase for the PC (as long as they don’t have Denuvo, which Square is adding to all their big new releases):

– Proper ports of Seiken Densetsu games, ones that at least don’t do the same error of the recent Secret of Mana port in having gameplay worse than the original. In particular Seiken Densetsu 3, the best in the series and that never had an official English language release.
– Kingdom Hearts, any/all of them.
– Final Fantasy Tactics; it would be vastly more enjoyable in high resolution with proper mouse controls, after all.
– Ogre Battle, for the same reason as FFT.
– Front Mission; same deal as Final Fantasy Tactics for the strategy ones, but I would also love to see Gun Hazard get an official translation.
– Kiki Kaikai, AKA Pocky & Rocky.
– Lufia.
– SaGa.
– The other Star Ocean games that never had a PC port.
– Valkyrie Profile.

And I’m sure they have other games I would be interested in. In many cases even a direct port, identical to the original, would interest me; I do have,and play, the full SEGA Mega Drive and Genesis collection on Steam, after all.

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Vincent Clark

If the loss generated by FFXV means they divert even more resources to FFXIV, I’m all for it.

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Utakata

:(

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Sorenthaz

Oh they’re definitely going to improve with Kingdom Hearts 3 being a huge seller.

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Danny Smith

It may sell well but its still going to be counted for the 2018 fiscal year, in japan the 2019 fiscal year doesn’t start till March, kingdom hearts first two months of sales wont be counted as profit for this year and thats probably going to be most of its revenue unless it gets dlc out the ass.

..Its probably going to get dlc out the ass.

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Sorrior

Honestly i feel like SE needs to embrace the old school and focus more on jrpgs and not just FF but say the Bravely Default games abd okd style jrpgs.

Also they need to put the game first not just the graphics. Plenty will pay for smaller sprite based games or simpler graphics if the story and world are good.

Also hit up the nostalgia train bring back the fantasy to final fantasy(yes i know of the yoshi p interview) bring back crystals, evil empires and a whole damn world to explore with hidden secrets all over.

Focus on the characters and there world more

Bring in the job system again

Stop remaking the wheen for the sake of it.

Feels like alot of these companies just keep forgetting HOW they got so big and stop focusing on there strengths.

Blizzard took ages to make a game but made high quality ones. So people waited and bought them. Rushing and pushing the pkaytime metric goes against what made them and wow so great(and fun)

EA and activision both need to learn to let a company make games and not just shutter tgem right away or give them projects that don’t work wrll for said companies skillsets

Se needs to return to there roots as i said above

Bethesda needs to remember why people play elder scrolls like games and it is for the world and frankly mods.

Bioware should be allowed to embrace there rpg origibs

Buut sadly i do suspect alot of the old great companies will lose relevance soon and new ones will take there place see larion with divinity taking over for bethesda in the crpg field and cdpr in many ways covering the wrpg

New companies ARE already rising and it is just sad to see these old greats losing there way to investor greed

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Armsbend

With 15 failing so badly I suspect they don’t really know what to do next. With SE fully transitioned into a FF milking machine, rather than a new IP making machine they used to (think the TWEWY era), they don’t have much.

Superheroes dressed at 17th Century Venetians finally got old I suppose.

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Danny Smith

Yoshida and a few other higher up FF devs have shown an interest in a hard fantasy FF game with no machines at all in the future. Something blending Fire Emblem and Demons Souls and honestly turn based or not a tactics style low fantasy FF game could be the pallett cleanser the franchise needs before getting super experimental.

Or just give 16 to Yoko Taro and let him go nuts, at this point his name is almost as strong a selling point as Kojima’s.