http://www.vg247.com/2013/02/05/square-enix-financials-%C2%A55-7b-loss-amid-increasingly-difficult-console-market/

Square-Enix financials: ¥5.7b loss amid ‘increasingly difficult’ console market

Square-Enix had a strong run of IP last year, but its latest financial report makes for uneasy reading. The Japanese firm has published a loss of ¥5.7 billion for the nine-month period ended December 31st 2012, and cites the increasingly difficult console market as a key factor.

It’s an about-face for the company, which posted a ¥5 billion profit year-on-year for the previous period, begging questions about the console market’s volatility in the run-up to next-gen formats.

Although profits were down, game sales were up from ¥95.7 billion to ¥102.7 billion, in a year that saw Hitman: Absolution, Final Fantasy XIII-2 and Sleeping Dogs go to market. It also published Call of Duty: Black Ops 2 in Japan, to no avail.

The company still has high hopes for its year-end financial report – presumably as Tomb Raider has yet to launch – with its net profit projection sitting at ¥3.5 billion, which is a 42.2% year-on-year decrease. Still, black is better than red.

In a statement issued this morning – via GI.biz – Square-Enix discussed its slumping financials:

“During the nine-month period ended December 31, 2012, the Company has not recovered the operating loss posted in the six-month period ended September 30, 2012. [This is] primarily due to the increasingly difficult condition of the world-wide console game market, under which the Group is struggling to achieve a fair expected return on its investment.

“On the other hand, content for other platforms such as PCs, smartphones and SNS such as ‘Sengoku Ixa,’ a browser game, and ‘Final Fantasy Brigade,’ a social networking game for Mobage, are generating an acceptable profit.

“In addition, newly released game titles, such as ‘Kaku-San-Sei Million Arthur,’ a social networking game released in April, 2012 serving more than 1 million registered users, have been expanding at a satisfactory pace. Registered users of Final Fantasy Artniks,’ a social networking game released in November, 2012 for Gree, exceeded 1 million at the end of December, 2012.”

We’ll have more on this report as it comes.

Year-on-year profits are up ¥5 billion for the nine-year period ended December 31st 2012.

The company’s financial project for the end of year is ¥3.5 billion, which is down 42.2% year-on-year. The company is still banking on big sales of Tomb Raider.

Game sales were positive for the period, up ¥95.7 billion to ¥102.7 billion.

Square-Enix cites, “the increasingly difficult condition of the world-wide console game market” as a key issue in its financial report.

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see they need to make more social and mobile games

No worries. All the iOS games will save them.

And it will only get harder for them in the next gen. Sony should consider raising its stake in SE to 51% in a few years.

That's a loss of ~ 55 million dollars. Not good. I know sleeping dogs sold less than they expected, which probably means it sold a lot less than they expected.

If hitman is tracking correctly here, it's the 2nd highest selling hitman and is still selling, so I doubt that's the problem unless they were being unrealistic.

FFXIII-2 sold ~3million which is about 75% of X-2 (overtracked here). But still with price drop, that's not that much in sales, and they wouldn't have.

Maybe all the things selling at "acceptable" levels sold less than they expected to across the board.

What can I say, release Final Fantasy and Dragon Quest. On PC, that's my dream, heh.

LOL, like Sony doesn't have enough debt.

Square-Enix will rely more and more on Microsoft with high budget next-gen projects and the fact that MS is gaining traction in the West they can't afford to play favorites between Sony or MS

They honestly should seek better ties with Nintendo too. A Nintendo x Square-Enix RPG would dwarf Kingdom Hearts' sales (old news) or even Final Fantasy by itself.

"increasingly difficult" means to me as a gamer "increased degeneration of final fantasy". Make FF the way it was in the post-ps2-era then the people will still buy it - keep it the way it is and you will end up making games only for mobiles.

This is because of the smartphone game and the announcement of Final Fantasy 13-2 and 13-3 witch nobody care about them instead of releasing Final Fantasy Versus.

FFXIV: ARR will save them.

westernization is an epic fail