Square Enix Suffers an ‘Extraordinary Loss’ After Opening a New Subsidiary
Japenese publisher Square Enix just announced that it suffered what it’s calling an “extraordinary loss” of 3.73 billion yen, or around $33 million USD. In addition, numbers were down all over the company, including sales and profits. The loss occurred during a six-month period that ended on September 30, 2018.
The staggering loss is attributed to the newly-established Luminous Productions, which Square Enix opened in March 2018. Final Fantasy XV director Hajime Tabata leads the Tokyo-based studio. A restructuring of sorts for Luminous led to a renewed focus on “large-scale, high-quality AAA game titles, which best leverage [Luminous’] strengths.” However, that move is what led to this crushing financial blow.
Unfortunately, Square Enix shared more bad news. Net sales were down 15%, and profits went down 50%. This is despite some high-profile titles, such as Nintendo Switch-exclusive Octopath Traveler, which debuted atop the July 2018 NPD charts. However, Shadow of the Tomb Raider, which released only a week after the sales juggernaut that is Marvel’s Spider-Man, had a slow start. September 2018 also saw the Western release of Dragon Quest XI: Echoes of an Elusive Age, which just passed four million units sold worldwide.
Despite this loss, the company is still optimistic about its prospects. It is projecting overall net sales of around 270 billion yen, or about $2.39 billion USD, for the fiscal year. That would actually be an increase of 7.8% from the previous year.
There are certainly some exciting projects on the horizon. The highly-anticipated Kingdom Hearts III is dropping in January 2019. Before that, Just Cause 4 will be parachuting into December 2018. In addition, the Final Fantasy VII remake is still coming along, though its release date is unknown.