Square Enix warns investors of $148 million loss

Publisher revises its earnings with warning of "extraordinary losses" due to project cancellations, earthquake.

In February, Square Enix issued a full-year financial forecast, which saw its projected net income drop 90 percent to ¥1 billion ($12.35 million) on sales of ¥130 billion ($1.60 billion). Now, the day before it reveals its full-year earnings, the company has pulled back the curtain on its finances by issuing revised annual guidance--and the picture it paints isn't pretty.

Square Enix had a rough fiscal year.

Square Enix now says that for the 12 months ending March 31, 2011, it expects to suffer "extraordinary losses" of ¥12 billion ($148.33 million) on revenue of ¥125 billion ($1.53 billion). The figures stand in stark comparison to the ¥9.5 billion ($117.44 million) in profit the company made on ¥192.25 billion ($2.37 billion) in revenue the year prior.

In a short statement, the company explained the drastic downward revision. Much of the company's losses can be chalked up to a reassessment of unspecified previous acquisitions now worth approximately ¥8.8 billion ($108.78 million) less due to a "rapidly changing operating environment."

Also, because of the introduction of a "tightened selection standard regarding title lineup," the company expects around ¥4.5 billion ($55.61 million) in costs related to "project development cancellation." In mid-March, the company canned Gun Loco, a violent third-person shooter for the Xbox 360.

Like many other companies in Japan, Square Enix also saw its bottom line affected by the tragic Tohoku earthquake and tsunami in March. As a result of the twin natural disasters, the company recorded a loss of ¥0.6 billion ($7.4 million) due to damage to and closures of several of its amusement facilities.

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80 comments
warbrady
warbrady

good a company canns some thing that sound crap rather than canning somting every one whants for once

jemoedr
jemoedr

@endymion001 glitchy? Booring? Dude wtf? I think they make amazing games. Especially the FF games are amazing. I also like their other RPG's. They're new on the other markets, give them time. And you can say what you want, but imo they still make much better games then for example activision or EA.

Ex-DarkBlade
Ex-DarkBlade

@leeko_link, Final Fantasy Type-0 looks really good and is a promising game. If Square Enix scrapes Final Fantasy XIII-2 then Tetsuya Nomura will be pissed off badly because he stopped the work for Final Fantasy XIII Versus to help with Final Fantasy XIII-2. Why would Kingdom Hearts 3 come out for the Wii? Nomura would never allow it. And Square Enix are not losing their fanbase for not remaking FF7.

kytomasi
kytomasi

@Leeko Link while alot of your stuff sounds like your wishlist, i know that making final fantasy games like the classics wont work these days. Gamers are so spoiled now, they cry about almost everything. Only reason those games were good because video games were still developing different styles and it used alot of imagination. Now games require almost no imagination. So if it doesnt appeal to you, you wouldnt enjoy it.

endymion001
endymion001

square/enix has been under performing since their merger a decade ago...square used to be the standard bearer of the industry as far as JRPG fans were concerned...now, they carry the stink of mismanagement and broken promises, and disappointment. I have supported them since FF1 on NES. They don't listen to feed-back, they release glitchy, boring and perpetually underwhelming games no one wants to play...(Front Mission: Evolved)...and have every excuse in the world to deflect criticism from their terrible management. The free market is about to swallow this once great and shining figure into the abyss...sad and appropriate at the same time..

Pawfalcon
Pawfalcon

Blaming terrible results on the Japan disaster? Thats just a douchey move. I'd go with the list of crappy games they've been releasing recently. And any investor that didn't see this coming shouldn't be investing in gaming, which he/she obviously has no idea about. Visiting this site (or probably any gaming site) once a month would let you realize Square Enix isn't having a good year.

Zerabp
Zerabp

@leeko_link While I have no preference towards Type0 Final Fantasy XIII-2 is actually sounding better than the original and like VS XIII will be fully explorable, unlike the games you mentioned and X which you notably left out. Is set to have a much more in depth story than it's namesake and is going to ad further customization to the battle system. Finish VS XIII and then make Kingdom Hearts 3 for the PS3 and maybe for the 360 but certainly not for the Wii, Project Cafe maybe but Wiii no, just no. Agreed Agreed Not just for VC for all three systems online services Haven't played the Dissidia games can't say Remake IV, V, VI, for the PS3, project cafe, 360 stop putting games that deserve full console treatment on handhelds. FFCC was meh at best let it die a quick painless death And just no releasing games for all consoles means more money to make the games you are asking for whether it sells in Japan is irrelevant as the NA and Euro markets now match it and exceed it quite often in sales.

