Despite Strong Sales Tomb Raider, Sleeping Dogs, Hitman Below Expectations

By Ishaan . March 26, 2013 . 10:10am

Earlier today, Square Enix announced that company president Yoichi Wada is stepping down from his position, alongside a report that the publisher is expecting significant losses due to sluggish Western sales and arcade performance.

 

In a report that discusses these losses, Square Enix share the titles of the games that fell short of expectations: Tomb Raider, Sleeping Dogs and Hitman Absolution. Despite strong sales, all three games have failed to sell as well as Square Enix hoped they would.

 

Sleeping Dogs, which launched in August 2012, has moved 1.75 million copies to date. Hitman Absolution, which followed in November, has sold 3.6 million copies to date. And finally, Tomb Raider, released earlier this month, has already moved 3.4 million copies. The aforementioned figures don’t take digital sales into account either.

 

Despite the high critical acclaim, these games have failed to meet their targets, Square say. In particular, sales in North America were weak, ending up at two-thirds the amount sold in Europe. Additionally, price pressure was strong, which forced Square to spend additional costs on price protection.

 


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  • malek86

    I think Squenix is starting to pay for their habit of lowering game prices too quickly.

    Anyway, if 3.4 millions in one month wasn’t enough, someone at the company needs to rethink their budgeting model.

    • Pyrotek85

      Yeah I’m not sure what that’s about. Tomb Raider sold almost twice as many copies in a single month than Sleeping Dogs did in 7 months, just what was their target anyway?

  • http://www.facebook.com/Asch91 Mohsin Faiq

    Solution: Bravely Default: Flying Fairy

    • Lilith

      Cue angry mods in 3, 2, 1…

  • Akimitsu

    1.75 million for a brand new IP is great and I can’t believe they thought it would be selling a lot more than that. I wish we could see their sales forecasts for the games.

  • Raharu95

    Here is your Solution Square… LOWER YOUR FREAKING EXPECTATIONS! This flag has been raised too many times already, can’t you see that your sky high expecting are delusional?

    • 60hz

      expectations just means how much we need to make to break even – my guess is that TR cost a ton to make and it was probably the nail in the coffin that caused the prez stepping down…

      • Pyrotek85

        It seems to be doing rather well though, I have to wonder what it cost to make. At least the sales are backed by good reviews too, some games sell a lot initially on the brand recognition and then bomb afterwards when people realize it’s horrible.

      • Raharu95

        Mmmmm… that kind of a deceptive use of the word expectations, but I understand. Then they just need to lower the cost in their game making. they are going to be selling for the same price no matter what at the beginning. Then again those games were of excellent quality, so we cannot complain, as every dollar they expend on it was worth it. I’m really not sure what they could do in this situation then, and they are probably as bewildered as we are. They make good games, and they end selling excellently, but not enough to break even. Is a Paradox of thebig game making industry of today, i tell you :/

        • Locklear93

          Actually, I don’t think 60hz is correct. I believe your original interpretation of expectations is correct. The “expectation” in releasing a game is not to break even, and since this is a financial report, these numbers ought to be reflecting projections of how Square Enix will profit and grow the business. I’m pretty confident that you’re right, and that they’re simply not realistic in terms of what the games will sell.

      • sandra10

        Yeah, that’s not true at all. Expectations are exactly that – what they predict to sell. They calculate how many copies they need to sell to break even since they know their costs (projected marketing and development budget, royalty fees, shipping costs, etc.) and they know how much money they receive from retail and download games.

        They’re two different numbers and they’re both used to determine whether or not to start/finish a project.

      • Xerain

        I’m far from an expect but my understandings are thus:

        Expectations aren’t about turning a profit, they’re about keeping your investors happy while you use a lot of their money working on a big project. Big projects are riskier because you’re putting more eggs in one basket. In general, you woudl make more money if spend 10 million each on 2 games that will make 15 million (5 mil profit x 2 =10 mil profit) than 20 mil on a single game that makes 25mil (5mil profit.)

