The home of Final Fantasy has been sailing some rocky fiscal seas recently. As multiple outlets reported this past week, Square-Enix has seen its stock value plummet by almost $2B since it released Final Fantasy XVI, with its share price dropping by 28% to its lowest point since the year began. This has had a domino effect for the company, including several analysts cutting their price target for the publisher/developer and a long-term investor reducing its holdings.
Multiple factors are at play in this decline for the company, most of which involve sales targets for recently released games not being met, specifically in the case of both FFXVI and the RPG Forspoken. That’s to say nothing of the company’s other projects crumbling after release, such as Marvel’s Avengers, which is going dark this fall; the recently shuttered Babylon’s Fall; and the end for a pair of mobile games – all while Squeenix is still surging forward on various NFT–focused plans.
The company’s failed releases are also being attributed to a poorly built game project management structure, which was described by current and former employees speaking with Bloomberg as “a single producer’s fiefdom,” with a lack of team structure and proper documentation to better organize development and an overall “ad hoc process where project goals can shift without warning,” though at least one contractor also claims that the approach is being overhauled.
There’s also the consideration of unrealistic expectations from Square-Enix itself in terms of its sales targets: While FFXVI can generally be considered a success in terms of critical response from our own writers and the rest of the industry, its self-described underperformance underscores the company’s tendency to lean on a single game’s breakout sales to prop up the entire house of cards. This can most notably be seen with Final Fantasy XIV, which has saved Squeenix’s financial bacon several times, and now that the MMORPG won’t be seeing an expansion release until next summer, there’s no tree for Square-Enix to hide behind. Or to put it another way, Final Fantasy XVI did fine but failed to save SE from the failures of Avengers and Forspoken.