Square Enix limps through fiscal '07

[Dayner]

Final Fantasy publisher sees revenue fall 9.8 percent to $1.4 billion, profit sinks 20.9 percent to $89 million.


Earlier this week, Square Enix president Yoichi Wada recognized a need for change within his company, saying to Reuters, "we need to go beyond traditional Square Enix." One look at the game maker's fiscal year 2007 performance, and it's easy to see where he was coming from.

Reporting today on its fiscal year ended March 31, 2008, the Square Enix said both revenues and earnings had dropped off significantly from the year before. Sales dropped 9.8 percent on the year to ¥147.5 billion ($1.4 billion)--a sharp contrast to last year's 31.3 percent gains, which grew revenue to ¥163.4 billion ($1.6 billion). While the publisher was able to curtail a precipitous slump in net income from a year ago, Square Enix still posted net income down 20.9 percent to ¥9.2 billion ($89 million).

Square Enix was hit hardest in overseas markets, where sales had slipped 45.7 percent in North America, 41.1 percent in Asia, and 35.3 percent in Europe during the year. That's in sharp opposition to Wada's professed desire to expand its overseas presence to account for 80 percent of the company's sales. As part of this end, Square Enix said last year that it was actively looking for US publishing partners. In addition to confirming Dragon Quest IV, V, and VI for North America earlier this week, Square Enix dated its Xbox 360 role-playing game Infinite Undiscovery for September 2.

The usual suspects dominated Square Enix's list of titles that performed well for the year. A handful of titles released during its fiscal year 2007 broached the 1 million unit mark, including Dragon Quest IV for the Nintendo and Crisis Core - Final Fantasy VII for the PlayStation Portable. Also measuring out respectable sales were Final Fantasy IV (DS) with 590,000 units in Japan, Final Fantasy XII: Revenant Wings (DS) with 760,000 units in Japan and North America, and Dragon Quest Swords: The Masked Queen and the Tower of Mirrors (Wii) with 490,000 units in Japan and 110,000 more in North America. All said, sales of Square Enix's offline ventures were of 19 percent year over year, amounting to yen 41.6 billion ($402 million).

As for the publisher's online games, the publisher said Final Fantasy XI had hit 500,000 paid subscribers. Online games revenue was down 11.4 percent to ¥12 billion ($116 million), while mobile phone content saw a similar drop of 15.3 percent to ¥6.6 billion ($64 million). The downturn in the arcade business dragging on Sega Sammy, Namco Bandai, and Capcom is apparently affecting Square Enix as well, with the publisher reporting a revenue fall off 8.7 percent to ¥69.1 billion ($668 million). One of the game maker's other big business--publications--held fairly steady for the year, dropping a mere 0.4 percent to ¥11.1 billion ($107 million), while the miscellaneous and sundry category rocketed skyward 126 percent to ¥9 billion ($87 million), thanks to the collectible card game Dragon Quest Monster Battle Road launched in July.

Calling 2007 a "period of transition," Square Enix projected revenues and profits will do an about-face in its 2008 financial year, which ends March 31, 2009. Laying out its future outlook today, the company expects net sales would rebound 8.5 percent to ¥160 billion ($1.5 billion), with net income seeing a far healthier uptick of 30.5 percent to ¥12 billion ($116 million). To pull of this turnaround, the publisher said it was investing heavily into research and development, with an eye toward amping up "advanced information technologies, which are crucial to promote network-related businesses."

http://www.gamespot.com/news/6191525.html?action=convert&om_clk=latestnews&tag=latestnews;title;3

 

[Arctyrael]

The only thing I found interesting is it's research and development in the network related areas. It will be interesting to see how and how soon that development applies to its future business.

 

[Ahkvan]

What happens if you shoot bean counters with beanbags?

 

[Xalioniaf]

Dragon Quest IV for the Nintendo

Didn't realize they still developed for the Famicom over there.

 

[Skaw]

I blame not having worthwhile releases last year. The biggest thing was probably the FFT remake. But well, PSP isn't exactly a platform with a huge market.

 

[Tristam Green]

Hell, I'm sure the sheer number of remakes (or in the case of the PSP versions of FF1 and FF2, remakes of remakes) didn't help either.

Too much of a good thing is usually bad...

 

[Sapster]

They are losing money. So i guess this gives them a green light to remake ff7 for the next generations systems.

 

[Grem]

12 sucked.
Hard.

 

[Calais]

Maybe if they start making fresh new games instead of rehashing the same old few they'd have a better profit margin.

 

[Gerry]

12 sucked.
Hard.

FFXII left an emptiness in my soul ._.

My soul.... ._.

Please erase the memories of FFXII, PLEASE!

It would've been better as an RTSRPG rather than an Action RPG.

Maybe if they start making fresh new games instead of rehashing the same old few they'd have a better profit margin.

The World Ends With You is a great game. Its definately a great new game from SE.

 

[Xalioniaf]

I like saying that FFXII was a fantastic game.
Just not a good final fantasy.

 

[K. Ishitar]

Maybe if they start making fresh new games instead of rehashing the same old few they'd have a better profit margin.

and better customer service with online games as well as maybe listening to consumer feedback concerning their product as their management staff such as landisl aren't too familiar with basic game mechanics

 

[Tiael]

I like saying that FFXII was a fantastic game.
Just not a good final fantasy.

I thought it was a good FF, but different strokes for different folks.

Though I don't scoff at an 89million profit, their lineup was just lacking for '07.
And I think they won't be much better off this year, unless DQIX and FFXIII release, those and their new KH titles.

 

[Altheya]

Looks like I have to save harder to buy the hardware for all these potential goodies.

 

[Tim Wakefield]

I like saying that FFXII was a fantastic game.
Just not a good final fantasy.

FFXII would have been good if I had never played XI. Grinding away at mobs for endless hours while I waited for a party in XI was similar to smashing two rocks together hoping for a diamond in the middle. At some point I just said "WTF". Like X and XI had a bastard child.