Financial Woes for Square Enix

Saw a discussion on ffxiah.com and thought I'd bring it up here. Whether you like the direction Square Enix has taken in the past couple years or not, it's become increasingly clear that it's not financially viable. Square Enix announced on their corporate website today a 91.7% decrease in expected earnings for fiscal year. This appears to be due to disappointing sales for multiple titles (most significantly Final Fantasy XIV), delays for the PS3 version of FFXIV and also Deus Ex: Human Revolution.

The net worth of Square Enix has been in decline the past two years, and has taken a drastic fall in the past six months since Final Fantasy XIV's release:
http://jaerik.tatersalad.org/images/...tockplunge.jpg
The brief increase before a major release followed by a sharp decline after a disappointing showing has become commonplace for Square Enix releases, and now it's reaching a low not seen since the drastic failure of The Spirits Within. For those interested, below is the stock value for a little over the past two years:
http://jaerik.tatersalad.org/images/squareenix2year.jpg

Before today's news, we learned that a majority of the development team for Final Fantasy XIV had been sacked. While I do think that a good deal of FFXIV's failure was due to the development team's inability to learn from the mistakes of FFXIV and that Tanaka did certainly share a deal of the blame, I think equally culpable are the Square Enix executives who likely pushed a release ahead of a reasonable time schedule.

Given the recent thread discussing the possibility that Square Enix should cooperate with a western developer to make the a Final Fantasy title, it's clear that many people feel like something needs to change, and the stock plummet which occurred as a result of today may be a catalyst to that change. Money talks. When Final Fantasy XIII was released, Wada apologized to fans who were disappointed with the title while still remarking on the game's fiscal success. Without that fiscal success to fall back on, what can we expect to happen in Square Enix's corporate structure?

How long until Wada has to resign in shame for running the company into the ground?

The Deus Ex delay absolutely gutted me yesterday. As far as gaming goes, it was basically the centerpiece of my 2011 (Skyrim doesn't come out until November and will no doubt get delayed anyway). Without DX, the whole year seems a whole lot emptier. Dragon Age II bleh. :eep:

And I disagree that SE needs to work with a Western developer to get Final Fantasy back on track. Given recent gaming trends, I doubt a Western developer would be able to set FF straight (straight enough for us FF fans, that is). No, Square just need to either get some talent in the helm or hand it off to a company that still knows how to make a solid JRPG. I haven't played many JRPGs in the last few years and am kind of out of the loop, but developer Level 5 comes to mind and would probably be do a good job. Dragon Quest VIII was effing glorious.

I only brought up the discussion about a western developer working on Final Fantasy as an example of how desperate fans have become for some change. I don't necessarily agree that it's a particularly good idea either.

There's another topic going on about how Square refuses to put up most of their games on PSN for English audiences. English translated games. That they just have to turn into a digital copy that people can pay for and download. Not like making a whole new game. Its almost free money. Square makes some dumb decisions. So its really their own fault half the time and I find it hard to feel sorry for them. Maybe the execs should get a clue at some point

It is all about 3rd, KH PSP FM, Dissidia012, Nomura is carrying the entire the entire fiscal year again.

Except those titles aren't part of the fiscal year in question. That's all in the next fiscal year, and I don't see any of them (especially Birth by Sleep Final Mix which will never be released outside of Japan) carrying significant weight. Square Enix needs Versus XIII to be a success. If they can manage to turn Final Fantasy XIV around for a successful PS3 launch, they have a chance of salvaging that game. A successful MMO is a cash cow if there ever was one, even just moderately successful ones with a loyal fanbase like Final Fantasy XI was.

I do think this downward trend is definitely indicative of a necessity for a change in Square Enix's corporate culture. They're constantly remaking older titles for relatively small profits while their attempts at new IPs (Infinite Undiscovery, The Last Remnant) fail dismally. Both Final Fantasy XIII and Final Fantasy XIV have spurned public acknowledgments from Wada as disappointing to fans. They're doing relatively successfully as a publisher, but as a developer they're quickly losing steam.

