Square Enix Cut Profit Forecast Due To Sluggish Sales Of A Major HD Title

By Ishaan . October 30, 2012 . 11:01am

Square Enix have made revisions to their earnings forecast for the ongoing fiscal year, the publisher announced this morning.

 

Square Enix cite sluggish sales of an unnamed major HD console game as one of the causes for the revision, alongside sluggish sales of arcade machines in Japan and a delay in launching social game services, which resulted in a decrease of revenues.

 

Also to blame is a 1.1 billion yen ($13.8 million) foreign exchange loss recorded for the first half of their fiscal year due to currency exchange rates in relation to overseas assets.

 

As a result, Square have revised their forecast for the full fiscal year by cutting their their profit forecast by nearly one-third from 9 billion yen ($113 million) to 3.5 billion yen ($44 million).


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  • Paradox me

    They’ve had so many major HD console titles recently that it’ll be difficult to pinpoint which is to blame.

    Yep.

  • James

    Probably Sleeping Dogs.

    • MrRobbyM

      This.

  • malek86

    The only title I can think of, is Sleeping Dogs… I thought it was doing a little better. It’s too bad. Even worse because that would mean Activision is laughing at them now.

    Or maybe it’s some other title. But I can’t think of anything else. Since FF13-2 I don’t think they have published any other major HD games, so it must be that.

    • TheRealMalek

      Hitman : absolution
      Sleeping dogs
      FFXIII-2
      Deus Ex 3

      it’s one of them

      • Luna Kazemaru

         Deus Ex 3 did well tho.

      • malek86

        They are talking of the current fiscal year. Deus Ex came out in the past one, so it’s not that. Hitman is still not out, so it can’t be it. And FF13-2 was said to have had a strong performance in their previous quarterly report.

        So it’s either Sleeping Dogs, or the long-term sales of FF13-2 were lower than they hoped. But considering the amount of the projections cut, I’d say it’s probably Sleeping Dogs, as FF13-2 must have already done its due at launch.

        • $1484028

          “Deus Ex came out in the past one”
          so did FFXIII-2.
          the Japanese Fiscal year ends at the end of March, not December.

          so by process of elimination, Sleeping Dogs is pretty much the only title on that list that applies.

      • http://www.siliconera.com/ Ishaan

        Hitman isn’t even out yet.

        • MrRobbyM

          I laughed.

      • Herok♞

         its not FF13-2 or Deus Ex:HR they both came out last fiscal year.

  • miyamoto

    MS Gundam: Battle Operation by Bandai Namco a simple free to play online game earned $9 million in just a few months. 

    Bring it to NA Sony.

    • Bloodios

      That’s nice and all they seriously should fix that 15fps average framerate…

  • Sakurazaki

    I’m trying to find a balance between blaming and being prepared.

  • Bloodios

    I thought Sleeping Dogs was doing pretty well as I saw it being the number one selling games during many weeks in UK…

  • masaYT

    Hopefully its FFXIII-2

    • Herok♞

      It isn’t, that came out in the last fiscal year and most games would have sluggish 11 months after they came out.

    • Godmars

       Why? Not like its going to stop the Lightning game that’s basically 13-3 much less act as the wake up call Square needs to end their focus on graphics.

    • Luna Kazemaru

      To bad its sleeping dogs.

  • Luis Enrique

    It’s probably FFXIII-2, having their flagship franchise not sell as good as they were hoping is truly a shameful display.

    • CirnoLakes

      Why is your mustache so mesmerizing?

    • Herok♞

       It came out last fiscal year(April 2011-March 2012) so it has to be Sleeping Dogs.

    • $1484028

      1) you’re wrong.
      2) and a little late to the party for the FFXIII-2 bashing.
      A) Wada’s already said FFXIII-2 made money just fine, with DLC more than making up for retail.B) Wada pretty much attributed the last fiscal year’s profits to Final Fantasy XIII-2 and Deus Ex 3.in other words, to be clear, FFXIII-2 came out THE LAST FISCAL YEAR (the fiscal year doesn’t line up with the standard calender year), not the current “the ongoing fiscal year”.the rumor going about is it’s probably Sleeping Dogs (which is more likely since it actually came out this fiscal year).

      • Luis Enrique

         I stand corrected, sir. What a shameful display from my part!

    • http://www.facebook.com/people/Dylan-Ng/100000854638739 Dylan Ng

      Damnit, don’t use dat Chitanda face >.<

  • riceisnice

    That’s why everyone should just forget all that HD nonsense and switch back to SD. Not just because I can hardly read the text on my ancient television.

