Square Enix have posted their report for the financial year just gone, and as expected, it does not make for happy reading.
Former president Yoichi Wada resigned his position earlier this year in response to the "extraordinary loss" that the company had made.
First, the good news. Square Enix did post an increase in net sales for this financial year, racking up ¥14.7 billion (£94m) for FY2013, up 15.7 per cent from the previous year's ¥12.7 billion.
But company-wide restructuring and spiralling costs have taken their toll. The company’s Digital Entertainment branch, responsible for games, saw a 99.7% decrease in operating income. Square Enix barely broke even, making ¥44 million (£282k) on sales of ¥89 billion. In contrast, FY2012 saw an operating income of ¥12 billion (£77m) on sales of ¥72 billion (£461m).
The explanation given in the report? Square Enix, much like Nintendo, are falling short in the West.
"During the fiscal year ended March 31, 2013, the Group’s operating income decreased significantly, primarily due to underperformance of major titles for consumer game consoles in North America and Europe."
Later on, the point is expanded upon, and it looks like Square Enix will be refocusing efforts on the PC, mobile, and tablet markets.
"In response to the latest environmental changes in the game industry, the Group has implemented various strategic initiatives such as a change in its development policy, organizational reforms and redesign of some business models," the report reads.
"The business environment surrounding the Group is in the midst of major changes, where smart devices such as smartphone and tablet PCs are spreading rapidly, while the console game markets in North America and Europe are increasingly competitive and oligopolistic."
The last point comes no doubt in partial reference to the demise of a long-standing, large publisher in the form of THQ, and the perception of a shrinking market in the console space. But there are precious few concrete suggestions for the year ahead, and the worry is that next-gen costs are likely to be even higher.