Square Enix Q1 FY2014 numbers: extraordinary loss.. Praises Mobile/Social/Browser

[NiKKoM]

Akvod said:

badgenome said:

Well, of course it's bullshit. But as far as I know the only criteria is that the loss be non-recurring, and technically they can only cancel those games once.

That's not the definition of Extraordinary Loss in US GAAP. Dunno about JP GAAP, but your definition is probably wrong.

"non-recurring"? I'm sure that at least 1 game is canceled a year for companies.  

We think its cancelling games because they explained the extraordinary loss in the financial numbers last quarter before this one: 

Wada says that Square Enix’s revenue model is outdated and that the company’s selling capacity has been “far weaker than we ever imagined” in North America and Europe. As a result, Square Enix are incurring an extraordinary loss in an “effort to sort out items not achieving expected revenue levels, through scrapping those items and terminating production”.

 

Some of the content being scrapped was in development at studios in Japan. A loss of more than 2 billion yen originates from Japanese studios, where certain productions have already been halted and work scrapped. Additionally, Square Enix say that they recently launched a new division in the U.S. to develop casual games for phones, but were forced to close it down after things didn’t go well. The company expects a 1 billion yen loss as a result of its closure. Total losses resulting from this “Loss on Disposal of Content” at Square Enix amount to 4 billion yen.

 

A further loss of 3.5 billion yen is expected from “Loss on Evaluation of Content,” where Square will make downward revisions to their prospective yields for every game title and overhaul their business models. A 2 billion yen loss in this regard will come from Japan and 1.5 billion yen from Europe and North America.

http://www.siliconera.com/2013/04/08/square-enix-detail-where-their-losses-are-coming-from/