        So basically “This is how much money we are going to spend, and this is how much we are going to make, which is why the money is better spent on this project than some other project that would not make as much.” These become part of how much the company expects to make in a quarter, and DOES effect it’s stock price. Continued failure to meet expectations means you’re failing as a leader even if the game does profit.

        Wada, obviously, has unrealistic expectations. Thus I agree with the statement “LOWER YOUR FREAKING EXPECTATIONS,” because having accurate expectations is a key part of his job… and it woudl see he’s not very good at it. Which would be why he’s stepping down.

    • Wesley Kenneth Houpt Mattingly

      They’re Japanese, you obviously don’t understand Japanese culture very well. While a good point, it is actually a moot point to make due to it being a cultural difference.

      • Raharu95

        Do Forgive my ignorance. Do you believe you can explain to me what is with the Japanese Culture that causes such expectation?

        • Riseabovethesky

          Maybe lots of sake?

        • Wesley Kenneth Houpt Mattingly

          http://en.wikipedia.org/wiki/Suicide_in_Japan
          http://en.wikipedia.org/wiki/Face_(sociological_concept)

          These 2 links will help the 22 of you that seem to be lacking in understanding on a widely known subject. Man, watch a foreign movie or something. Can’t believe their are really that many people that don’t know.

          • Raharu95

            O_- What Exactly does suicide have to do with the subject at hand? Having Deliriously High Expectations does not exactly help their image either. So I still fail to see your point.

          • Wesley Kenneth Houpt Mattingly

            Maybe you are incapable of reading, or is English not your first language? Stay ignorant, you’ll do the world a favor….

          • M’iau M’iaut

            Take your own ignorant and bigoted comments to another site. Warned.

  • http://darkchaplain.com/ DarkChaplain

    All three of those games were solid and well-worth the money. Especially the treatment they got on PC were miles ahead of other publishers’ fallout.
    I just hope they’re going to continue those franchises properly.

  • KingGunblader

    It saddens me that a game that sells more than three million copies isn’t a success.

  • ZekeFreek

    There’s something wrong here. These look like great sales numbers, how high were their budgets that this is failing?

    • Jeremy Barnes

      Seems like they expected these games to save them from the effects of years of alienating their fans and terrible decisions.

    • Ehren Rivers

      There IS something wrong here. For one, Square’s forecasts for many of these games were a bit over-zealous. For two, what barely anyone seems to be reporting is that the massive loss they are incurring is due to the cost of completely restructuring a large portion of their company (if not outright the whole damn thing). It really pisses me off how that part is just being left out.

      Source: http://www.polygon.com/2013/3/26/4148094/square-enix-ceo-yoichi-wada-resigns

      It’s not that these games failed hard, it’s that they didn’t do well enough to offset the costs of changing their company.

      • Luna Kazemaru

        media spins *trollface*

        • Ehren Rivers

          If it were a media spin you’d think it would be in media. [/Counter trollface]

          At this point it should be called a media nap. [/Dolan hurrrface]

          • chipsndips

            This IS media. Almost anything where you obtain info is some sort of media. You just failed.

          • Ehren Rivers

            …No I didn’t. It was a joke, just like Luna’s comment. Get a sense of humor, dude.

          • chipsndips

            Sarcasm is hard on the internet, man. Guess I failed. =(

          • Ehren Rivers

            No worries. Yeah, I know I was joking and I am pretty sure Luna was too. Actually, I think Luna’s comment may have actually been joking that sites leaving this information out was a media spin, rather than the information provided via places like polygon being a spin. Either way, diggleditches.

      • ZekeFreek

        That could be.

    • SirRichard

      It is, arguably, the greatest problem facing the industry; spending far too much in an attempt to make the game sell well, ballooning the amount it actually has to sell to the point where it simply can’t do it.

