Square Enix Financial Results Reveal Declining Sales But Growing Profits Year-on-Year

Square Enix announced its financial results for the three-month period which started on April 1 and ended on June 30, 2024.

[lelo2play]

They need more exclusives. That's the smart thing to do for 3rd party developers. /S

[Obscure_Observer]

"They need more exclusives. That's the smart thing to do for 3rd party developers. /S"

Lesson Learned

https://www.polygon.com/241...

[fr0sty]

As if selling the game to a install base of 25 million Xboxes, where the vast majority of its gamers don't buy any games, is going to make any difference...

[andy85]

I don't think that 50k sales they'd have got from putting Rebirth on Xbox would have affected much

[Chevalier]

Yeah the extra 4% sales like the last FF game on Xbox will totally help Square. Lol. But yeah let's pretend Xbox gamers will actually buy anything.

Literally nobody needs Xbox for ANYTHING.

https://insider-gaming.com/...

"They tried the exclusive strategy"

Exclusives on Xbox sell way worse so you shouldn't be talking about anything. If Xbox were such a good ecosystem they would have more games. It's pretty telling that most games end up exclusives for Playstation or Nintendo and neither of them even really have to pay for them either. Many developers just go where the money is and unfortunately for Xbox gamers it's to Playstation and Nintendo. That's why Xbox got so desperate for games they needed to buy up developers.

Just look at the terrible sales for Hellblade 2 which couldn't even hit any top 10 charts anywhere. Indiana Jones will definitely fail too.

[pwnmaster3000]

lol you talk about if a developer wants that 500 million but didn’t hellblade 2 have low player count lol.
How are they doing?

Also seems like they are profiting even if they are selling less.
Probably good idea to leave out Xbox. Let’s face it, Xbox has never been good with jrpgs and that’s fine. That isn’t them.
Let them focus on there strong suit which imo is wrpg.

[RedDevils]

Let just put it out in the open. Xbox owners are cheapskates.

[S2Killinit]

If you read carefully it shows they chose wisely. Let me spell it out for you:

1) Xbox install base was not big enough to justify cost of developing games for it as xbox users do not purchase enough games.

2) Square Enix financials shows they chose correctly by not selling its games on xbox because they made more profit by foregoing the cost of development on a console that does not contribute enough to game sales.

Hope that crystalizes for you why developers don’t make games for xbox.

[-Foxtrot]

Also…

I feel like Square putting it on Xbox will end up with them having to put more effort into the Series S and X because of the parity rule

Jumping through hoops for the Series S when they know they aren’t going to shift huge numbers on the Xbox seems a like a bit of work for the little pay off

[Obscure_Observer]

"Hope that crystalizes for you why developers don’t make games for xbox."

You´re not a developer! You don´t run a gaming company and SE certainly don´t give a damn about your nonsensical ramblings!

They tried the exclusive strategy with the PS5 and they failed!

Xbox as an ecosystem has now some staggering 500 Million Monthly Active Users after the ABK acquisition! Not even counting the COD effect on Gamepass yet!

Only some completely dumb and ignorant gaming studio or publisher with no vision for the future would ignore such massive player engagement.

Xbox might have sold less units in comparison to the PS5, but if ANY gaming studio or publisher wants a piece of that sweet 500 Million MAU pie, they´ll have to port their games to Xbox consoles first, genius.

If you´re expecting Xbox to get less and less ports in the near future, you´re in for some major disappointment.

[S2Killinit]

@Obscure
Well, the writing is on the wall. Don’t be triggered please, but clearly Squire Enix financial report begs to differ.

You don’t have to be a developer to see the state of xbox. MS is at it again with strange metrics to hide the fact that they are on their way out of the console market.

I think next generation, MS will try to escape console space altogether by going handheld. Although, I think Nintendo will make them regret that decision.

[lelo2play]

I was thinking about PC... but it seems Xbox scares you.

[S2Killinit]

@lelo2play
Well, their report shows you would still be wrong. And yeah you were, but you got caught with your pants down.
Ps: Oh and xbox doesn’t scare me, but people who lack basic logic do.

[Obscure_Observer]

S2Killinit

"You don’t have to be a developer to see the state of xbox. MS is at it again with strange metrics to hide the fact that they are on their way out of the console market."

Strange metrics you said? Well... Sony's Chief Executive Officer Kenichiro Yoshida would like to have a word with you:

"monthly active users is now becoming more important and meaningful as a metric than hardware sales"

https://gamingbolt.com/mont...

Sony claims. Not mine.

Have a good day, sir.

[S2Killinit]

@Obscure
Except Sony are talking internally, they are not throwing numbers around to fluff things up with subjective metrics and to distract. MS throws big numbers to distract from the numbers they arent providing.

