Slow Western Sales To Blame
Squeenix top dog Yoichi Wada has resigned his post in response to the latest financial forecast, which heralds an "extraordinary loss" for the company.
The report, which you can read right here, is entitled "Announcement of Revisions to Consolidated Results Forecasts and Expected Extraordinary Loss."
Which, frankly, says it all.
Net sales projections have been slightly dinged from 150 to 145 billion Yen, but the forecast radically increases net loss from 3.5 billion to a monstrous ¥13 billion. This massive deficit has been laid at the feet of "slow sales of major console game titles in North American and European markets", as well as major restructuring and sluggish performance of their arcade division.
Square has also offloaded their free to play titles according to a new report from VentureBeat.
It's unclear which Western console releases are to blame, but Square has been desperate to practically give Hitman: Absolution and Sleeping Dogs away recently. It's likely that Final Fantasy XIII-2 has also come in well under projections, though Tomb Raider is proving to be a massive sales smash. The fact that we're at the end of a console generation, not to mention deep in recession, will also make even their biggest successes much smaller than the enormous blockbusters of half a decade ago.
As always, the spiralling costs involved with developing, marketing and distributing a AAA game will be eating into their bottom line, despite the resulting chart positions.
Square Enix president Yoichi Wada has fallen on his sword, resigning his position ahead of a reshuffle in June. Representative director Yosuke Matsuda is currently expected to assume the role.
With EA having recently shed its leadership in the face of several under-performing games, it's clear that the biggest triple-A publishers have to start truly innovating rather than squeezing gamers for pre-order pennies. We hope that this latest report will light a fire under Square Enix going forward.