Square Enix’s financials were reported on a little while ago, but the results of a briefing from May 13th have become publicly available, with Yosuke Matsuda, Senior Executive Managing Director and Representative Director, explaining them.
Though the company posted a loss during the previous year and called the packaged games business “very challenging,” Square Enix believes that they achieved the “primary goal of both reinvigorating existing IPs and creating new IPs,” when referencing Tomb Raider, Hitman: Absolution, and Sleeping Dogs.
Two things they attribute to the lower than expected sales for all those titles “was tremendous competition from many other strong titles, and with the diverse amount of entertainment options available, customers have become more selective.” One bonus is that each of the three titles earned enough to have their development costs covered, but “did not sufficiently contribute to profits.”
In an attempt to improve their HD gaming business, a three-step plan was suggested, with re-thinking long-term, large-scale development being the first initiative. Citing lack of contact with consumers during such lengthy development, they even said that “in today’s times, making customers wait for years with little to no information is being dishonest to them.” As part of this, looking at Kickstarter, Steam Greenlight and Early Access would increase customer interaction, though they do realize this wouldn’t be an easy task.
Further strategies include looking at “smart devices as game machines” and creating titles that utilize various revenue streams such as pay-per-download, F2P, paid DLC, and hybrids of those. Square Enix also wants to look at regionality, which would involve re-thinking their previous ideas of selling each title globally. Even with all this, they still plan on investing in “flagship titles that showcase our technological prowess,” which are expected to be shown off at E3 in two weeks.
Finally, it was mentioned that it’s “necessary to review the definition of ‘AAA title’,” going after a new type of blockbuster, in addition to the conventional ones.
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