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Square Enix Reduces Earnings Forecasts by 91% Will they be forced to file for bankruptcy protection?

It seems last week's Final Fantasy XIV kerfuffle had even more fallout than we thought. In an announcement on the company's official corporate site today, Square Enix drastically reduced its earnings forecasts for the remainder of the fiscal year from 12 billion yen (approx. $142.4 million USD) to just 1 billion yen ($11.9 million) - a decrease of 91.7%

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disturbing_flame2047d ago

Square Enix fails because it has not securized the japan market with great exclusivities on PS3, when you see how much FFXIII has been sold in Japan, it shows how much the market can be solid for other exclusivities.

Iamback2047d ago

Now it would nice time for Sony to acquire them and save all those great IPs.

Marcello2047d ago

Square Enix Fails because...

Wada is STILL !! in charge FFS !

They dont listen to fans/customers

They have never made a good game.

This could indeed be a blessing, if the IP`s were aquired by a decent game developer then maybe we could get a great FF one day again.

ComboBreaker2047d ago (Edited 2047d ago )

Let Square Enix also sell the Xenogears rights back to the original creator of Xenogears so he can finally create Xenogears II: Episode VI.

It's all Wada's fault.

Wada and the Japanese: "Let's Westernize by ignoring the Japanese market."

After some several months...

Wada and the Japanese: "OMG, the Japanese market is dying. We must Westernize more or we will surely not die. It is common sense."

Wada and the Japanese: "Oh Wiseman, why is the Japanese market dying?"

Wiseman: "You ARE the Japanese market. When you ignore the Japanese market, the Japanese market dies."

Wada: "I understand. Alrite guys, let's not make use the assets from FF7: Advent Children to make a FF7 Remake that will guarentee millions of sales. Instead, let's make a generic WWII FPS shooter from scratch for the PC that will probably not sell that well."

Konami: "We understand. Let's not Westernize our games. Also, let's not Westernize our technologies too. Let's make Konami ID and MGO ID, instead of using the PSN ID."

Capcom: "We understand. Let's take a great Eastern game like Devil May Cry and Westernize it into a game with a whiny emo kid."

Namco: "We understand. Let's take a great Eastern story like Journey to the West and Westernize it into something call Enslaved: Odyssey To The West. It must not be a great reintepretation of it. No. It should only be a generic Western action game with a ending twist that makes no sense."

Anarki2046d ago

Square need to get their asses in to gear. They take forever to make any game these days :/

maniacmayhem2046d ago (Edited 2046d ago )

I think you people are looking at things through cloudy goggles.

The reason a lot of these japanese companies are trying to "westernize" their games is because of a few reasons.

One main reason is development cost is so high for current gen games that succeding in one market is not enough to make back an earning. Japan has had it good for a long time being a country that turned out quality titles in its day. But now the world has caught up and caught on and are delivering excellent, high quality innovative titles.

Japan power houses now have to play catch up to most of these other great developers.

DORMIN2046d ago (Edited 2046d ago )

@maniacmayhem:

Thats not necessarily true. Its all about limits and who you are trying to appeal too.

Look at basically small budget games like Demon's Souls or Valkyria Chronicles. They are very japanese at heart but have turned into cult classics around the world.

Same with Pokemon here in the Western world, the game is basically the same thing with minor changes for the past 10 years but continues to sell a ton.

Why? They are slightly unique to appeal to Western gamers that still ENJOY 'eastern' style games and they feel like they are AAA quality.

In this case, it is SQUENIX & Wada's fault. You make a generic game that is half western/eastern then your fans in both markets won't want it.

coolasj2046d ago

If a Sony were ever to acquire them.... wow. They would own rights to everything before hand right ? You do realize that's alot right ?

darthawesome902046d ago

Finally an end to Wada's reign of terror.(hopefully)

Maybe without Wada Square will return to it's glory days.

FamilyGuy2046d ago

$14 (subscription fee) x 5 (months given away free instead of being charged like square expected), 1 million (expected owners) = 70,000,000

Lets say they make $40 per game sale and expected 1 million (but only got 500k), that's another 40 mill.

these are just estimated #s but in this scenario they've lost 90million in potential revenue based on just FF14.

FOXDIE2046d ago

how much does sony already own in Square? 11% or something like that?

+ Show (7) more repliesLast reply 2046d ago
Neckbear2047d ago (Edited 2047d ago )

What's funny is the following; you seem to think than making exclusives would ACTUALLY make these games suck less and people would buy them.

Flash news: Nope. They'd still be the same shitty games.