      We’ve seen this time and again this generation, look at EA: a company their size and with so many talented studios and valuable IPs at their disposal should be thriving. But they’re not, they’re suffering failure after failure, not making as much money off their games as they should be. Because they spend far too much on each game and can’t make it all back. It’s not their only problem, far from it, but it is one of their biggest.

      Seems to be the same case here, almost.

      • Calintz YT

        Blame shooters, no really.

    • outlawauron

      There is something wrong here. The numbers above are what Square wanted to sell, not what they sold. That’s why there’s a big disconnect.

  • Hollowkoopa

    From a normal person view. These sales look pretty good.

    • http://steamcommunity.com/id/noumi_kud Kudryavka

      Kinda struggling to see how exactly they think too. Seems good to me; I wonder how much they spent making those titles.

  • ZekeFreek

    ,g

  • negineBIT

    Numbers are not important, Squeenix, when will you learn?

    Aren’t satisfied customers enough for you!?

    • DesmaX

      Well, maybe they need money to maintain themselves

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

      Let’s not make ignorant comments, people.

    • Lexaus_the_Alchemist

      You have to satisfy customers while selling numbers, otherwise they can’t make more games in the future.

      Just having 100 satisfied customers won’t fit the bill for the next game (an exaggeration).

  • DesmaX

    Well… Hope the games, at least, payed themeselves

    • 60hz

      below expectations usually means they are not profitable.

      • DesmaX

        Hm… That’s a problem. If I remember correctly, Mafia II managed to just pay itself, even if it sold, like, 2 million copies?

        Makes me worried about the future, actually

        • Locklear93

          I’m not convinced 60hz interpretation is correct. Publishers “expect” to do better than break even. This is a fiscal report; their expectations ought to have profits included, so the shareholders know what the company’s plans for growth are.

  • raymk

    The same thing happened with Gears of War 3. The game sold 3 million within one month(or week) and that was still considered bad sells. I Guess they were aiming for 6 million in sales or something. You have to remember bigger budget games take more money to make.

    • Pyrotek85

      They have to remember we don’t all have money trees in the backyard either. Not everyone can buy the games immediately on release, and we had a lot of big releases recently.

  • Romored

    Start by spending far less to produce your games and concentrate more on the gameplay than on the graphic side. Then we’ll see if they’ll reach your expectations or not.

    • http://www.ihasnowebsitez.com Satonaka CP-Four

      The sad thing is that they already set the bar ridiculously high in the graphics department that if they were to lower them now for “better gameplay” you’ll have the “graphic whores” complaining about it.

      They put themselves into a corner and there’s no way to get out of it without taking a few hits. So even if they were to go that route which im sure the majority would love to see, the real question is now, can they take them?

      • http://twitter.com/AnthonyFoster5 Anthony Foster

        There’s plenty of things they could do without breaking the bank on the art/tech. Like make a Bravely Default -esk game for consoles that uses painted concept art for backgrounds, that’s got to be cheaper then making wholly 3D environments.

      • Romored

        I think they should change their approach: invest the same capital in more projects instead of focusing everything on a single one (e.g., use the Tomb Raider’s budget to produce 3 games instead of just that one). They must increase their offer, cater as many niches as possible and gather a higher amount of potential buyers. The big Western developers have been offering all very similar kinds of games (all very expensive), and the market is now overfilled.

    • revenent hell

      I couldn’t agree with you more.
      Don’t get me wrong its nice to play characters that are more than sprites but you cant forget gameplay in the process. Back in the day gameplay had to be solid to sell because lord knows things could only look so good but the evil trade off was for one the other lacked…..
      Now days it should be more than easy to incorporate the two. Really im fine with not playing a character that could pass as a neighbor of mine.

  • British_Otaku

    Oh god, we have another Capcom/EA on our hands putting too much money into marketing (perhaps development on the side) and expecting 5 million copies sold to cover for the costs.

    • chipsndips

      Except Capcom actually does cover the costs…

      • British_Otaku

        I’m not convinced that it’s true in the case of DmC: Devil May Cry (projected sales of 2 million), which appears to be shy of 1 million and underselling relative to DMC4 in Japan and the UK.

