Square Enix Forecasts Massive Loss As President Departs

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Square Enix Forecasts Massive Loss As President Departs

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Yoichi Wada, former President and Representative Director, will be replaced by Yosuke Matsuda.

Square Enix, maker of Tomb Raider and Deus Ex among many other titles, has announced that it expects to make a significant loss for the fiscal year ending March 31, 2013. Its Digital Entertainment Segment is to blame; slow sales of major console titles in North America and Europe are the main reason why the loss - more than 10 billion ($106 million) in ordinary income before expenses and deductions - is expected to occur. Moreover there is an extraordinary loss on top of the projected profit bombshell: what Square describes as a "loss on disposal of content" and "loss on evaluation of content" will account for a further 10 million loss. The extraordinary loss is part of a general restructuring at Square, which it describes as "major reforms" needed to revamp its business, in light of the rapidly changing games market.

Yoichi Wada is no longer President and Representative Director of Square Enix, though this board change awaits formal confirmation at the 33rd annual general meeting of shareholders. His replacement is Yosuke Matsuda, who currently holds the title Representative Director, and has in the past acted as Square's Director and CFO.

Back in 2011, Wada claimed that "our game development has become weaker than expected," and predicted that revamping it would take one or two years. Poor internal communication and inefficient work practices were said, at the time, to be the root causes of Square's problems.

In 2012, Square posted a 6 billion ($63.6 million) profit, thanks in no small part to Deus Ex. While Tomb Raider sales have been doing very well, it evidently wasn't enough to salvage Square Enix's bottom line.

Source: Square Enix's Profit Announcement, Wada Announcement

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Square Enix did not "make" Tomb Raider or Deus Ex. Credit to where credit is due.

Bah, that's all we need. The publisher of two of the best games in recent years with financial issues.

Although at least the losses are down to a shift in the business model, rather than the games themselves. Hopefully it won't affect potential sequels to Deus Ex and Tomb Raider.

MadBlueWinnie:
Square Enix did not "make" Tomb Raider or Deus Ex. Credit to where credit is due.

True, but they published them, and they assumed the risks/claim the rewards.

MadBlueWinnie:
Square Enix did not "make" Tomb Raider or Deus Ex. Credit to where credit is due.

I think he's referring to the reboots.

OT: I guarantee they will make back a huge portion of the sales once Kingdom Hearts HD 1.5 ReMix is finished being localized in Q4 of this year. I already have a copy, hooray for imports, and it is pretty good. They'd also make more sales if they'd release KH3 already. >.<

Neronium:

MadBlueWinnie:
Square Enix did not "make" Tomb Raider or Deus Ex. Credit to where credit is due.

I think he's referring to the reboots.

Which they did not make either. Crystal Dynamics and Eidos did.

Square-Enix ponied up the cash for those games, but that doesn't mean they should get the credit for making them.

j-e-f-f-e-r-s:

Neronium:

MadBlueWinnie:
Square Enix did not "make" Tomb Raider or Deus Ex. Credit to where credit is due.

I think he's referring to the reboots.

Which they did not make either. Crystal Dynamics and Eidos did.

Square-Enix ponied up the cash for those games, but that doesn't mean they should get the credit for making them.

But Square Enix owns them and published the games so they get most of the credit. It shouldn't be that way but that's usually how it is.

That's a wada money.
Might wanna reconsider leasing out the Luminous Engine.

So March is officially "Fire your CEO Month" for the game industry?

Talk about spring cleaning.

If only they'd spent more money on the graphics this wouldn't have happened.

Wada mistake he made.

j-e-f-f-e-r-s:

Neronium:

MadBlueWinnie:
Square Enix did not "make" Tomb Raider or Deus Ex. Credit to where credit is due.

I think he's referring to the reboots.

Which they did not make either. Crystal Dynamics and Eidos did.

Square-Enix ponied up the cash for those games, but that doesn't mean they should get the credit for making them.