I'd be more interested in how their cash flow and profit margins are looking as a measure of their financial health rather than how their stock price is doing. It's entirely probable that they could have tons of cash to carry them for a while but investors are simply panicked by some major title delays and some disappointing releases. Not to say the falling stock price doesn't indicate that there's a problem or to imply I don't personally believe they need to get their :bou::bou::bou::bou: together. Just saying that financially they may be ok in the long run but are just going to have a hurting bottom line this year.

Aside from Final Fantasy XIV, their titles are typically financial successes. Such a significant drop in stock value over such a sustained period of time is not a positive outlook for the company, however, and such a dramatic decrease will have consequences for a company as a whole even if their bottom line is in the green.

stock value = fantasy value. Stock trading has never been about common sense and rational decisions.

doesn't matter anyway, if they didn't screw up like they did by taking FF fans for granted and releasing subpar products they wouldn't be in this position. Maybe they'll learn something out of it.

Yes, stock value is about faith, but when the outside world has lower faith in your company it's never a good sign.

Hopefully this will be the wake up call SE needs to produce products akin to what they have done in the past. Their games are still pretty good, but I feel they are no where near the epicness that they once were. Some of this is a matter of opinion, but when a lot of others share this opinion it speaks volumes.

Excluding the artsy magical side of things, wouldn't it make more business sense to now play it safer than ever? It wouldn't surprise me if Square just gets worse because of this, trying to make the investors feel more secure by taking less risks.. Though I guess the changes and risks they've been taking have been part of the problem

If games like FFVI and FFIX are 'playing it safe' then by all means. :D

Definitely. Let's hope that's how they see it haha

Share values do fluctuate wildly, but there is a clear decline in the value of the share over the past several years. I think investors are worrying about the value of cash flows now that XI is falling off and XIV is not ideal - which are continuous cash flows unlike other normal games. Although MMOs are also quite costly to maintain, so it's not just pure profit.

I think Square-Enix should return to the roots of game making. Wada has seemingly become more focused on what the West/target markets want from games and the executives have forced this down on the creatives.

What they need to do is start off with a clear vision in terms of style, gameplay and story, and develop the game from that. Yes, you can take aspects of what has worked around the world, but it must end up as something cohesive. I think the executives are putting other focuses and interfering with the productive process, to the detriment of the game.

XIII redeemed itself somehow - in my mind at least - although it had definite room for improvement. But XIV has been an unmitigated disaster and that is mainly because it was released way ahead of schedule. The executives must be praying that the developers are able to get it together before the PS3 release, otherwise they are going to be sacked at the next shareholders meeting.

But I think becoming Western is the problem with not only Square-Enix, but Japanese companies in general. There have been some very good Japanese games in this development cycle (Metal Gear Solid, Valkyria Chronicles and Yakuza) spring to mind), but the majority have ranged from average to good (excluding the beat 'em ups which still remains a Japanese staple). And they are fairly Japanese in character (even MGS has its Japanese quirks). So, maybe developers should focus on being a modern Japanese developer instead of trying to copy the old-school JRPGs that were successful or try become Western.

That is a bit of a rant. Apologies.

they wish they were becoming "Western". At least we'd have some goddamn interactivity if that were the case. The problem is that them japanese don't know how to innovate and stick to the old ways of "bit of gameplay here followed by a smurfload of cutscene".

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Originally Posted by kotora

they wish they were becoming "Western". At least we'd have some goddamn interactivity if that were the case. The problem is that them japanese don't know how to innovate and stick to the old ways of "bit of gameplay here followed by a smurfload of cutscene".

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Not that I've played Yakuza, but that doesn't seem to fit it. And I don't think Valykria Chronicles was like that either. MGS, okay fair enough it did, but they were fairly epic and the basic gameplay was interesting.

And certain Japanese developers are clearly getting it right in the RPG genre. Valkyria Chronicles I already mentioned. Demon Souls is another one. Neither is a traditional old-school JRPG, nor is it a fully-blown Western adventure either.

