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The Japanese video game publisher Square Enix announces a $140 million hit as it revises its approach to the development of future games and links the staggering amount to the stoppage of certain productions.
A ‘Notification of Recognition of Extraordinary Losses’ has been published by the developers of the hit franchise Final Fantasy. This says “The Company expects to recognize approximately ¥22.1 billion in content abandonment losses on its books for the fiscal year ended March 2024.”
A meeting was held on March 27, 2024, involving the Board of Directors where a vote was passed on a “myriad” of changes in the environment surrounding the Group.
It notes how the Group has taken a revised approach “to the development of high-definition (HD) games to be more selective and focused in the allocation of development resources.”
Square Enix hasn’t made it known which games or in-development titles have been canceled or rescoped.
This news comes after the President of the company, Ryuji Kiryu, was said to be undertaking a drastic review of the development system in February.
Bloomberg reported that the president made a statement on February 5 at the financial results briefing to analysts where he allegedly announced: “We are reviewing what the organizational system that embodies the contents of the pipeline is and what is best on a zero basis.”
Square Enix sales almost flat despite launching new titles
On February 5, Square Enix released its financial earnings for the nine months of the fiscal year that ended on December 31, 2023.
The net sales were ¥257.6 billion ($1.7 billion) which represents a 1% increase year-on-year, meanwhile, profit stood at ¥26.8 billion ($180 million). The profit was down 42% year-on-year and Digital Entertainment net sales were down 2.5%.
Since the release, Foamstars launched a day later but sale figures are not yet known for this game. The next installment of the Final Fantasy 7 remake, Final Fantasy 7 Rebirth, was also released on February 29.
While official figures haven’t been published, rumors suggest that Final Fantasy 7 Rebirth isn’t selling nearly as well as the first game in the reboot series.
As for Foamstars, this title has seen a nosedive in player count just two months after launch. A 54% decline in the PlayStation player base was noted within two weeks of launch.
Featured Image: Photo by Sven Piper on Unsplash