I'm all about giving credit where credit is due and obviously the developers made them and not the publisher. But the publisher deserves credit for green lighting and paying for those games to be made. Neither was cheap or quick, they were the result of hard work by a lot of people and also the result of a big risk by the publisher.

OT: That is a darn shame. Lacking the discussion of any of their internal studios or Japanese based studios is a strange thing. It's not like those games were the only ones taking money from the publisher, but it does look like they were the only ones making money.

Neronium:

j-e-f-f-e-r-s:

Neronium:

I think he's referring to the reboots.

Which they did not make either. Crystal Dynamics and Eidos did.

Square-Enix ponied up the cash for those games, but that doesn't mean they should get the credit for making them.

But Square Enix owns them and published the games so they get most of the credit. It shouldn't be that way but that's usually how it is.

He means they had nothing to do with the original IP creation.

Yoichi Wada was actually a pretty good CEO and I'm kind of sad to see him go. The weak game development and poor communication aren't necessarily his doing, and it's thanks in part to him that Final Fantasy XIV ARR is actually happening (heck, most of the western development world would have scrapped FFXIV or made it a free to play game.) On the upside, the restructuring will likely mean they will more efficiently get out the games they have promised over the last few years, including Kingdom Hearts 3 and Final Fantasy XIII Vs. Let's just hope this doesn't turn into another Electronic Arts situation.

Square Enix is a good publisher. I hope that doesn't change.

I'm actually kind of sorry to hear this. Aside from some bumbling with the Final Fantasy franchise (which doesn't really affect me one way or another), it seems like S-E has been one of the more admirable publishers of late.

So crapping out halfassed Final Fantasy titles has nothing to do with it?

MadBlueWinnie:
Square Enix did not "make" Tomb Raider or Deus Ex. Credit to where credit is due.

No, but they funded, marketed and distributed it. Credit to where credit is due.

First John Riccitiello, now Yoichi Wada and next Saturu Iwata.

Adam Jensen:
Square Enix is a good publisher. I hope that doesn't change.

Colt47:
Yoichi Wada was actually a pretty good CEO and I'm kind of sad to see him go. The weak game development and poor communication aren't necessarily his doing, and it's thanks in part to him that Final Fantasy XIV ARR is actually happening (heck, most of the western development world would have scrapped FFXIV or made it a free to play game.) On the upside, the restructuring will likely mean they will more efficiently get out the games they have promised over the last few years, including Kingdom Hearts 3 and Final Fantasy XIII Vs. Let's just hope this doesn't turn into another Electronic Arts situation.

Well yes. But I am willing to bet that FF XIV is one of the huge bleeding wounds that make up that $106 million loss. From a business standpoint they should have really killed it.

Baresark:

j-e-f-f-e-r-s:

Neronium:

I think he's referring to the reboots.

Which they did not make either. Crystal Dynamics and Eidos did.

Square-Enix ponied up the cash for those games, but that doesn't mean they should get the credit for making them.

I'm all about giving credit where credit is due and obviously the developers made them and not the publisher. But the publisher deserves credit for green lighting and paying for those games to be made. Neither was cheap or quick, they were the result of hard work by a lot of people and also the result of a big risk by the publisher.

So yeah, they published it, so the article should say "publisher of Tomb Raider and Deus Ex" and not makers of.

Different words have different meanings, use them correctly if its in a news article

Final Fantasy is No Longer an Event


With XIII's subsequent installments launching within a year or two of each other, it's hard not to make comparisons to other rushed projects across the industry, and that have deflated once unique IP's -- Assassin's Creed comes to mind. Not to mention all of the multi-platform remakes that are hard to follow because of shallow marketing. It's become quite easy to forget about this series.

There's nothing (dare I say) enchanting about a Final Fantasy anymore.

A real shame. I suppose this means the potential for a sequel to Sleeping Dogs is declining rapidly.

josemlopes:

So yeah, they published it, so the article should say "publisher of Tomb Raider and Deus Ex" and not makers of.

Different words have different meanings, use them correctly if its in a news article

No, they're using the words right. Crystal Dynamics is owned by Eidos Interactive and Eidos Interactive is owned by Square Enix.