I think XIII was going down the right track. It made battles quick and exciting. The majority of its characters were more 3-dimensional than in previous FFs outside of the major character/s. What it did wrong is it stripped down too much. People like RPGs to tinker, which was basically not happening in XIII. The battle system probably erred towards to too little control. The world was too stripped down and linear. Why? Probably because it got rushed at the end and was too determined by the results of focus groups.

It would appear that the same thing has happened with XIV. There were a lot of ideas that obviously came through but they couldn't be implemented. So yes, the corporates have clearly interfered too much.

I am very curious to see Versus XIII. Nomura would probably not allow any interference in his work from those above him, and they would have to deal as he is too important and influential in the company. And I'd like to see what the creatives at Square-Enix can produce without too much interference from upstairs.

There also seems to be a lack of polish in Japanese games these days too. Gran Turismo 5 is a case in point. Brilliant gameplay dynamics but horrible to actually set up a race.

I had read about this in a magazine. I was surprised to hear a number that large for a drop. I also felt XIV was going to be received bad, but I didn't think it was going to have done that badly for them.

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There's another topic going on about how Square refuses to put up most of their games on PSN for English audiences. English translated games. That they just have to turn into a digital copy that people can pay for and download. Not like making a whole new game. Its almost free money. Square makes some dumb decisions. So its really their own fault half the time and I find it hard to feel sorry for them. Maybe the execs should get a clue at some point

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I very much agree with this. Where's my Threads of Fate?

I think it's just SE keeps delaying their games. If they made them faster they wouldn't need to pay several months salary for a team working on one of their games, which, I assume is a lot of money.

As for PSN, we don't even have FFT on there in Europe/UK as well as a load of other games.

Unfortunately you reap what you sow. I was defending them back then but this really all started with X-2, making millions of Kingdom Hearts spinoffs on handheld, and letting a lot of great talent go, or be freelance. I also think the deal they announced at E3 2008 caused them to release a lot of games on a console where their base simply is non-existent, and gamers lost interest in them in general. People moved on to other franchises, and truly innovative JRPG's came out from other studios. I could go on and on about things they should do (giving Final Fantasy to a Western developer ISN'T one of them) but I just don't see a good outlook for SE.

I really, really hope Versus XIII comes out before the company folds. Because that could be a real possibility. Gran Turismo's out, Duke Nukem's coming out, it would be a shame to see Versus XIII not make it.

I don't think SE is going to fold any time soon. :p

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Originally Posted by Ouch!

Saw a discussion on ffxiah.com and thought I'd bring it up here. Whether you like the direction Square Enix has taken in the past couple years or not, it's become increasingly clear that it's not financially viable. Square Enix announced on their corporate website today a 91.7% decrease in expected earnings for fiscal year. This appears to be due to disappointing sales for multiple titles (most significantly Final Fantasy XIV), delays for the PS3 version of FFXIV and also Deus Ex: Human Revolution.

The net worth of Square Enix has been in decline the past two years, and has taken a drastic fall in the past six months since Final Fantasy XIV's release:
http://jaerik.tatersalad.org/images/...tockplunge.jpg
The brief increase before a major release followed by a sharp decline after a disappointing showing has become commonplace for Square Enix releases, and now it's reaching a low not seen since the drastic failure of The Spirits Within. For those interested, below is the stock value for a little over the past two years:
http://jaerik.tatersalad.org/images/squareenix2year.jpg

Before today's news, we learned that a majority of the development team for Final Fantasy XIV had been sacked. While I do think that a good deal of FFXIV's failure was due to the development team's inability to learn from the mistakes of FFXIV and that Tanaka did certainly share a deal of the blame, I think equally culpable are the Square Enix executives who likely pushed a release ahead of a reasonable time schedule.

Given the recent thread discussing the possibility that Square Enix should cooperate with a western developer to make the a Final Fantasy title, it's clear that many people feel like something needs to change, and the stock plummet which occurred as a result of today may be a catalyst to that change. Money talks. When Final Fantasy XIII was released, Wada apologized to fans who were disappointed with the title while still remarking on the game's fiscal success. Without that fiscal success to fall back on, what can we expect to happen in Square Enix's corporate structure?