Akagi2046d ago

Oh look, Neckbear is clearly from another dimension wherein all Square-Enix games are exclusive to the PS3! He knows what they are like!

AmazingBrian2045d ago

It's sad to see them in this position. They have done well in that past but it seems this decade, they have dropped very low. They have made great games in the past so I don't want them to go. I want someone to buy them and keep them alive. There are so many fans of final fantasy if they just make a good FF(wiff TOWNZZ) or a new Chrono game with HD graphics, they could make good money. They just need to spend a little less time on the graphics and more time on the gameplay and story.

Marceles2046d ago

Westernizing games, acquiring Eidos (why??), only catering to the handheld market, slow console gaming development with lackluster results....the only thing Square hasn't lost is how great their CG and art looks, but the games have sunk to a new low.

UCMEandICU2046d ago

Do they now have the Hitman franchise? I hope they don't mess that one up. It's been over 5 yrs since we got a hitman game and the very first one on current gen consoles now.

There is no excuse, Hitman should blow the roof off with current gen raw power in every element from sound, to story to gameplay everything.

If they just put out some Hitman blood moneyish thingy with just Kane and Lynch type graphics and presentation I will forever hold a deep grudge against SE.

Do whatever you like SE just don't mess up FFvs and Hitman

gamesmaster2046d ago

surely a ps2 hitman hd release similar to that of the god of war 1,2 titles would make them some money.

i remember reading an article which refered to a sony executive explaining how beneifical these hd remix's can be to a developer and its particular franchise.

in any case i hope someone does buy SE and renames the company..er.. oh yes.. SQUARESOFT!!!

Tuxedo_Mask2046d ago (Edited 2046d ago )

@UCMEandICU

That's something I didn't get.

1.They have the Hitman Franchise.

2.They release Kane and Lynch.

3.After lackluster sales of Kane and Lynch they decide to...

4.Release a sequel to Kane and Lynch rather than a new Hitman game.

It's not just Square's old properties that they aren't taking advantage of, so it isn't any wonder that they're having problems.

FinalSpartan2046d ago

wow what happen to this gaintss...:'(

good old square soft. stellar titles on PS1,SNES days. RPG powerhouse they were. No one ever match the quality of RPG they made.

But fast forward modern day :( FF13 huge fail . FF14 huge fail.

princejb1342046d ago

it wont matter to me if they go bankrupt
they havent impressed me at all this gen
they know what the fans want
kingdom hearts 3 and final fantasy 7 remake
just in bring these to games and watch the money flow

instead their throwing out bull shit games like lost planet 2, even after the first one failed

if anything bring out a xenogears remake i would buy that

cemelc2046d ago

Dude lost planet is capcom not square.

Spitfire_Riggz2046d ago

Hasnt Sony saved Square from bankruptcy once before already?? I just really want Kingdom Hearts 3 in the future so Sony should bust them out again. Maybe they will be thankful this time

FamilyGuy2046d ago

This has %100 to do with not being able to charge a subscription fee for FF14 Online and lower than previously forecast sales for that same title. They may also previously forecast a 2011 release date for FFvs13 that now seems like like it might be later.

Square Enix is still a huge company, they could release their own console if they wanted, so chances of them being bought buy Sony or anyone are extremely unlikely.

Yeah, FF14 is doing terrible, $14+, per owner, per month, for a full year makes up an enormous amount of revenue.

Small math: say 1 million users paid the monthly fee for a year that'd be $168million alone, but since it's not a year of potential subscription sales lost, more like 4 months (the ones they've been giving away free because the game still needs patching), the is lower and probably based on higher than 1 million sales with the revenue of the cost of the game itself also factored in.

This is FF14 related, and in my opinion not really worth worrying about since subscription sales are like %99 revenue on top of what it actually cost them to maintain an online game.

Abriael2046d ago

Looks like the one that wrote the headline isn't too smart.

What's been reduced by 91% is the "net income", which means the PROFIT, with expenses taxes and such already subtracted.

The fact that the company still predicts to make a profit (with so many companies out there that end years actually losing money), means that bankruptcy isn't even on the horizon.

The actual income from sales (without expenses) has been reduced just by 19%, which puts them just above the margin they need to turn a *profit*.

It's funny, because economically speaking the percentage reduction of the net income is the *least* telling. Of course, it 90% makes bigger sounding headlines than the actual relevant figure, which again, is little below 19%. Bad? sure, but hardly catastrophic.