Eidos Interactive's actual name is Square Enix Europe; but they put Eidos on the box to draw in fans of the now-dead company.

So, the games are owned, financed, developed, and published exclusively by Square Enix.

Edit: Isn't navigating corporate shell games fun?

Ah that sucks. I hope this doesn't mean that Square's publishing policies will change. They've been doing a great job as publishers and have released some of my favorite games in the past few years.
I know that FFXIII got a lot of negative critique but did it do bad? I have the feeling that despite that it still sold alright. FFXIV on the other hand cost them probably a lot of money.

As long as they don't go under, it'll be alright. Squeenix may have churned out several duds lately, but the ones that do succeed have been very good. It's a publisher with potential that only needs to get its shit together to shine once again.

Square-Enix has totally lost the plot, the only things they've done right recently is buyout UK studios and IPs and let them make good games which is a damn sight better than EA or Activ would have done with EIDOS. (SEGA are doing a similar thing with their UK IPs and making lots of money)

They really need to get a grip on their in house IPs because as far as the west is concerned the shit they've localised is a large reason JRPGS had such a bad rep with mainstream western gamers. It's only recently that the genre is beginning to turn itself around as ppl discover that SquareEnix aren't the only ppl making JRPGs.

Anyway I'm curious as to which direction the new CEO will take. Will they give us quality JRPGs like type-o or will they get greedy and milk their EIDOS IPs.

worldfest:

Final Fantasy is No Longer an Event


With XIII's subsequent installments launching within a year or two of each other, it's hard not to make comparisons to other rushed projects across the industry, and that have deflated once unique IP's -- Assassin's Creed comes to mind. Not to mention all of the multi-platform remakes that are hard to follow because of shallow marketing. It's become quite easy to forget about this series.

There's nothing (dare I say) enchanting about a Final Fantasy anymore.

During the height of popularity for the series there were releases every year or two.

10 years ago, I might be saddened by news like this. But now I'm just jaded. The lack of games that felt like true Square titles this generation can only make me say that they deserve the loss.

Beryl77:
Ah that sucks. I hope this doesn't mean that Square's publishing policies will change. They've been doing a great job as publishers and have released some of my favorite games in the past few years.
I know that FFXIII got a lot of negative critique but did it do bad? I have the feeling that despite that it still sold alright. FFXIV on the other hand cost them probably a lot of money.

FF13 sold decently for a Final Fantasy game, on par with other games. But, well, you can't like or dislike a game until you've played it, right? I bought a copy too, as millions of people did, and many people were disappointed, which is why FF13-2 sales were roughly only 40% of what FF13's was.

This news just proves that Square Enix's business side is run by monkeys. There's so much WRONG here that I don't even know if I can point it all out, or if it's WORTH pointing out.

1) They don't include digital sales?! This is the year 2013! A HEAVY portion of people buy their games from Steam or Origin or any other digital distributor offering the title! Not including those as part of the sales numbers is a disservice to the game. Get with the modern century, Square!

2) 1.7 million for Sleeping Dogs is INCREDIBLY good for a brand new IP in a sea of sequels and established franchises. That's comparable to other original games at the time of their release, such as Bioshock, Borderlands, Dishonored, Alan Wake, Darksiders, Dead Space, and others. They're insane to expect a brand new franchise to sell as well as an established brand has on its first try. 1.7 million is something they should be PROUD of.

3) The new Tomb Raider is barely a month old and it's already sold 3.4 million copies! It broke the franchise record for the best-selling entry in the franchise thus far (it's tracking ahead of all the other games in the franchise... including Tomb Raider II, the 4th best selling Playstation game of ALL TIME), AND it's the best selling game of 2013 thus far. In what bizarro universe is THAT quite literally called a sales FLOP that fails to meet expectations?

4) Square Enix blames "North America" for only selling 2/3rds as much as Europe... despite that fact that Europe is still bigger. And that's still not giving them credit since some of those millions of sales of their games came from the North American market (while the JAPANESE market was vastly undersold copies).