    • CirnoLakes

      Yes and no, not really. HD is honestly a bad thing to attack since it has little to do with wasted money on graphics. SD generally looks lesser no matter how high or low the graphics are. HD is just the resolution and even 16-Bit games look great in HD.

      That “HD nonsense” is not something we’re ever going away from. In fact we’re slowly phasing out the 720p generation permanently. And I don’t mean permanently in a light hearted, half joking, somewhat figurative sense. In a few years it may become impossible to find new videos and games being made with at least 720p resolutions. And when they do, gamers will complain about it because there’s no reasons why they shouldn’t at least have options for such resolutions. Even Terraria, a modern 16-Bit game, is a game mostly played on HD resolutions.

      And the only move that is going to exist out of HD, it up to Ultra-HD. Resolutions are only going to get bigger and bigger. And we’re never going to move back to SD.

      So what you should mean to say, is that you think it is a waste of time for companies to focus on high graphical fidelity instead of gameplay. With this generation I think that companies are going to find it more and more pointless to push graphics. As people are realizing that gameplay is suffering from it. Back in the release of the Nintendo 64 and PlayStation, graphics were still doing things to make gameplay better. But now we’re in an era where they are truly holding games back. Especially for companies like Square Enix.

      Thus we’re still in the “indie pixel game boom”. And I can see why. But even most of those indie pixel games, are HD. Even if you’re playing the Bit.Trip games, you’re probably playing them in HD.

      • Godmars

        Um, no.

        This whole console cycle has been effected by the added costs of making games at HD resolutions. It virtually killed pixel graphics on the 360 and PS3, and Hironobu Sakaguchi has stated in more than a few interviews that the cost of HD production is crippling. Its why most JRPGs are on handhelds.  

        • CirnoLakes

           It’s most unfortunate that both of you are so misinformed.

          HD merely means that a game is at 720p resolution or above. Terraria is an HD game even though it is 16-Bit. It doesn’t cost very much at all to make something at an HD resolution. It does cost a lot to make something at a graphic level some gamers expect at HD resolutions.

          HD means resolution, not polygons. Bumping an SD game to an HD one can take a PC modder little more than a couple of days, half a day or less if they’re a talented “hacker” or programmer.

          The costs weren’t of HD resolutions. The costs were of the high polygon count, high graphic games that happened to be in HD resolution. It’s so easy to take something from SD resolution to HD resolution, that emulator developers and modders have been doing it for free for years.

          http://youtu.be/r_TxGXIheSw
          This is HD. And it’s the exact same “SD” game, developed at SD costs, in HD. And the people who made this game HD instead of SD, did it for free. It can’t cost that much to make games in HD is hobbyists are doing it all of the time for free.

          • Godmars

             How am I “misinformed” when Sakaguchi has actually attributing keeping to HD standards effecting how he made games?

            http://beefjack.com/news/sakaguchi-hd-graphics-are-excessive-for-videogames/

            Also how are you trying to present an “SD” game when P4 wasn’t made to the same standards as say ZOE2? Yes later PS2 titles addressed HD standards, but if was so easy where are the no-hassle PS1 games in HD? Why did Capcom have to go to a lot of effort to make Street Fighter 2 HD and even force MS to change how they dealt with DLC because of file size?

            HD standards have effected how games are made. All but ruined side-scrolling style titles on consoles.

          • riceisnice

             So the gist if it is…

            HD itself is not expensive.

            What’s expensive is all the details and extra stuff that the developers feel obligated to put in since they have the HD capability.

            Okay, I understand. Doesn’t mean I still don’t hate it.

          • ToxicCupcakes

            You’re right that 720p is just a resolution, but you have to realize that big studios want to put attention to details, for the purpose of realism and eye candy. The higher the resolution, the more detail is needed for eye popping visuals. As of your argument of taking something with a SD resolution and bringing it to HD; it is not easy at all. If you simply upscale the resolution, from its native, to 720p, you would need AA and tons of filters to make the game look decent at best. You would have to rebuild the game in order to make it truly compatible with 720p.

            The P3 video, you posted isn’t a good example. Look at the video description. It tells what that person had to do to make the game look decent. For the sake of not making this too long, I’m only going to point out that he had to patch the game, make the internal resolution 2560×1788 and then downscale it to 1080p.

