crissindahouse said:
that is pretty much an explanation why the games weren't really successful even with the decent shipment numbers:
"However, we were exposed to increasingly severe competition with a number of
blockbuster titles from major publishers, and experienced great difficulties
in price control of these titles from a marketing perspective. We had to
expend considerable incentive programs offered to retailers such as price
protection, back-end rebates, and promotional cooperation costs, which
generated a certain level of shipment quantity but with lower margins
than expected. As a result, provision for sales returns increased
considerably year on year, reaching ¥3,927 million, and was a major
factor in the deterioration of profits.
We do not recognize this situation as a temporary phenomenon that can
be dealt with merely by restrengthening the distribution system, but as a
structural problem in the HD business. That is to say, the financial results
posted in the fiscal year under review reflect an intrinsic problem within
the HD game business model that has come to the surface. "
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This begs the question, why aren't Square Enix's competitors also suffering from the same issues? Why are Ubisoft, Activision and EA not complaining about this same problem?
And if this really is a problem then why aren't Square Enix pushing more profitable distribution models like digital downloads or streaming?