How long until Wada has to resign in shame for running the company into the ground?

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.... I'm pretty sure I just lost a lot of money if thats their real stock values

You didn't lose anything unless you were planning to sell stock

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Originally Posted by Del Murder

I don't think SE is going to fold any time soon. :p

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Oh, you watch.

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Originally Posted by Hypoallergenic Cactuar

.... I'm pretty sure I just lost a lot of money if thats their real stock values

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If you're talking about all those games you've collected then I think you'd be sitting on a gold mine, man. Provided that SE actually went under.

true, I didn't think about that, mostly I was being sarcastic

I think you mean you were trying to be ironic.

No, irony is completely different

Yeah because you failed at it. Sarcasm doesn't even apply in this situation.

you need to by a dicktionary
(worst pun ever intended)

A bankruptcy scare might just be what they need. I mean it worked for them once before, right?

http://www.australiangamer.com/image...f/snakebox.jpg

Big time

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Originally Posted by Jiro

A bankruptcy scare might just be what they need. I mean it worked for them once before, right?

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That is very true. But Deus Ex is coming out soon and that should make them profitable for the next million years.

That depends on how much the game is going to appeal to either the fans of the first game (who aren't going to like console-style retardgameplay) or the xbox crowd who loves their run off the mill shooters and context sensitive buttons and certainly won't enjoy a game in the old style. I doubt it's gonna sell more than FF13 anyway.

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Originally Posted by Jiro

A bankruptcy scare might just be what they need. I mean it worked for them once before, right?

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Yeah, but only once. Look where the merger with Enix took us, we now have X-2, XI, XII, and XI-2- I mean XIV (and for some people XIII), not to mention all the side games that have come out. They are progressively getting :bou::bou::bou::bou:tier! I blame Enix.

Damn you ENIX!!

Yet DQVIII was my favorite in the series, and the DS DQ games are pretty good too...

xii was good

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Originally Posted by Guardian XIII

They are progressively getting :bou::bou::bou::bou:tier! I blame Enix.

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Incidentally, I have heard fans of Enix games say that Enix games feel differently since the merger with Squaresoft, too. I wonder if it is mere nostalgia or a trend indicative of video game development in the East?

What does Enix make besides DQ?

Square & Enix made Chrono Trigger, which is awesome.

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Originally Posted by Depression Moon

What does Enix make besides DQ?

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They did Star Ocean and Valkyrie Profile and I think Grandia Xtreme. I'm sure there's a lot more but those were the only games I was ever interested in.

Robotrek and Illusion of Gaia! They should make a sequel to the latter.

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Originally Posted by Depression Moon

What does Enix make besides DQ?

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http://i.imgur.com/sScC4.png

Lolita Syndrome

Enix does more publishing than actual developing. Tri-Ace makes Star Ocean and Valkyrie Profile. Quintet made Illusion of Gaia (as well as its predecessor, Soul Blazer, and sequel, Terranigma). Even the Dragon Quest games are technically put together by outfits like Chunsoft, ArtePiazza, and Level-5.

They totally made Lolita Syndrome, though.

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A bankruptcy scare might just be what they need. I mean it worked for them once before, right?

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Nah, Any company that can survive beheading Sakaguchi, Uematsu, Kato, Matsuno and takahashi clearly has had Re-raise cast on them since 2003.

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Incidentally, I have heard fans of Enix games say that Enix games feel differently since the merger with Squaresoft, too. I wonder if it is mere nostalgia or a trend indicative of video game development in the East?

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which game are you talking about ?

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Originally Posted by Depression Moon

What does Enix make besides DQ?

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Enix hires developers for Dragon Quest, which they over see, and only publishes IPs for independent development studios like tri-Ace, Quintet and Chunsoft. In SQEX age, "Square side" and "Enix side" are nonsense labels. Enix never even had any developers.

