Square Enix recently expressed its disappointment over the unsatisfactory commercial performance of Final Fantasy 16 and Final Fantasy 7 Rebirth, admitting that neither game lived up to its profit expectations. In a financial results briefing, initially held in May but only released now, Takashi Kiryu, President and Representative Director of Square Enix discussed multiple issues affecting the company’s profitability. Kiryu further stated that the company may have cannibalized sales by releasing multiple Final Fantasy games in one financial year without managing its portfolio of titles efficiently.
Kiryu revealed that both games, released in June 2023 and February 2024 respectively as PlayStation 5 exclusives, resulted in annual operating losses and unmet profitability goals for Square Enix. He suggested that the Digital Entertainment segment suffered due to these losses and poor portfolio management strategies. In an effort to recover, the company has announced a significant restructure of its business and plans to expand to multiple platforms, potentially including PC, Xbox, and the next Nintendo console.
Regaining profitability remains a challenge for Square Enix, compounded by long development times for HD games and a necessity to rethink its delivery approach for some titles. Kiryu suggested a three-year plan to manage volatility by concentrating on improving the company’s game pipeline. However, Final Fantasy isn’t the only series experiencing difficulties, with Foamstars, the company’s Splatoon-style game, also failing and subsequently transitioned to a free-to-play model. Looking ahead, the company is set to release Kingdom Hearts 4, a third game in the Final Fantasy remake trilogy, and Dragon Quest 12. In related news, Final Fantasy 16 producer Naoki Yoshida hinted at passing the franchise to a younger generation of developers for Final Fantasy 17.
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