Square Enix to See Huge Losses, Cancellations Imminent
Video game developer and publisher Square Enix came into the new fiscal year with its pinky finger raised to its mouth and expecting to make a profit of one billion yen (a little more than $12 million US). Upon current review, the company has now released an updated projection which shows a much more grim reality, to the tune of losing $150 million in losses.
The company sent out a press release citing “extraordinary losses” as cause for reevaluation, going on to say:
Under a rapidly changing operating environment and more prudent estimates of future cash flows, the Company plans to write down goodwill (approximately ¥8.8 billion). Further, as a result of introducing a tightened selection standard regarding title lineup to strengthen the revenue base of the Company’s digital entertainment segment, project development cancellation and related losses (approximately ¥4.5 billion) are expected.
The company must, as several others in the industry, chalk up quite a bit of loss due to the recent devastation in Northeast Japan. Even when the headlines finally die down, that’ll be affecting all of us for quite some time. In Square Enix’s case, the executives reckon the company will see over half a billion yen in losses.
The recent PSN outage has perhaps resulted in a slight loss to the company as well, though it’s not explicitly mentioned in the press release. It is well known, however, that the company was doing well with its PSOne Classics, PSN games, and downloadable extras.
Word from within the company is that game cancellations are expected. Fans will just have to wait it out and play guessing games until the ax is officially dropped. Will Final Fantasy XIV finally be put out of its misery? Or quite the opposite, could that game get its act together and finally justify charging subscription fees? Are more instant-cash PSN releases and handheld ports in store? The release of a tell-all FF7 love triangle comic book? Time will tell, and so will we, so check back for updates. Feel free to prognosticate in the comments below and in our newly reorganized forums.