[neutralgamer1992]

They made more profit by cutting down the cost of development for a platform where vast majority own a series S, meaning more difficulty during development and most don’t buy games and wait for gamepass release

[S2Killinit]

Exactly, despite what MS wants people to think when it comes to sales numbers, the Series S and Series X are literally two different consoles. Any developer that wants to develop games for xbox must make it work on the both consoles.

Then, Series sales, even combined, are too low to justify incurring development costs. In other words, they make more money if they don’t being their games to xbox.

All and all, I think MS will want to escape the console market next gen, perhaps release a handheld (although then they have to deal with Nintendo)

[Vits]

People don't seem to understand that by making exclusive games for a single platform, Square Enix is missing the opportunity to build a community on others. It's a basic concept: no community means no sales, even if they release a game here and there. A constant influx of games helps build that community and drives sales. However, right now, the only market that Square Enix treats with any respect is the PlayStation market.

If you are one of the over 25 million Xbox players, you get no Square Enix titles. If you are one of the over 130 million active PC players, you get some Square Enix titles, but they often come as late and poorly executed ports.

Then they wonder why nobody on those ecosystems care about their games.

[S2Killinit]

Well they started on PlayStation, then started releasing their titles on xbox, but it seems this approach did not pay off financially. They are currently releasing on the console where their bread and butter is.

I don't disagree with your community point btw, its just that the community on xbox (or pc)would need to justify the costs at the end of the day. Its not like SE can bear the expense and wait it out until a community is formed, if ever.

[Vits]

@S2Killinit

No company is entitled to anyone’s money without putting in the effort to win over the market. So saying that the Xbox and PC community has to justify itself while being treated as an afterthought is very dumb. But I guess some people are so used to being treated like a doormat that they can't even notice they're being walked over and even wish that others would enjoy the "shiatsu".

[Name Last Name]

Why would SE invest in a "community" that doesn't buy their games for multiple generations?

[Vits]

@Name Last Name

Man, I swear N4G has the highest amount of cattle per page ever.

I don’t understand why people think that companies are entitled to sell their games without putting in any effort. I really wonder how anyone can believe that just because a company wants money, they automatically deserve it.

[Petebloodyonion]

Here are some concerns regarding FF 7 Rebirth:

1) Completion rate of Part 1: Can Square Enix expect those who haven't finished Part 1 to purchase Part 2 at $70?

2) Requirement of a PS5: If someone enjoyed Part 1 on PS4, is there a significant advantage in purchasing a PS5 for the game, especially when PS4 continues to release new games?

3) Exclusivity issues.

Final thoughts on FF7: Cherish and relish Part 3, as it's likely the last time Square Enix will undertake such a project. Anticipate that future remakes will be scaled down or merely remastered.

[fr0sty]

Exclusivity didn't hurt FF7:R sales. It was a bad year for all developers, which is why there have been so many layoffs.

[Petebloodyonion]

Let's consider that the FF7 Remake was released on PS4 six and a half years after the console's release, benefiting from a large installed base. In contrast, FF7 Rebirth was released on PS5 three and a half years after the console's launch, facing a smaller player base and higher costs.

In other news, Atlus is reportedly pleased with the performance of their JRPG remake, Persona 3 Reload, which became the fastest-selling Atlus game to reach the one million sales milestone, despite being available on the DREAD Gamepass.
https://www.eurogamer.net/p...

Wondering what they did differently? Oh yeah, they made the game available on all platforms, including PC.

[CrashMania]

I think we need a bit more context, Remake sold 7 million units, pretty stellar, but that was across the massive PS4 install base at the height of COVID, and then eventually PS5 and PC.

Rebirth is likely somewhere around 3 million units sold going by the latest estimates, not bad, but not as high as hoped, which is a shame as it's an excellent game, but it also relies on a playing Remake, which was divisive to some fans, and hasn't released in the best economic environment. Releasing on PC would have helped a bit, but are FF games known for selling gangbusters on PC? Xbox would barely move the needle.

Rebirth in itself is divisive with some story elements and mini games, I loved the game personally but there's no denying it has some things going against, but I think the exclusivity argument is a little bit exaggerated.

Also I think FF in general these days struggles to capture new, younger fans, it wouldn't surprise me if most current fans are 30+, my youngest siblings barely know a thing about FF and are all playing gacha, first descendant, COD and so on.

There's more up against FF these days than not releasing on Xbox, it hasn't sold the numbers at the height of PS1 and 2 for a long time now.

[Petebloodyonion]

I'm currently playing Rebirth and I love it (I'm in Costa del Sol). The game is incredible, but it's quite complex, which might deter newcomers to JRPGs or fans of FFXVI, especially since the story builds on the first part. For example, is it necessary to have so many leveling systems and customization options? Consider Materia, characters, weapons, party dynamics, item transmutation, the Folio, relationships, Chadley's challenges, etc. Each aspect has its unique leveling system that requires management.

Nonetheless, I'm a fan. The depth is remarkable, and I must commend the fact that each playable character has their own unique mechanics.

