Square Enix New Financial Slump Accounts For ¥22.1 Billion In “Content Abandonment Losses”

Posted on May 1, 2024 by Nick Moreno

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One of Japan’s largest publishers continues to find itself in a pit of financial decline after each major release for roughly a year. Following the release of Final Fantasy XVI releasing on PlayStation 5, the game was reported to be launching with shorter sales margins than the firm was estimating. Additionally, the same is also reported recently for Final Fantasy VII Rebirth as well.

What’s more, the same dissonance is also apparent for another Square Enix release. Alongside the release shared on PlayStation Plus, Foamstars is underperforming as well. In one report, it is indicated that roughly 90 percent of all users already dropped playing the new live-service. Since the lineup of decline for the publisher, Bloomberg reports Square Enix’s new effort to reform its gaming business model moving forward.

Now in a new statement issued by Square Enix, it has reported a total of ¥22.1 billion ($133,630,000) was recorded in capital loss from “content abandonment losses.”

At the meeting convened on March 27, 2024, the Board of Directors of SQUARE ENIX HOLDINGS CO., LTD. (the “Company”) voted, in light of the myriad changes underway in the environment surrounding its Group, to revise the Group’s approach to the development of high-definition (HD) games with the intention of being more selective and focused in the allocation of development resources.

“As a result of a close examination of the Group’s development pipeline undertaken in keeping with this revised approach, the Company expects to recognize approximately ¥22.1 billion in content abandonment losses on its books for the fiscal year ended March 2024. The Company is carefully reviewing its consolidated forecasts for the fiscal year ended March 2024 to assess the potential for impact from the above or other factors. Should revisions to its forecasts prove necessary, the Company will promptly disclose the same.”

This has continued to be a trend for select Square Enix titles. Previously, the same was witnessed for Crystal Dynamics’ Marvel’s Avengers. Reports disclosed that the game cost roughly $63 million in losses following the game’s release at the time. You can read the full report by heading here.

What are your thoughts on Square Enix ongoing financial performance?

Source: Square Enix

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