[05/02/2013] Square-Enix financials Q3

[Ohri-Jin]

Tue, Feb 05, 2013 | 09:31 GMT

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.

Square Enix in Q3

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.


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.


Source - http://www.vg247.com/2013/02/05/squ...asingly-difficult-console-market/#more-336628





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Notice the part in red. SE seems to make more profit (at least a decent profit considering) from Side projects we all (well most of us) simply despise. They seem to focus more on side projects than the actual games we want well most of us want. Well they actually make money lol.

Without Eidos what loss would SE really have?

Im confused by this report tbh. SE lost 5.7 billion yen within 9 months last year. Hitman, Sleeping Dogs and FFXIII-2 didnt make enough profit?

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.

This is big money so why has SE still losses.. Anyways I think its interesting.
Perhaps they invested too much money into projects yet to be released like FFXIII-3 and have yet to produce money obviously.
So will they finally make a profit this year? with Tombraider and FFXIII-3?

What do you guys think?



In other news I think this is funny:
[h=2]Tecmo Koei posts healthy Q3 financials, net profit up 291.7%[/h]http://www.vg247.com/2013/02/04/tecmo-koei-posts-healthy-q3-financials-net-profit-up-291-7/

 

[Linnaete]

Banking on Tomb Raider to sell by the truckload. Well, what could possibly go wrong there? Oh yeah, and they should be praying for A Realm Reborn: FFXIV to at least claw back some of the losses and maintain a healthy, albeit small, dedicated user base by this time next year. They're never going to achieve mass popularity with FFXIV, given the stigma of before, but I'm not convinced that I should hold up a sign now saying "BOMBA!".

And I guess the losses they've had to make to get ARR: FFXIV anywhere close to running soon have really hit them, if sales went up, but profits went down. What, is next gen R&D as well as Luminous Engine development also significantly eating away at profit margins as well? I'm sort of willing to bet so.

But, let's face it. What big console games have they actually released recently? Sleeping Dogs and Hitman Absolution have had some success, but uhh, yeah, neither were really big hits, perhaps only enjoying modest success, given how quickly their prices dropped here in the UK. I can't see Tomb Raider being a big rabid moneymaker either. From Square-Enix Japan? Let's see: I suppose Dragon Quest X had done well so far in Japan (only). And other than that, the last thing they released over here would be...Final Fantasy XIII-2. A game that enjoyed the loss of 2/3 of the customers that bought FFXIII, was massively overshipped and took quite a blow to Square-Enix.

Maybe, Square - you should think about getting your arses together with Versus, FFX HD and KH 1.5. It's kind of funny how ungodly long it's taken so far with FFX HD. When your console games so far have only been a slow stream of high quality, but modest-selling Eidos titles, while fans are baying for your blood asking for games they actually want to come out while you're fucking around with how we should want to protect Lightning, it's no wonder you're having problems on the console games front. And tell your other branches to stop being idiots when it comes to marketing and telling FF fans to BUY TOMB RAIDER.

God, how the hell will they handle next gen? I know they have a next-gen engine and all, but they seriously aren't going to make anything with that in under six years without extensive reorganisation of management...

 

[Rydrum2112]

"...the Group is struggling to achieve a fair expected return on its investment."*

actually if the product sucks and you don't make much it is fair.

I read elsewhere this nifty bit of spin "digital entertainment division saw net sales increase 7.7 per cent". Well compare how much you had available digitally last year with this year.


*and yes I know what they really are saying.

 

[Starships]

Oh gosh. Square- Enix are going to get the wrong idea about this and they're going to make more lame cellphone games and DLC aren't they ?

 

[Razberry Knight]

SE is blaming the wrong thing. They havent released much. Tomb raider and all those games nit developed by square have a different audience and therefore may not be as strong. The games such as final fantasy give mire excitement to tye audience their faamiliar with. They cant depend on Eidos for gaining more profit.

 

[Rapture]

... They cant depend on Eidos for gaining more profit.

Which is ironic, because isn't there a thread somewhere in here about how SE was saying the merger with Eidos was possibly a huge mistake that's costing them all of this money?

Idc to be honest. When you put crap out and get nothing back for it, it's pretty much a return on investment.

I wish they'd all stop crying though. The economy is still crap here and things are only getting worse, not better with the climbing gas prices and the fact that most people are finding it hard just to find a job. Its no wonder that people can't afford boat loads of video games. Boat loads of crap video games at that, apparently.

 

[Big Casino]

This has nothing to do with theyre games being poorer than expectations.

Blame the 2nd hand market. Thats what everyone else is doing.

 

[HolyDragoon]

You know how many second hand games I have bought, ever in my 20 years of buying games? Maybe 7. I honestly could not care less if they make that shift. I do believe that killing it off will not be the saving grace that people think it is.

Look at the PC market, digital has taken over there in a big way. Tie game purchases to accounts, charge less for initial software, charge fairly (in this junk economy) for perks, let people play. Have collector's editions for those like myself who still enjoy a boxed copy of their favourite series. (I personally buy less games, but invest more into the ones I do play) This makes it a profitable niche market, yet makes the mainstream full of profitable micro transaction.