  • Godmars

    Not getting why they blame – point blame at – one specific title yet wont name it.
    Unless of course its FF13-2.

    But then I also don’t get why they allowed FF14 to become what it was originally then couldn’t comprehend that FF13 suffered from the same flaw.   

    • Aara_Malik_Davoodi

      Developers aren’t prone to naming games that sell poorly (even though everyone knows it’s Sleeping Dogs) because that’s akin to admitting they released a bad game.

      • Godmars

        Never stopped Capcom. Other companies when their titles undersell. Especially ones complaining after a game’s broken a million.

        Never understood why it was allowed to create a business model where millions of a product had to be sold in an industry where regularly few hit a million. Many games had to be best sellers but just weren’t. 

  • Herok♞

    The game is Sleeping Dogs, FF13-2 and DE:HR both came out last fiscal year(April 2011 – March 2012) and they already earned 6 Billion yen off them, so I doubt they care about games that came out in 2011 and have already made their major sales and Hitman Absolution hasn’t come out yet so it leaves only one culprit, that still should be earning something which is Sleeping Dogs.

  • ZEROthefirst

    What happened did Final Hallway 13-2 do poorly!?

    • Luna Kazemaru

       Sleeping dogs

      • ZEROthefirst

        I know it wasn’t FF13-2, I was just trying to poke fun at it a little :D

    • http://twitter.com/AuroraXIII AuroraXIII

      Is that supposed to be an oxymoron?

      Final Fantasy XIII-2 removed the corridors.

      • Evan Groman

        Shhh. Don’t use logic, that’s not how it works around here. This is where we bash anything with FF on the name without playing it.

        (and I mean, I don’t think there’s any way anyone would refer to 13-2 as Final Hallway if they actually played it. If you are a person that thought 13′s hallways were bad, then 13-2 WAS CREATED EXACTLY FOR YOU.)

        • ZEROthefirst

          Shhh. Don’t use logic, that’s not how you respond to people around here. This is where we become unable to realize a joke that pokes fun of FF13 (and a bit of 13-2) that’s just me though.

  • http://altsune.com/ Ovada Bey

    “I never asked for this.”

  • DragonSix

    Putting all their eggs on Sleeping Dogs wasn’t such a bright idea to begin with.

    • http://profiles.yahoo.com/u/HAEBCODVH3BGFIHE47BKNDXD2I Jonathan

       betting all their chips on ONE game usually never works. Hell, they’ve really done nothing to really push HD games this generation.

      It’d be nice if they put as much effort into their console games, as they do with their handheld ones.

  • Impossible2beat

    jumping on the bandwagon its sleeping dogs, its not a mystery many people have explained, and sleeping dogs and darksiders 2 both did very poorly as has many games this year.

    • http://www.facebook.com/people/Dylan-Ng/100000854638739 Dylan Ng

      Just curious, why do they sell quite poorly this year? (Not a gamer/following gaming sales news.)

      • Luna Kazemaru

         sleeping dogs bad timing I guess and well Darksiders because darksiders 1 was just bad

  • OatMatadoQuatro

    Isn’t every new major console game a HD nowadays?

    • Aara_Malik_Davoodi

      The Wii says hello 

  • raymk

    Sleeping dogs wasn’t the right game to bet chips on.  That said they won’t let the brand name die as they’ve already said and it is a very good game.  Shame it tanked so.

  • http://Gematsu.com/ Bruno Silva

    It’s definitely a shame this happened, as I most certainly do not wish for those who work for SE to see their jobs at stake, at any given time. But truth is, Square Enix has been taking some very stupid decisions lately.

    Hopefully they’ll give this some thought and try and change things around in the future.

  • http://profiles.yahoo.com/u/HAEBCODVH3BGFIHE47BKNDXD2I Jonathan

    here’s an idea, make more of them, so they won’t sell so little

    or, make them more like Bravely Default

  • saxophone15

    Funny how so many people think it’s FFXIII-2. They make plenty of money on Final Fantasy despite some fans not liking the direction they are taking it. If you don’t like FFXIII then just patiently wait for an SE game you do like (or ignore the franchise, your choice). There’s no need to be whiny about it.

    • http://profiles.yahoo.com/u/HAEBCODVH3BGFIHE47BKNDXD2I Jonathan

       really, it’s a mix of Square’s relying too heavily on a franchise which in no-way resembles itself anymore, and getting other companies to do the rest of the legwork when they’re busy making more of their new vision for FF that constantly changes.