leeko_link
leeko_link

Square Enix, if you want success then these would be the best way to do it. - Scrapped Final Fantasy Type-0 and Final Fantasy XIII-2 and make Final Fantasy XV, this time make it so that you could explore and interact with NPCs more and make sure it plays similar to those of the classic FF games, not like FF12 or 13. - Make Kingdom Hearts 3 for Wii and/or PS3. - Remake Final Fantasy VII already, you'll continue to lose fan base by not doing so. - Make a new Chrono sequel, don't force gamers to continue buying a game they already got a.k.a. Chrono Trigger and Chrono Cross. - Localize and release Seiken Densetsu 3 for VC already. - No more Dissidia FF games please, the first was already good, the second was meh at best. - Remake FFV and VI for 3DS. - Make a true FFCC game for Wii or Project Cafe, not like the Crystal Bearer. - Stop releasing any future games for Microsoft's consoles, they'll never sell in Japan. - Don't make changes to IPs that are not broken or they'll end up like Dawn/Heroes of Mana, Final Fantasy XII and XIII, The 3rd Birthday, and Front Mission Evolved. - Port the Secret of Mana remake to DSiWare and/or PSN now, the game would play so much better with those than on the button-less iPhone. Also with DSiWare, add co-op via local or online WiFi play and it'll be super sweet. - Localize every damn DS and PSP games you released in Japan for NA please.

TOOLXLATERALUS
TOOLXLATERALUS

I have to agree about the voice acting issue if there is ever any remakes, either get pros or none at all. the best voice acting in a "fantasy" game imo was the Legacy of Kain series, made me laugh when i saw Raziel's voice played by this little old man with glasses on a chain : ) and the late Tony Jay was epic. The voice actors SC2 are pretty good too, then again I dont play many newer games as it is so there may be some great ones out there that could do it justice. I did read an article a litttle over a year ago where someone at SE hinted at a remake of 7, but i haven't heard anything since. @FinalKloud....hate to admit it but you have a very good point.

FinalKloud
FinalKloud

if they cant make a new FF game right, what makes anyone think they can remake one of their best titles right?

Stevieweiser
Stevieweiser

All they need to do is look at what they did right with Final Fantasy Tactics, FF 7, 8, 9, 10, 12, and Vagrant Story. FF 13 sucks, apparently FF 14 is the worst MMORPG ever, and these two games are a huge embarrasement for the once "King of the RPGs." On a side note, if anyone on here complains about a company taking their time developing a game, they can suck it. There are far too many games today developed with only a quick buck in mind (see Dragon Age 2) instead of being a quality product that will make even more money through word of mouth and great reviews.

Max_Payne2011
Max_Payne2011

perhaps after DE Human revolution and hitman absolution, things will be different

dybbuk
dybbuk

I remember when US developers couldn't make a good RPG to save their lives and all the 'great' stuff was coming out of japan. Now with companies like bioware pumping out mass effect and dragonage and bethesda with elder scrolls its seems the tables have turned. While companies here have innovated and evolved their rpg's, square enix(the once king of RPG's) seems stagnate and unsure. While FFXIII was decent it wasn't nearly as grand as the earlier FF's. I wonder what happened? Arrogance? Complacency? Versus looks promising but its taking to long to come out. Something just doesn't seem right with the whole situation. Maybe more focus on higher quality titles with shorter development times? I don't know what the answer is, but I do know that what they are doing now is not working. And as a side note.....yes I would be in favor of a Final Fantasy VII remake. If not VII then at least VI since it was all 2D.

syafiqjabar
syafiqjabar

This is why a lot of people believe they are the next company to sign up with Good Old Games (GOG.com). They ccould use the money. GOG already confirmed they have one company sign up with them already plus two more coming soon (the other two are probably Lucasarts and 2K).

Salehjamal
Salehjamal

The release games sparsely and take their sweet time. Not that I mind that if the quality is good but their top name FF is degrading by every release. I miss the old FF games.

Threesixtyci
Threesixtyci

After what they did to Aya Brea's personality type of their latest PSP game, I'm not really surprised.

majere613
majere613

In addition to all this news, SE now also have a hack to worry about: http://www.bbc.co.uk/news/technology-13394968 Interestingly, one of the hacker names mentioned there is 'Ryan' which seems to connect to Anonymous, though there's no suggestion he was actually involved since the names were probably planted as a smokescreen.

joeborg14
joeborg14

And thus continues the demise of the JRPG titan... But in all seriousness... when is KH3 coming out? XD

decoy1978
decoy1978

SE right now is in LIMBO. Recent gaming failures like Nero, FFXIV, and cancellations of Gun Loco are just the TIP of whats been going WRONG with this franchise. Back in the day, I would look forward to the next SE release, not anymore. Their last great RPG was not FFXIII but FFXII imo. Sales numbers were good, but not GREAT for a franchise that expects greatness. I love SE, but I am scratching my head every time they release an average game.

Quezakolt
Quezakolt

Also FFXIV is one hell of a disaster. Can barely see the hype rebuild on this one.