5) I don't see Square Enix talking about their OWN massive financial blunders lately... You know, the money sink that was and is Final Fantasy XIV, the utter lack of any localization for games people want (how's Type-0 treating you all?), the lack of any sequels to games we actually want or ask for (The World Ends With You, Kingdom Hearts, Chrono Trigger, and Vagrant Story say hi), the continued dependance on the FF13 brand (for the last damn time, NO, I don't care about Lightning. She wasn't even the main character of FF13!), and their overblown budgets and development time (there's NO WAY FF Versus XIII, if it even exists still, will ever make a profit).

6) Square has been butchering games and diluting brands for awhile now. Their insanely overpriced, poorly made, lazy iOS games have done nothing but tarnish their brands and infuriate customers.

7) From what I can tell, almost everything wrong with Square Enix is from their own Japanese branch, while the western branches pumping out critically AND commercially successful games like Deus Ex, Tomb Raider, Hitman, and Sleeping Dogs just aren't enough to balance out their own internal mistakes... but rather than single them out as successes in a sea of failures, they BLAME the few successful games they do have while continuing to talk about how much better FF14 is going to be soon...

8) Here's a thought, Square: your expectations are unreasonable, you're disconnected from your fans, the current financial crisis, gaming trends, and any semblance of reality, and you keep blaming others for your own misgivings and failings. The best stuff you have going right now is the very games you threw under the bus and blamed for your financial woes; not, like, your irresponsible spending, directionless leadership and game development, painful franchise fatigue with diminishing quality, lazy and greedy iOS money grabs, NOT releasing entire games outside of Japan, not releasing games announced over 6 years ago at all, and your insatiable need to chase after the next shiny technology rather than focus on the guts of good game design.

Seriously, there is no semblance of reality in their expectations. When a game can come out, be the best selling game of the year thus far, track better than all other games in its franchise, get universal critical praise from everyone who plays it, and it's the best selling game Square has released in YEARS, and it STILL somehow "fails to meet expectations", THEY are doing something wrong, not the people who did their damn job and made an awesome, best-selling game.

Crono1973:

worldfest:

Final Fantasy is No Longer an Event


With XIII's subsequent installments launching within a year or two of each other, it's hard not to make comparisons to other rushed projects across the industry, and that have deflated once unique IP's -- Assassin's Creed comes to mind. Not to mention all of the multi-platform remakes that are hard to follow because of shallow marketing. It's become quite easy to forget about this series.

There's nothing (dare I say) enchanting about a Final Fantasy anymore.

During the height of popularity for the series there were releases every year or two.

Maybe so. I think 2 years is plenty of time to build anticipation.

But that's not modern Square. There have been over FIFTY(!) Final Fantasy games, sequels, spin-offs, re-releases, ports, tie-ins, and expansions within the past decade and a half. That's beyond excessive, beyond extreme. Square was never averse to porting a game or two, or doing the occasional spin-off in the past, but it's gotten wildly out of control. Nobody can keep franchise fatigue away with that many games clogging up the market.

First of all, if you are to mention games from square, for the love of god name Final Fantasy. It's like their biggest thing.

That being said, they should make a good FF game again, it would really help them out. Maybe not so much focus on graphics this time? =)

You want to suffer fewer losses Square? Here's a tip, cancel Final Fantasy XIII-Versus already, that's been in the works for EIGHT YEARS now and no sign of a release date yet. It should've been cancelled three years ago, instead it just keeps on eating money with no returns at all. Gahdammit.

Trishbot:

Beryl77:
Ah that sucks. I hope this doesn't mean that Square's publishing policies will change. They've been doing a great job as publishers and have released some of my favorite games in the past few years.
I know that FFXIII got a lot of negative critique but did it do bad? I have the feeling that despite that it still sold alright. FFXIV on the other hand cost them probably a lot of money.

