Square Enix reports around $140m in ‘content abandonment losses’

Square Enix recently announced plans to revise its approach to game development. As a result of this, a few creative endeavours have been abandoned, with Square Enix announcing plans to absorb the losses, which will add up to around 22.1 billion Japanese Yen.

Square Enix's recent investor note confirms that the company will be reporting a pretty huge loss this year, amounting to ¥22.1 billion, or the equivalent of around $140 million USD. Square Enix refers to this as “content abandonment losses”, which has coincided with Square Enix's recent strategy shift this year. As a result of this, Square Enix is also carefully revising its previous financial forecast. The new strategy shift from SE will include being more selective and focused when it comes to allocating resources for projects.

Thanks to expected continued sales of Final Fantasy 16, which now has multiple DLCs, alongside launch sales of Final Fantasy VII: Rebirth, Square Enix had previously forecast full-year sales of around $2.3 billion USD, a near 17 percent rise over sales in the previous financial year. However, those sales would only equate to around $350 million USD in profit, as reported by IGN. As a result, this new loss on the balance sheet could eat into that profit margin.

With that said, Square Enix has been on a bit of a hot-streak recently. Final Fantasy 16 is my personal favourite in the series and the Final Fantasy 7 Remake trilogy continues to be received well with its second instalment. Better yet, we seem to be getting games in these major franchises at a slightly faster rate than previous generations. Currently, Square Enix is rumoured to be targeting a 2025 launch for Kingdom Hearts 4, and we also know that Dragon Quest 12 has been in the works for several years now too.

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KitGuru Says: Square Enix gets a lot of flack for some of its business decisions but if it can keep up its current pace and quality bar, I think they'll rise up the industry ranks once again. I just hope we can also start to get quicker or simultaneous PC releases for future games, rather than the year+ wait we've been getting for new Final Fantasy games. 

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