      In the end, their HD sales suffer, and their biggest franchise becomes less and less respected. Sure, sales are great, but it won’t help it for long, if the rest of their games don’t make enough bank.

      One nice thing with their handheld dept. is that they vary the games up enough, and make great throwback titles that have wide appeal. The sales there are doing better and better; mainly because that division is surprisingly good at what they do.

      Kinda makes you wish they would show the same level of dedication to the console division, but costs and fear of trying anything outside of FF scare them away from the very thought. Which; from all this evidence, and the evidence above, isn’t doing them any better.

      • Herok♞

        You say Final Fantasy no longer reseblems it self but then that brings up the eternal question what makes final fantasy final fantasy, can you answer it, while at least including all main games?

        • https://twitter.com/SaveTheQueenIX Liquid Kaz (Umar)

          emotion. love ….. actually caring about not only the game itself but the fate of the characters, their growth, there internal/external struggles. that feeling of attachment you feel to everything in that game. final fantasy was more than a game it was a feeling. a feeling long lost in the foray of forgettable characters and stories. ff 12 and 13 was fun but lacked charm

          • Nemesis_Dawn

            You just described everything I felt about XIII and XIII-2. I felt emotion. I loved the characters. I cared about their fate.

            Now, XII on the other hand, I might as well have been cardboard cutouts try to do a poor man’s Shakespeare in the Park.

          • https://twitter.com/SaveTheQueenIX Liquid Kaz (Umar)

            i dont know hey, like sazh and snow were the most human and likeable characters. and i must admit, 13-2 was much better in the emotion department i quite liked noel. but i can agree on 12, man … i get they wanted the focus to be on the war and and all these mature themes .. but it fell flat and dry. stories like lost odyssey is much better

          • Herok♞

             The problem with that line of thinking is it assumes that everyone likes the same characters and stories. like with FF7 I could care less about the character and alot of people give FF8 crap and FF1 didn’t have characters to care about yet that is the original FF, so I wouldn’t say emotion makes something what it is since people like different things.

          • https://twitter.com/SaveTheQueenIX Liquid Kaz (Umar)

            i agree with you that people like different things, but then what exactly makes anything, anything? you could say the original final fantasy had no characters to care about , but at a time when video games such as those lacked the ability to tell compelling stories, there were still moments and characters that helped you feel connected to the game, such as matoya or the funny dwarves ( Lali-Ho! :) ); all helped to add connection. i can name at least one memorable moment in every final fantasy before 12, a moment that will make me remember that game forever, like the moment zidane appears at the end and garnet falls into his chest and hits him because she thought he was dead, or rinoa sitting in squall’s lap in ragnarok. all these things worked in harmony with the gameplay and enhanced it. 

            but that is my opinion, final fantasy has always been about the emotion, because that emotion enhanced everything about the game, even if different people liked different things, final fantasy always had that feeling that bridged the gap between what people like

          • Herok♞

            Ok I understand for you Final Fantasy means emotion, however for me I can remember something that will make me remember both FF12 and FF13 even if FF12 isn’t a pleasant memory, also FF13 was a very emotion story when you think about it, the main character is trying to save her sister among other things and I still think it worked well with the game. Lastly most things have something that automatically comes in to you mine when you think about them. For Starwars its lightsabers, jedi, and sith, elements that are always in the main series, for persona it’s high schoolers saving the world and theirsevles, for Halo its Mutiplayer and Teabagging. Beyond Chocobos and moogles nothing in Final Fantasy is recurring which is why I can ask what makes Final Fantasy, Final Fantasy, if you ask someone about the examples I said theres a good chance they will bring up one of the things I mentioned Final Fantasy not so much since the games are to different.

  • Marcelo Henrique Chaves

    Yeah well, i remember back in PSone era when i would buy a game just because it had the SQUARESOFT brand in it. After all years ago, we( at least myself) didn’t had websites to look for reviews and magazines were expensive(still are).
    It’s a shame that my favorite brand is doing so much stupid moves lately. Well, at least they are not alone in this.

  • WingsOfEternity

     Don’t blame just one game. The whole company ITSELF is going downhill. This is coming from a guy who grew up watching his dad play Final Fantasy, and has been a SE-fan ever since.