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Robotrek and Illusion of Gaia! They should make a sequel to the latter.

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Too bad Quintet is dead and we'll never see another Illusion of Gaia game or Terranigma.

>>> They have to make FF underwear, thats where the money lies..:luca:

The world ends with you sequel....
Yeah I said it!
In fact, make a whole series. Best game i may have ever played

THE JACKEL

Clearly they are on the right path. They closed at 1510 today. Maybe if they used existing engines instead of always making their own they could spend more time on making the games instead...but I think square is still riding the GGGRRRRAAAAAAAAAAAAAPHICS train at full speed while everyone is now getting off to see other things.

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Originally Posted by edczxcvbnm

Clearly they are on the right path. They closed at 1510 today. Maybe if they used existing engines instead of always making their own they could spend more time on making the games instead...but I think square is still riding the GGGRRRRAAAAAAAAAAAAAPHICS train at full speed while everyone is now getting off to see other things.

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I respectfully disagree with you, Having good graphics in a game isn't a problem here. The amount of needed assets is where SQEX(Many devs) may struggle at . For instance, creating an FFXIII's behemoth took 3 months but for a big RPG, one monster is nothing so how about the number of NPCs, levels, areas. For an RPG like FF, it is time-consuming unless they use methods like random generated dungeon for cheap and easy work or make it small scale game or w/e.

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Originally Posted by ShinGundam

I respectfully disagree with you, Having good graphics in a game isn't a problem here. The amount of needed assets is where SQEX(Many devs) may struggle at . For instance, creating an FFXIII's behemoth took 3 months but for a big RPG, one monster is nothing so how about the number of NPCs, levels, areas. For an RPG like FF, it is time-consuming unless they use methods like random generated dungeon for cheap and easy work or make it small scale game or w/e.

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Taking forever to make a single monster could also be because the development of the engine for FFXIII was poorly handled and it took them forever to nail down what they wanted to get out of it from a technology standpoint.

In the future what they should be doing is figuring out what they need the game to do, what technology needs to be there to make it happen, then figure out if an engine is already out there that can do it, can be modified to do it, or if they absolutely have to build their own from scratch.

Unfortunately, I think development of the Last Remnant may have put them off of using licensed engines, even if any failure on the part of the engine would be from selecting one that didn't suit their needs if anything, not from purchasing a bad engine.

Don't put this on the UE3 engine mang. It's entirely SE's fault for not being able to make a good job out of it like others have.

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Originally Posted by kotora

Don't put this on the UE3 engine mang. It's entirely SE's fault for not being able to make a good job out of it like others have.

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Did you even read what I wrote? I said that any issues they would have had with the Unreal engine would be a result of picking an engine that didn't suit their needs rather than a bad engine, and it's entirely possible that the UE3 may not have been ideal for what they wanted to do, but since I never played Last Remnant I can't say for sure. I do recall them saying something along those lines in an interview after release but I may be a little off as it was a long time ago. Regardless, the general tone I got was that they were put off of using third party tech a bit, and I can't recall them using the engine since to be honest which doesn't bode well.

Well maybe you should try the game first instead of paying attention to some interview. I mean interview talk is usually nothing but PR bull:bou::bou::bou::bou:. There's no reason why the UE3 engine wouldn't be able to properly handle the game. The game played a lot smoother on PC than on the console versions so Square must've done a poor job optimizing the engine for the console versions.

Why do I feel that XIV has a big contribution to their current woes? :s

News just keeps getting better and better!

Ouch!

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Originally Posted by Del Murder

Ouch!

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Ha!

Huge losses = last ditch attempt to do something right, right? Let's hope they don't just fade out into nothingness making :bou::bou::bou::bou: :(

This would be a good time to remake FFVII. Guaranteed money right there.

Yeah, but it will be just a money sinkhole for the next 10-20 years until they can get it to retail. :D

The last time they were in financial trouble they just released a cash-grab product with a "-2" tacked on to the end of their last FF entry. We don't have to worry about them doing that again, right?