Quezakolt
Quezakolt

I think it may be because they became too big. They bought too many companies. They should have sticked with SquareSoft & Enix. Where are all the inspiring RPGs of this generation? I can barely find them. Instead, they throw shooters at us. However, gaming is now a big franchise and advert. joke, that is sad, but there are still some gems to be found.

gaming_alice
gaming_alice

(sigh) Y'know there was a point in time where an announcement like this would have made me very sad. But now I can only hope that this is a blessing disguise. The last few FF's felt like they were being phoned in. I think each one could have been saved with a little more effort and ingenuity, I think the last few all had a glimmer of something great. But instead I felt like they had a checklist to their formula: overly androgynous, spiky haired, angst ridden lead.. check. Creepy, effeminate villain that shape shift into something that looks like a tumor on steroids... check. Wide eyed peppy girl who ate one too many pixie sticks and is thinner than a tooth pick... check. Environments that more closely resemble a screen saver than an actual residential area... check..... you get the idea, I can't help but feel though that when they came to the check mark for fresh and original their answer to that was to add more belts, pointless accessories and spandex than the last game. I can only hope that a loss this huge will be a wake up call and help Squenix recapture the glory of the golden days instead of selling themselves by virtue of their names alone.

irishdude199210
irishdude199210

Personally i don't like the idea of remakes. I liked the characters the way they were. I enjoyed imagining what they sounded like, rather than be infuriated by some idiot, annoying voice like Vanille. If they make the game in the first place with voices, fine, remakes are ok. But don't add voices to characters who never originally had them.

Audx911
Audx911

This will hopefully stop them from putting out games like the 3rd Birthday

0bags
0bags

I hope they dont remake ff 7 it was a great game but if they waste their time forcusing on a remake the very slim chance of them making a game that is just as good or even better dissappears. And when i said slim i mean slim.

Spahettificator
Spahettificator

The only problem I'd have with a FF7 remake is how well the voice acting is done. In the Dissidia games (or at least the english translation) Cloud puts gaps in his sentences which I guess are meant to make him seem brooding and deep but instead make him sound like a retard who can't think of an entire sentence in one go so has to stop to think what to say next. Tifa wasn't as bad and Sephiroth was average. If they'd get better voice actors I'd have no worries but they've been pretty hit and miss (i.e Tidus is annoying/Auron is awesome, Vanille is saccharine like liquid sugar poured into your ears which made me want to duct tape her mouth shut)

Valacan
Valacan

Ah, so your MMORPG was terrible and you haven't put out a decent Final Fantasy in many years. Except for the earthquake, it serves them right.

redness19
redness19

See? This is why Execs get paid the big bucks. Instead of saying "We're not going to waste money on crappy games" or "We thought it'd be worth something, but were wrong", they say "tightened selection standard regarding title lineup," and "rapidly changing operating environment.".

finbar_omahony
finbar_omahony

you know what, although a remake of final fantasy VII would be good, especially if they didnt change it except put in more sidequests, instead of emerald and ruby, (i think the one that gives you the ultima weapon is diamond im not sure), they could add Sapphire, Jade, Topaz, Obsidian etc To add more gameplay to it without affecting the existing storylines and quests. at the same time i started playing FFVII again 2 weeks ago, and i dont think they would be able to do it justice, they would have to stick with the little things that made final fantasy VII great, hand drawn non-3d backrounds, less detailed non-battle caricature's (they are extremely expressive rather than high detailed ones such as in FFX) , and most of all, the option of turning off speech, sure some people would like some decent voice acting, but i think there is something to be said for reading the text instead of listening to the speech due to how amazing the music is.

OrianaDorta
OrianaDorta

A remake of FF7 will help A LOT now Square Enix... think about it.

Burmercia
Burmercia

Make. Better. Final Fantasy's. It was possibly the most lucrative game series of the 90's and early 00's, until they started churning out poor titles... then its only a matter of time before the inevitable happens, ie this.

TOOLXLATERALUS
TOOLXLATERALUS

Stumbled upon this while replaying FFT (psone version)... They need to pull out the ace in the hole here to save themselves. Take a good look at the new Mortal Kombat, the classic was COMPLETELY remade with better graphics but the game was almost exactly like its original in terms of gameplay. Its selling very well. Now you have several old games from Square's golden days that if remade will most likely have the same effect, top of that list are FF7 and CT. (someone already started doing CT but square shut them down...too bad it was looking good, and the tech demo made a lot of us fan boys get very excited for a remake of FF7) also on that list are FF6/5/4..i think, my numbers get mixed up with the jap/us numbers. Leaving the core of the games intact (maybe adding some new things, optional superbosses, some new areas triple techs that dont suck to name a few) and bringing the graphics up to date and the absolutely amazing soundtracks from 8/32 bit sound to whatever the newest stuff out there is called now, they would have several big sellers and they could skip several steps in the making (story-composing the soundtrack-battle mechanics) which would be cost effective since the cash flow is low. ok im done rambling thats my 2 cents...trolls and flamers have at it.

