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Forums - Gaming - Tomb Raider, Sleeping Dogs and Hitman: Absolution declared “commercial failures” by Square Enix

oniyide on 10 September 2013
Incubi said:
oniyide said:
Incubi said:
richardhutnik said:
Panama said:
They did the impossible and made TR relevant in a generation with vastly different tastes from prior generations and yet it was a commercial failure. How not to run a gaming company 101 by Square Enix.

What Square Enix is doing IS what the videogame industry is doing.  They are increasing production costs to try to out quality others and become huge sales.  Idea is to have an immersive experience, and try to match Hollywood with production.  Idea is NOT to keep costs now, but see what your marketing types tell you what people want and give it to them.   Look around, and who is really doing anything well, Ubisoft and Activision?  Not many are.  Others seem to be the small, Indie studios who do stuff, and hit it big.  Idea is to hope you pull off a videogame version of The Purge.  Low dev costs but then it hits and makes a nice profit.  

This is actually what johnlucas has been preaching. Their business models aren't sustainable. The amount of sales these superbuget AAA releases needs in order to make an acceptable profit is ludicrous. If these games are expected to sell in the millions, someone is going to have to tap out and port their games to WiiU. Especially if the Xbone and PS4 isn't selling fast enough. What happens when a single AAA superbudget game tanks like some superbudget AAA hollywood releases sometimes do? The fact that sales on Nintendo 3DS is what keeps SE afloat is nuts. Still they're so far refusing to give Nintendo their full support? 

if anything doing that will increase budget even more since they have to spend more money on a port for WIi U and lets be real, you think a Wii U version will make up for the million copies they didnt sell? Have you seen the sales for multiplat games, none of them are even close to a million. COD isnt even at half. The problem has nothing to do wiht not supporting Wii U and everything to do with having unrealistic expectations and budget. Its freaking Tomb Raider even the best games in the series never sold anywhere near what SE wanted, someone in their is very stupid, hell the series peaked at number 2

I was ofcourse refering to the upcoming generational shift. This could hit certain companies pretty damn hard next year, and by contributing for a slow uptake of WiiU consoles by limiting their support heavily, could hit them hard if PS4 or Xbone doesn't sell fast enough. I'm sorry if I didn't make that clear in my initial post.

ok thats fair, but its not like Wii U is doing that great itself and tech wise, it is far enough behind that SOME games wont be pratical to make for it. BUt who knows maybe they will all sell about the same and we'll just have a bunch of multiplats



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Scoobes on 10 September 2013
ishiki said:
BasilZero said:
It is like they cant make up their mind - didnt they say it was a success not so long ago even though it took a lot longer to sell? lol

I guess they were expecting 10 mil units....

They all didn't lose money on those specific projects... atleast Sleeping Dogs and Tomb Raider, I've forgotten if they said anything about hitman absolution. In a sense, this goes in line with what they said. They didn't perform commercially to expectations, but were critical successes. That's what they've stated since the start. This is pretty much exactly what they've said all along, just a different article spinning it for whatever reason.

However, when you invest in a game you expect an Cost/Benefit of like 2. Meaning you make twice as much as you put in. This, lets you grow, and reinvest money in new/more projects. it's more complex than that as there's much more analysis that's actually used. But, when you're proposing a project in any industry you analyze what you think you're going to make through research. This lets you map your business plan for the future. These 3 games were projects that were in development a long time.

All of the games pretty much made what was put in. Which is bad, not as bad as  losing money. But, not what you want, particularly since SE has lacked any breakout hits to offset this. They've pretty much had games that had games that performed at expectations or below. I believe Deus Ex is one of the ones that outperformed this gen, but even then it didn't even crack 4 million even with DD included. FFXIV however, has also performed above their projections. I'd wait and see if that trend still exists when subscriptions kick in.

That also cost them a fortune to fix. If it didn't perform to or above expectations then I imagine they'd be in serious trouble.




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DarthVolod on 10 September 2013

Should slap this in Anita Sarkeesian's and Jim Sterling's faces. Your strong female protagonists that you claim the industry desperately needs are failures. Tomb Raider can't turn a profit, and Remember me sold ... what? 100k if that?

Not saying you can't have games with strong female leads that will sell (Metroid proves that ... or well, um, at least it did in the past...), but this notion that there is this large vocal group demanding that women take on more lead roles in videogames is a complete fabrication. Gamers judge games on their content ... not whether or not the lead character has boobs (ok maybe it is different in Japan).

Remember Me was a below average game, and a protagonist with a dong would not have helped it sell, and Tomb Raider was a good game, but not a mega hit. Lara Croft was big in the 90's, but that is where she should have been left to die (same with Duke Nukem, but at least Lara had critical success with this game).

On topic, sad to hear that Sleeping Dogs didn't work out. Hitman is a shadow of its former self so let it burn I say.



VGPolyglot on 10 September 2013

And all 3 of those didn't sell too bad.



Scoobes on 10 September 2013
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. "

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?




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jabberjawky72 on 10 September 2013

On a side note, I always kinda wished they would bring Sleeping Dogs over to the Vita, so it could finally have its first AAA open world sandbox game.



zippy on 10 September 2013

So if these games are high budget commercial failures on current gen hardware ,even though Tomb Raider has hit around 4m. How the hell do they think they will make money on PS4/Xbone games with even higher budgets. I wonder if any more devs/publishers will get into financial trouble this upcoming gen, chasing the dream.



ishiki on 10 September 2013
Scoobes said:
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. "

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?

Actually EA is/was suffering from the same issue they have lost more money than SE in last 3 years I believe their 156 million in the red I forget SE. Though that was from they -321 million in 2011. SE I recall, had small profits earlier this gen like 50-100 million a year, and then the big one last year. That trickled into this year.

Ubisoft, posted a 50 million operating loss in 2010-2011 and a similar loss in 2011-2012... though they projected that and they've been meeting upper end of targets the past year

Activision has those breakout hits, SE expected those games to be.



think-man on 10 September 2013

How much is SE paying these people to dev there games???? They wanted FF13 to sell 10 million aswell and didnt happen, guess it was a failure aswell.



 

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NoCtiS_NoX on 10 September 2013

They already said that game development is fine. They just over budget the marketing while expecting 8 millions sales from this.
SE is really a shadow of their former self. I remember them as pioneers they always lead the bunch but now ugh!