FF13 sold decently for a Final Fantasy game, on par with other games. But, well, you can't like or dislike a game until you've played it, right? I bought a copy too, as millions of people did, and many people were disappointed, which is why FF13-2 sales were roughly only 40% of what FF13's was.

This news just proves that Square Enix's business side is run by monkeys. There's so much WRONG here that I don't even know if I can point it all out, or if it's WORTH pointing out.

1) They don't include digital sales?! This is the year 2013! A HEAVY portion of people buy their games from Steam or Origin or any other digital distributor offering the title! Not including those as part of the sales numbers is a disservice to the game. Get with the modern century, Square!

2) 1.7 million for Sleeping Dogs is INCREDIBLY good for a brand new IP in a sea of sequels and established franchises. That's comparable to other original games at the time of their release, such as Bioshock, Borderlands, Dishonored, Alan Wake, Darksiders, Dead Space, and others. They're insane to expect a brand new franchise to sell as well as an established brand has on its first try. 1.7 million is something they should be PROUD of.

3) The new Tomb Raider is barely a month old and it's already sold 3.4 million copies! It broke the franchise record for the best-selling entry in the franchise thus far (it's tracking ahead of all the other games in the franchise... including Tomb Raider II, the 4th best selling Playstation game of ALL TIME), AND it's the best selling game of 2013 thus far. In what bizarro universe is THAT quite literally called a sales FLOP that fails to meet expectations?

4) Square Enix blames "North America" for only selling 2/3rds as much as Europe... despite that fact that Europe is still bigger. And that's still not giving them credit since some of those millions of sales of their games came from the North American market (while the JAPANESE market was vastly undersold copies).

5) I don't see Square Enix talking about their OWN massive financial blunders lately... You know, the money sink that was and is Final Fantasy XIV, the utter lack of any localization for games people want (how's Type-0 treating you all?), the lack of any sequels to games we actually want or ask for (The World Ends With You, Kingdom Hearts, Chrono Trigger, and Vagrant Story say hi), the continued dependance on the FF13 brand (for the last damn time, NO, I don't care about Lightning. She wasn't even the main character of FF13!), and their overblown budgets and development time (there's NO WAY FF Versus XIII, if it even exists still, will ever make a profit).

6) Square has been butchering games and diluting brands for awhile now. Their insanely overpriced, poorly made, lazy iOS games have done nothing but tarnish their brands and infuriate customers.

7) From what I can tell, almost everything wrong with Square Enix is from their own Japanese branch, while the western branches pumping out critically AND commercially successful games like Deus Ex, Tomb Raider, Hitman, and Sleeping Dogs just aren't enough to balance out their own internal mistakes... but rather than single them out as successes in a sea of failures, they BLAME the few successful games they do have while continuing to talk about how much better FF14 is going to be soon...

8) Here's a thought, Square: your expectations are unreasonable, you're disconnected from your fans, the current financial crisis, gaming trends, and any semblance of reality, and you keep blaming others for your own misgivings and failings. The best stuff you have going right now is the very games you threw under the bus and blamed for your financial woes; not, like, your irresponsible spending, directionless leadership and game development, painful franchise fatigue with diminishing quality, lazy and greedy iOS money grabs, NOT releasing entire games outside of Japan, not releasing games announced over 6 years ago at all, and your insatiable need to chase after the next shiny technology rather than focus on the guts of good game design.

Seriously, there is no semblance of reality in their expectations. When a game can come out, be the best selling game of the year thus far, track better than all other games in its franchise, get universal critical praise from everyone who plays it, and it's the best selling game Square has released in YEARS, and it STILL somehow "fails to meet expectations", THEY are doing something wrong, not the people who did their damn job and made an awesome, best-selling game.

Damn it doesn't happen often but you took ALL of the words I was going to say out of my mouth!Bravo to you and shame on SE for their transgressions.

I'm sad to hear that Square are in such dire straits. But I'm not surprised, Deux Ex: HR is the only thing they've released in recent years that I found worth playing.

That said I will be pissed off if their issues prevent the release of a sequal to Deus Ex: HR or the movie that's been in the news a few times.

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