KoolzKatz
KoolzKatz

Im no fan of Square Enix but they are publishing Deus Ex: Human Revolution and the new Hitman game that was just announced so yeah i ll give ya some money SE lol. I wont buy anymore of your Final Fantasy games though

servb0ts
servb0ts

I love SE but as the saying goes, "You get what you pay For!". make Crappy Games, Lose Fanbase, Trust and Stock. than Lose Reputation, and Hype.

Sendmn23
Sendmn23

"the day before it reveals its full-year earnings" I can understand why they did it, but its still kinda shady if you ask me. That being said... All Square would have to do is a Final fantasy 7 remake worth a darn and that would pretty much save the company... just my opinion and all...

organbank
organbank

Well if this means we see less games with crappy Japanese artistic design then I for one am happy.

Darkefka
Darkefka

@flipnofunk Square-Enix didn't do Star Ocean nor Valkyrie Profile, they just publicised them, Tri-Ace made them

clqtte
clqtte

Make a real good FF RPG games ...........

Evenios
Evenios

the main fault?: Final Fantasy XIV: Worst Final Fantasy ever! Fix it!

flipnofunk
flipnofunk

@OJdaLIONKing Well... Enix was responsible for publishing games like: Dragon Quest, Act Raiser, Star Ocean, Valkyrie Profile Just to name a few

Zloth2
Zloth2

@atopp399 good question. The hype that was generated from that tech demo they did showed just how many sales they could get with this. Same story. Same mechanics. New graphics. Voiced dialog (which means we can't name our own characters - ah well). Easy money! Then do it for FF6.

WintersMidnight
WintersMidnight

@OJdaLIONKing Correction, Square Softs peak was during the PSONE era, not during the PS2. Sure they got some good games, but Squaresoft truly shined during the SNES and PSONE days. The PS2, they had Final Fantasy X, and Kingdom Hearts....not really a whole lot after that. Though to be honest, while they are not what they used to be, there is still a gem or two from SE every now and than. Chaos Rings and the World Ends with You are sure shines of that. These proves that the company can produce fantastic games, why not more is unknown.

redskinStu
redskinStu

That new Front Mission was kinda sucky...

OJ_the_LION
OJ_the_LION

Contrary to what Exedeath said, Square started sucking after Enix merged with them. I don't know how great Enix was before SE, but their lineup didn't inspire much confidence. Before the merger, you had quality titles like KH, the FF's up to X, Xenogears, Chrono Trigger, Vagrant Story, etc. Since then it's been stuff like FFX-2, 40 billion remakes, spinoffs and psp/ds exclusive sequels, and FF14. FF14 shows exactly what's wrong with the leadership, if they had any grasp of the market they would have stopped it from launching in that shape--hell, even with their best people working on it like their jobs depend on it (because they do), with 8 months' worth of improvements it's still only so-so. FFXIII, although I enjoyed it, also had quite a few problems. They need to get rid of the million spinoffs/ds remakes and focus on high quality new IPs and full fledged console sequels. The multiple DS/PSP KH games that are slowly killing that franchise while we still haven't heard of a KH3 five years after KH2 are an example of what NOT to do. The short sighted "grab a profit now with a spinoff/remake instead of investing in the future of the IP" mentality that they've had since they became SE has finally caught up with them.

exedeath
exedeath

People are right about Square not producing good games anymore. The last good game they came out with was Kingdom Hearts 2. Enix however has Dragon Quest, and those games have never let me down. The last good Final Fantasy was 9, and it was mediocre at best. Why Enix ever let themselves join up with a horrible game company is beyond me. After the latese Final Fantasy Square deserves to shut down.

JediKnight66
JediKnight66

The people who keep spouting on about how they need to make better games are ignorant. Except for FFIV of course. People deserve to be mad about that.

pszone
pszone

Well FF14 online was a flop and mindcap was didnt sell aslo they need to go back like ff7 and hopeing hitman and Tomb Radier boost there money but the other games they had quite didnt sell and psp games they put out didint sell so they need to think and oh yes HD collection i brought didnt sell but anyways sqaureenix need think what to do next.

CorruptGamerGX
CorruptGamerGX

Do everyone a favor Wada and step down already. Your stupid decisions are killing Squeenix. Instead of giving gamers what they want, we have put up with tons of ports, spin-offs, re-releases and half-baked games.

Megavideogamer
Megavideogamer

I can understand the canning of Gun loco. But Square Enix didn't quite get it's "bread and butter" Final Fantasy 14 on-line MMO game off to a good start. Which is difficult to understand how Square Enix not getting it's flagship series right. Maybe they will eventually get things back on track.