TheDivine2046d ago

No they just put all their money on graphics and spread out over 10 games. Tone down the graphics(its jrpgs we dont care) and make better games. They have made last remnant and infinite undiscovery which i loved. Nier, Star Ocean 4, Psp games and ff13 all were good. The thing is, only ff13/Last Remnant and psp games were from square, the rest they just published. They promised so much and announce too soon. FF14 was just retarted, should have added onto ff11 like wow expansions so vs13 would be out. FF13 was good but the hate from the 360 version killed it in my eyes. It needed npcs and towns(all other jrps this gen had that even single dvd 360 ones so it was by choice) but they chose graphics, blew the budget and had to port to recoup investments, which will happen with vs13.

animboo2045d ago

to think back, they used to be my favorite game studio, now they just make crap after crap. where are the new and innovative rpg that is not a remake and has a linear gameplay. wheres the quality synonymous with their name.
Wada is to blame for trying to westernize something that has always been popular as an eastern rpg.

+ Show (7) more repliesLast reply 2045d ago
NewMonday2047d ago

Let MS bail out, maybe this will push Wada out.

blind-reaper2046d ago

Wada is the one supporting Microsoft!! how will they push him out?

gamesmaster2046d ago (Edited 2046d ago )

by clenching thier buttcheeks together...

M4ndat0ry_1nstall2047d ago

"Square Enix drastically reduced its earnings forecasts for the remainder of the fiscal year from 12 billion yen (approx. $142.4 million USD) to just 1 billion yen ($11.9 million)"

Wow! I doubt Square Enix will file for bankruptcy just yet. But as Square Enix seem to be having financial problems as of late, can they really afford to limit their earnings by creating a AAA budget exclusive game for one system at this point (FFvs13)?

PirateThom2047d ago

Creating "AAA" budget games for one system and alienating their core userbase is why they're in this mess.

maniacmayhem2046d ago

@ Thom,

Correction, creating "crappy" AAA budget games is why they're in this mess.

Eamon2046d ago

Of course. It's because you release a game on multiplatform, it makes you go bankrupt.

The logic of deranged fanboys probably cannot be understood by even Freud himself.

The reason is most likely due to humongous budgets and very long development periods.

4 years to make FF13. That's 4 years of paying salaries of designers, programmers, engineers. Then there's the huge marketing budget and the earnings of the S-E executives. And probably a lot more expenses involved too.

Neckbear2047d ago

Bankruptcy won't happen.

They're still making a profit. They still paid for all the expenses they had. They aren't LOSING money.

Abriael2046d ago

at last someone that got this. Bubbles for you.

Ruggadagod2047d ago

just needs to make exclusive jrpgs for the ps3 and they'll be fine. they keep forgetting who supported them last generation....the PlayStation fans.

gon-freaks2046d ago

^

lol disagree of fanboys of ff13...

Elven62046d ago

So going by your logic, Square should still be Nintendo exclusive since if it weren't for Final Fantasy 1 selling really well they would have closed up shop decades ago. Companies don't pledge allegiance and folks who own a PS3, Xbox 360, etc and like Square's games will buy them regardless.

And how did this story even get approved? The titles are DRASTICALLY different.

N4G is going down hill.

Eamon2046d ago

"N4G is going down hill."

oh, you just noticed.

Elven62046d ago

It gets worse each passing day. =/

Blaster_Master2047d ago

lol I guess the MS checks aren't lasting them as long as they expectded? I think the downfall of Squenix doesn't have anything to do with FF14, considering the game hasn't even had a beta on the ps3 yet. The problem with squenix is the fact that they concentrate too much on the money, and stray away from the vision the companies (Enix/Squaresoft) had at the begining of their exsistance. Quality games = Money. Pissing off fanbase, making crappy games, and showing favoritism to an unproven market(X360) is what will break you. Dumb ass Squeenix.

PirateThom2047d ago

FFXIV is out on PC and it's pretty broken from all reports, to the point they've had to suspend taking any subscription payments.

Blaster_Master2047d ago (Edited 2047d ago )

nothing against you Pirate, but you help make my point. FF is a series that started out on console. Most of its fanbase are on console. Companies are taking games away from their fan bases and putting them on pc. Look at KOTOR, it started on Xbox. PC users generally dont like playing games on consoles. They fail to get into games that started on consoles. Thats why games like Starcraft do good on pc, its cause it started out and gained a fanbase on pc. FF is a console franchise, it doesn't belong on pc. Publishers are shooting themselves in the foot when it comes to bringing these franchises to pc. Like Phantasy star. They bring it to the 360, but people who owned dreamcast are into nintendo and playstation.

DethWish2046d ago

KOTOR started on PC as much as xbox?

Also bioware started on pc :P