  • XiaomuArisu

    But Sleeping dog seems to be a very fun game.Were people afraid to buy it because of the words square on the cover?XD

  • http://pulse.yahoo.com/_EUSPDCE22Z6ETYY3W5XRZ2SFZU Darrel

    Their HD games are usually not that great. How they get it in their heads that PS3 gamers don’t want games like Dissidia, Kingdom Hearts, Chrono, Final Fantasy Type-0 and Dragon Quest on PS3, i will never know. Instead we get stuck with Sleeping Dogs, Kane and Lynch, Hitman and some two bit final fantasy game.

  • Helepythia

    I read it wrong, and assumed they blamed a certain (Non-Square Enix) HD game. And I was to reply, What did the Metal Gear Solid HD Collection ever do to you?!?!

  • http://profiles.yahoo.com/u/5O266I6427AQIXPAP5ZQ5DK3GM Bob Meaty

    They can go under for all I care. This isn’t Squaresoft

  • Nemesis_Dawn

    So, let’s see…it’s either Sleeping Dogs…or…

    Sleeping Dogs.

    Really, the demo did nothing for me. It was like a poor man’s Arkham Asylum/City with a cliched Hong Kong plot put onto it. I can see exactly why it’d do badly.
    You know, though Square-Enix, why make some more HD games instead of expecting one game to keep you afloat? I own a Vita, but I prefer games on my PS3 or 360 any day of the week. If you guys actually took the time to make some games that we might want to play instead of all this left over Eidos stuff, maybe you’d make some money again.

  • Göran Isacson

    I wonder what “sluggish sales” means in this case, because I was under the impression that Sleeping Dogs did fairly well for itself? Unless they expected it to sell Final Fantasy or GTA level-copies, which is just… no.

  • dotzeno

    Had to do a search on Square Enix to figure out what HD games they published this year. The count came down to two, which basically means we can point fingers at one of two products: Sleeping Dogs and Risen 2.

    I’ve never even heard about Risen 2, let alone seen it on sale at my local game store. That’s clearly not good news.

    I don’t know what Square has been doing over the last decade. I hope that Versus XIII will change things, but fear that it will do little to change anything at all.

  • http://radiantloki.blogspot.com/ Mark Dinh

    “sigh” Come on Square. Pull through… Don’t want to see my favourite company go. They have been making a lot of bad decisions lately, it just bothers me that they don’t realize it. :/

    • Godmars

       Don’t think they can afford to “pull through.” Be creative or make anything that isn’t AAA. Which you’d think would be a contradiction. 

  • http://www.facebook.com/JaeWhy SasuleUchiha

    Guess Sleeping Dogs will be put to sleep forever.

  • http://pulse.yahoo.com/_LPUW3DGNVWCZ6MVLGHJA377P4M James

    Its not sleeping dogs that game sold reasonably well. 

    • Nemesis_Dawn

      Only in the UK.

    • Herok♞

       and then slowed down which is the problem.

  • Lele Mett

    SE needs to realize that not every game they bring out is going to sell over 5 mill copies like FF, KH, and DQ. Every main FF game has sold over 5mill along with DQ. As for KH. KH1 sold 4mill and 2 sold about 5mill. Maybe they need another big series? Maybe they need to make The World Ends With You into something more? Or bring back Star Ocean?(the people who did 2 and 3. 4 was bad)

    They can’t just have FF, KH, and DQ…those games take forever to make. Kh1 came out 2002 and 2 came 2005? thats 3 FREAKING YEARS! Not to mention FF13 V which has had a good 6 years now. The more they improve on there games, the longer it takes to make. KH3 will come and blow everyone away but we might not see it till 2015. 

    All they really have going for them is FF, KH, and DQ.They need to have a mainline game coming at least once a year or make a new series. If they don’t, they are going to sit there while games like FF and KH are in development and hope games like sleeping dogs bring in money.

    • http://www.facebook.com/profile.php?id=100001059050301 Jermaine Kanhai

       There’s Bravely Default: Flying Fairy. It’s currently selling like hot cakes in Japan.

      • Lele Mett

        I know. I want that game bad…but hey, might not see it for a while in the US.

  • http://pulse.yahoo.com/_BSPD2JPKYKU26WGFW57YFIA4XY Chris

    I believe it was Risen 2 that sold poorly.

    • landlock

       Huh? SquareEnix published Risen 2 in the US? That’s a surprise. I doubt that’s the title they mean. It’s hardly a major console release especially in the US. The European RPGs very rarely do well in the US so I doubt they were expecting much and they only had publishing duties and nothing else.

      Which leaves Sleeping Dogs as the problem.

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