Square Enix has admitted it expects to have lost a staggering 22.1 billion yen (nearly $141 million) in its 2024 fiscal year, which ended this past March. The reason for this is what the company is calling “content abandonment losses.”
While Square Enix doesn’t specify any further than that, it very much sounds like it has cancelled (or at least re-scoped) some of its in-development games. At the very least, we know, per IGN, this only impacted its HD games division, which covers console and PC projects, so it seems its mobile games have been unaffected.
In a meeting held on March 27 (the details of which were only shared on April 30), Square Enix explained this was due to the company revising its approach to developing HD games, as it wishes to be “more selective and focused in the allocation of development resources.” This lines up with what Square Enix president Takashi Kiryu said back in February, where he revealed plans to overhaul how the company makes games in order to improve overall quality and profit margins, per a Bloomberg report (via VGC).
When Square Enix shared the financial results for the six-month period ending in December 2023 (via Business Wire), it showed that while overall sales were up by 0.8% compared to the previous year, profits were down by roughly 42%. Final Fantasy 16 sold three million copies in its launch week in June, which Kiryu said was “in line with our expectations” in an August financial results briefing, but he was reported to have told analysts the game had failed to meet Square Enix’s high-end expectations, in part due to slow adoption of the PlayStation 5 (per Bloomberg).
Square Enix obviously hasn’t named precisely which games have been affected by its revision. At the very least, we can probably assume big name titles like Kingdom Hearts 4 and the third entry in the Final Fantasy 7 Remake trilogy haven’t been cancelled. Those are highly anticipated releases and the sort of games Square Enix will expect to turn a profit. If anything, it could divert its resources to the development of those games.
The company’s next high profile releases are the Final Fantasy 14: Dawntrail expansion in July and Visions of Mana, which is slated to launch either in the second or third quarter of 2024. It also has two Dragon Quest projects in the works—Dragon Quest 12 and a remake of Dragon Quest 3—but both of them have been MIA for a long time.
