Square Enix, the developer and publisher behind the Final Fantasy, Dragon Quest, Star Ocean, Kingdom Hearts, Mana series, and more, announced it expects a $140 million loss next quarter as it abandons numerous projects in development.
Tifa in Final Fantasy VII Remake Intergrade (2022), Square Enix
In a press release, Square Enix shared, “Square Enix Holdings Co., LTD. expects to recognize extraordinary losses pertaining to abandonment losses associated with its content production account on its books for the fiscal year ended March 2024, as detailed below.”
The company then provided more details on the losses, “In light of the myriad changes underway in the environment surroundings its Group, to revise the Group’s approach to the development of high-definition (HD) games with the intention of being more selective and focused in the allocation of development resources. As a result of a close examination of the Group’s development pipeline undertaken in keeping with this revised approach, the Company expects to recognize approximately ¥22.1 billion in content abandonment losses on its books for the fiscal year ended March 2024.” ¥22.1 billion is approximately $140.2 million.
The press release concluded, “The Company is carefully reviewing its consolidated forecasts for the fiscal year ended March 2024 to assess the potential for impact from the above or other factors. Should revisions to its forecasts prove necessary, the Company will promptly disclose the same.”
Press release from Square Enix
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It’s unclear what games are getting scrapped. Albeit as noted by YouTuber Endymion a 4Chan rumor detailed that Square Enix cancelled Stranger of Paradise 2, a 2D-HD style Final Fantasy, Dragon Quest Builders 3, and Harvestella 2.
The rumor also claimed that Square cancelled an open world RPG that was in development by Luminous.
Allegedly one of the games Square-Enix cancelled was Stranger of Paradise 2 which SUCKS cause I wanted a sequel so bad.
The first game was so much fun 😩 and a 2D-HD Dragon Quest Builders would’ve been awesome too. This news sucks big time.
Goddamn if I wanted another Stranger… https://t.co/RnzIuDLS9Z pic.twitter.com/JFRg58uyGG
— Endymion (@EndymionYT) April 30, 2024
Interestingly, in a press release documenting Square Enix’s financial results for the nine-month period ending December 31, 2023, the company revealed its “HD Game sub-segment’s net sales for the nine-month period ended December 31, 2023 rose compared to the same period for the previous fiscal year due to the release of titles including Final Fantasy XVI, Final Fantasy Pixel Remaster, and Dragon Quest Monsters: The Dark Prince.”
Screenshot of Final Fantasy XVI (2023), Square Enix
Of note, Square Enix did release Final Fantasy VII Rebirth at the end of February exclusively to PlayStation 5 and it’s possible its performance might have had a significant impact that led to Square Enix’s decision.
The company has not released any official sales figure for the game, albeit in Japan the game’s physical sales are lagging behind previous recent releases in the franchise. For example, Gematsu reports that the game only sold 320,972 copies. In contrast, Final Fantasy XVI, which released in June 2023 had sold 412,895 copies after eight weeks on the market in Japan.
Tifa in Final Fantasy VII Rebirth (2024), Square Enix
On top of physical sales in Japan being down compared to Final XVI, Daniel Ahmad, the Director of Research & Insights at Niko Partners claims that the game’s sales are “underperforming.”
He wrote on X, “Also, not to be that guy, but Rebirth is underperforming sales wise (not that sales performance is related to what that guy said lol)”
Also, not to be that guy, but Rebirth is underperforming sales wise (not that sales performance is related to what that guy said lol)
— Daniel Ahmad (@ZhugeEX) April 11, 2024
Games Industry analyst Christopher Dring reported that Final Fantasy VII Rebirth sales in the United Kingdom were “down 34% over the Remake launch (which released on a bigger platform and during the first COVID lockdown).”
However, he did note that, “Sales are up 6% over the FF16 launch.”
Final Fantasy VII Rebirth is No.2, while the Remake and Rebirth double pack is at No.4. Overall (both combined), Rebirth sales are down 34% over the Remake launch (which released on a bigger platform and during the first COVID lockdown). Sales are up 6% over the FF16 launch
— Christopher Dring (@Chris_Dring) March 8, 2024
What do you make of Square Enix announcing they expect such a huge loss and will be scrapping numerous projects in development? Which projects do you think they will be scrapping?
FF16 had the series’ first openly homosexual player character, except they didn’t tell you he was gay until it was sprung on you later in the game. Though that can’t be a factor in their current financial issues, when I found out the game went woke I decided I didn’t need to buy or play it, and that I should be wary about purchases from Square in the future. I wonder how many others decided the same things.
Lol gotta love when pushing a stupid agenda blows up in their faces.