Significant Losses Prompt Square Enix to Reevaluate Video Game Development

Video games are changing

Our video game giants only repeat that the industry “is changing”, and that investments are not always rewarded with flamboyant results. Of course, this speech, generally included in press releases explaining the numerous waves of layoffs, is also based on facts. Square Enix, the Japanese juggernaut that recently released Final Fantasy VII Rebirth on PS5, said it expects “extraordinary losses” for the fiscal year just ended. The reason for these losses? “Content abandonment”. Square Enix has indeed decided to cancel (unannounced) projects, which should result in losses amounting to more than 22 billion yen, or approximately 132 million euros.. This decision was prompted by the “myriad of changes” affecting the video game industry according to the publisher, which reiterates its desire to be more selective regarding the projects validated in the future.

See Final Fantasy VII Rebirth on Amazon

The Board of Directors of Square Enix Holdings has voted, in light of the myriad of changes underway in its group environment, to review the group's approach to high definition game development, with the intention to be more selective and more targeted in the allocation of development resources. (…) Following a careful review of the group's development pipeline undertaken in accordance with this revised approach, the company expects to recognize approximately 22.1 billion yen in content abandonment losses for fiscal year ending March 2024. Square Enix, press release

Reboot

Certain choices by Square Enix have been particularly criticized in recent years. We remember Babylon's Fall, a cursed project made by PlatinumGames, or even FoamStars, whose sales would be lower than the firm's initial projections. Even Final Fantasy VII Rebirth, Sony's much-hyped PS5 exclusive, wasn't the tidal wave that might have been envisioned. Several analysts have also declared that it had sold less than expected. The Japanese giant obviously has more than one string to its bow to regain the love of the public. We have also seen it move closer to Microsoft recently, with the arrival awaited by fans of Final Fantasy XIV Online on Xbox.