I also agree that releasing the game on Xbox alone wouldn't have significantly expanded its reach, but launching it on Xbox, PC, and PS5 would have created a much larger potential market.

[Asterphoenix]

We know your side of things.
1)FF7 and FF16 have done fine. Square always has unrealistic expectations. Sales problem for those 2 is FF13 and FF15 being disappointments. They got lots of sales but they used 2 engines the costs for those were colossal. FF7 and FF16 were better managed engine wise in that department. I agree releasing FF7 as a part series did put people off.

2.)They'll have legs in the long run and FF16 PC edition isn't far for FF16 they also considering Xbox but most of the sales on PC is where the sales are so there's an incentive took them a while Kingdom Hearts to put on Steam due to EGS deal. 50k extra sales on Xbox won't cover the cost not the installment base whether it is FF7 Rebirth or FF16 and they don't want to buy much games due to gamepass.

2.) Well actually people have transitioned recently over to a new generation the PS5 base is really starting to grow and will continue to do so. It is exceeding PS4 at this rate. There's heaps of good things on PS5. Loved Stellar Blade.

3.) In fact it's not as much as a issue as you think. I listed one them on 1. I think a PC release simultaneously would of worked better but FF7 Rebirth probably get an announcement soon on it's release. Development trade of for FF7 Remake exclusivity was the FF7-FF12 remasters to be released on all platforms that got announced at a Nintendo Direct years ago.

Yeah I agree they will water them done to remasters the time constraints are the biggest issue. Deep down I think people wanted a remaster so we'll hopefully see FF9 remaster/remake soon. FF7 in parts I agree was a mistake but nevertheless I enjoyed them for what they are.

[Petebloodyonion]

It's not about my side of things; it's about Square Enix and the shareholder side.

Despite the outcry from PlayStation fans that Square Enix's sales projections are considered unrealistic. Real-world investments rely on established principles such as return on investment. For example, an investment that expects a certain return over five years must outperform the average market fund. Essentially, the cost of the game (basic investment) must outperform the ROI of the same investment in the average market.

Jacob Navok provides some valuable insights into how Square Enix establishes sales projections (it's a great read).
https://x.com/JNavok/status...
https://gameworldobserver.c...

Furthermore, I agree that Xbox alone may not significantly impact sales, but a combined platform release on PS5, PC, and Xbox could potentially expand the customer base. It's important to note that I never claimed the exclusivity deal was the sole factor for FF7 Rebirth's situation. For example, the proximity of FF16's release, which still had DLC plans at the time of Rebirth's launch, could also contribute to the overall problem.

[shinoff2183]

Pete. I can agree with all those points even, you can't expect the same sales even with ps4 compared to ps5. the final thoughts and tbh I'm OK with that. The rumored ff9 remake if what was said is true, it sounds perfect. I think they did a fantastic job with star ocean 2 remake as well. Dragon quest 3 remake seems to be heading in a great direction to. I'd be extremely happy with that.

[EternalTitan]

Remake is fine. The people who bought it will get part 3.
The people who didnt never liked the first remake.

[VersusDMC]

Sales are down because pixel remaster sold 2+million and FF16 sold 3 million+ during the same time period last year and i don't think any big(or any?) square enix game released from april to june 30th of this year.

[Asterphoenix]

It's not just about that it's what resources PS helped with and the payoff of it if they did it themselves which Sony had a big hand in FF7 Remake series,FF16 and some in Valkyrie Elysium.
Yeah I remember Shinra Technologies that Jacob was part of which is a company that had heaps of losses that lasted 2 years alongside that mess that was Yoichi Wada which is a whole another story it was Squares dark days they really went downhill when Wada was president. I mean Square has never been good on management side of things.

Jacob was part of the business side of Square for 4 years far as I'm concerned I'm not taking much notice of him. Well it might be a potential to include all platforms but it doesn't always work we'll see with their upcoming releases like DQ3 Remake and Visions of Mana.

Personally not sure how well Dawntrail did compared to other expansions. Personally I'm waiting for the bargain bin on that one since the content comes as times goes.

[DivineHand125]

I am not sure why some sources put this in a negative light. Square had no major releases this quarter so it makes sense the sales would be less. What's good is than they found a way to lower their expenses to increase their profits given that no one was laid off.

[EternalTitan]

16 crashed, failed and lost money.

[dveio]

The attach ratio of FF was actually as good as the the last Zelda's compared to each of the respective hardware install base, iirc.

I guess development costs just risen. Globally.

[gold_drake]

i dont even blame it on exclusivity, but more on Square themselves.

alot of ppl dont trust them with their games anymore.

sure ff7 remake and rebirth were great, but forespoken was .. lets be honest, trash.

its alot of things at once and ff7 and 14 cant cant keep them afloat forever.

[nommers]

In other words Rebirth released a full month before this same time period as last year, and some are trying to say that SE sales are declining overall which is false. FFXVI released during this time period last year; Rebirth did not for this year.