Square Enix lowers fiscal-year expectations

The gaming industry is seeing a burst of pessimism this week. Nintendo lowered its financial projections, one industry analyst changed his mind about US game sales' ability to grow this year, and another suggested the rhythm genre was headed for the second-act fall from grace of a Behind the Music episode.

Square Enix is the latest to scale back expectations, as the Japanese role-playing game publisher today revised its fiscal year profit projections downward by ¥5 billion ($55 million). The downgrade was blamed on a variety of factors from the first half of the company's fiscal year (April-September), among them expenses associated with the company's purchase of Eidos, as well as severance payments and outplacement programs.

The downgrade also impacted Square Enix's full-year expectations on earnings per share, knocking it down from ¥130 ($1.43) to ¥87 ($.95). Even with the reduction, that's still significantly better than Square Enix's prior fiscal year earnings per share, which came out to ¥55 ($.60). The rosy outlook compared to the previous year no doubt is owed to the blockbuster Japanese success of Dragon Quest IX, and this December's debut of Final Fantasy XIII for the PlayStation 3 in Japan (international releases on the 360 and PS3 are expected next spring).

The rest of the company's full-year projections, including revenues and operating income, remained unchanged.