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Image credit: Square Enix
Square Enix has abandoned a number of in-development projects, resulting in a ¥22.1 bn (£112m) loss for the financial year.
The news was shared today in a Notification of Recognition of Extraordinary Losses to shareholders detailing a decision made back in March, as the company reviews its consolidated forecasts for the fiscal year ended March 2024.
These “content abandonment losses” are part of Square Enix president Takashi Kiryu’s streamlining of the company’s output of games, “with the intention of being more selective and focused in the allocation of development resources”.
The notice does not indicate which projects have been abandoned, or re-scoped.
Back in November, Kiryu stated in an investor Q&A the company needed to diversify its gaming output, but also focus on fewer releases.
“Because we possess strong IPs like the Dragon Quest and Final Fantasy franchises, I believe that we have tended to be overly reliant on certain gameplay styles or genres,” he said. “Meanwhile, the tastes of customers in the gaming market have diversified, and customers have come to enjoy content from a variety of genres.”
He added: “The market is increasingly polarised between blockbuster and indie titles, but I feel that we have developed many titles that fell somewhere in the middle. I want to make clearer distinctions going forward.”
Then, earlier this year, Kiryu announced Square Enix would review its development system to reduce outsourced development and focus on large-scale games developed in-house.
It’s clear this is now taking effect, with Kiryu taking drastic measures to achieve his goals. Losses now should result in improved profits down the line.
So far in 2024, Square Enix has released Final Fantasy 7 Rebirth, which is suspected to have underperformed, and Foamstars.
Final Fantasy 14 expansion Dawntrail is set to release in June, which is likely to be hugely popular.
