Square Enix expects “extraordinary loss” this fiscal year, CEO steps down

Square Enix have announced the resignation of their CEO, Yoichi Wada, following an earnings forecast that predicts the company will experience “extraordinary loss” this financial year. According to their consolidated results report, the company had expected to make profits of 3.5 billion yen (approx. £24.5 million) before the end of the financial year, this March 31st. That didn’t happen. Instead, Square Enix is now expected to report a loss of 13 billion yen (approx. £91 million).

According to the report, “The Company forecasts that actual business results from its Digital Entertainment Segment substantially fall below its plan primarily due to slow sales of major console game titles in North American and European markets.” Detailed sales breakdowns aren’t available, but while some of the low earnings will be from the Japanese console-only side of the business, no doubt their Western studios, recently responsible for Hitman: Absolution, Sleeping Dogs and Tomb Raider, have also underperformed.

In addition to Wada’s resignation, to be replaced by former company president Yosuke Matsuda, Square Enix are also planning a major restructure in “development policy, organizational structure, some business models, and others.” What the means in real terms – especially for upcoming projects like Eidos Montreal’s Thief – remains to be seen.

Square Enix announced a massive restructuring today, which included the dismissal of president Yoichi Wada, but we really hope the company takes a long look in the mirror about its sales projections. Buried within the briefing of the consolidated results forecast, the company had a slide expressing the "weak sales" of three of its games.

These allegedly anemic sales involve three games that will have sold millions of units by the end of the company's fiscal year on March 31. It seriously raises the question: how broken is Square Enix's business if Tomb Raider's expected 3.4 million units sold (not including digital distribution) is considered "weak?"

"Despite the high critical acclaim, [the games listed] failed to meet each target," the briefing notes. "In particular, North America sales force was ineffective, ending up with 2/3 of number of units sold in Europe."

Oddly – beyond this being a clear sign Square Enix North America is being thrown under the bus – this is the second time we've had to scratch our heads about Eidos/Square Enix sales projections. In 2009, the company was disappointed by the sales of Tomb Raider: Underworld, which launched in November and sold 1.5 million copies by the end of 2008. Soon after the publisher did a round of layoffs at Tomb Raider developer Crystal Dynamics.

AtrumX wrote:Yup, Airship FTW. And where's the massive, painful questing for chocobo stuff

AtrumX wrote:We should just start our own game company called SoftSquare and make real FF games again.