        Resident Evil 6 sold much more, but as long as the anticipated sales are/were higher or the publisher states that the sales are below expectations, I will assume that the company overall are not pleased and likely to take measures.

        • chipsndips

          I think they met their goals on RE6 and ORC. DmC…eh…yea…but they meet expectations more so than Square has. Square’s been one disappointment after another, and it’s due to their flipping budget.

          I don’t wanna talk about EA because they do a shiz ton of things wrong these days.

          • British_Otaku

            It isn’t really about who is doing worse. The fact that EA and Square Enix had their CEO and President respectively step down speaks loudly even if Sim City has never sold faster and Tomb Raider reaching over 3 million in a month (surpasses the lifetime sales of most other games in the franchise: http://www.bit-tech.net/news/gaming/2009/04/24/eidos-shows-lifetime-sales-for-tomb-raider/1 ) .

            Capcom, if not in trouble already could be in trouble soon. I hope Monster Hunter continues to do well for them as long as the games are well done. Also, that Ace Attorney does well.

          • chipsndips

            Now that’s a respectable answer, and true. Good thing that UMVC3 finally reached expectations. I think Capcom’s gonna be ok for a good while. Here’s hoping we get good MH sales. I’ma be contributing to those numbers as soon as I can. ;)

  • Göran Isacson

    Holy Balls how much can a game cost to develop if THREE MILLION SOLD is “below expectations”? Like, if you don’t make your money back on three million sold what kind of expenses ARE you incurring here, solid gold toilets for every single member on the team? Diamonds for breakfast? I just… I do not know what even.

  • Chris Lane
  • Brion Valkerion

    Those look like pretty good sales for: A new IP, 8th or w/e # in a series, and an effing reboot. Seriously wonder what their goals were? 3mil for Dogs? 5 for Hitman? 8 for TR?

    Hopefully this does not turn them away from these series. They are all 3 greatly reviewed games. Dont like sandbox games so sleeping dogs wanst a buy for me, and never been into TR or Hitman but they definitly steaked a claim in the gaming indusry with these 3, hopefully they dont turn them away in favor of Final Fantasy 13-4 mobile edition with $190 of dlc…

  • d19xx

    Are they expecting COD level of sales?

    I think most will agree that those sales figures looks good. But if they have overblown their budget then that is indeed a problem.

    • http://www.facebook.com/people/Stephen-Mc-Devitt/100002626261475 Stephen Mc Devitt

      CoD’s target demographics are brain-dead morons who only want gun-toting sausage-fest multiplayers.

      • Luna Kazemaru

        Nice generalization pretty sure I’m not brain dead and I’m pretty sure I don’t lack intelligence like you clearly must do to have to generalize a fanbase.

        Could it be the target fanbase is for a arcade like shooter? Well shit it can’t be that’s just illogical everyone who plays that game must be a fucking moron.

      • M’iau M’iaut

        Drop the insults and misplaced anger now please. What business is it of yours who plays a game and why they like it. Warned.

      • revenent hell

        Like most games in the world the targeted demographic is/probably was males. Sorry ladies, I know we can be gamers/like these games to but the majority of “gamers” are indeed males, especially as far as the west is concerned, and far out number females…… anyhoo that’s whom id assume CoD went to target .
        Though as far as my own experience goes with a CoD game…..we wont talk aboot.

  • Ni

    If 3 millions sales aren’t enough they are expecting what? VIII level of sales or maybe COD level?

  • Kuro Kairi

    sales arent everyting, it’ll only get you so far if you meet the expectations both high or low, but making a great game that people recognize as such is another thing: it builds consumer trust in quality, fanbases and even if you don’t reach expected sales its worth to invest further into the game because of an even higher potential. There are many great games that remain strong even though their first titles where a financial loss, square wouldn’t be where they are if they haven’t made all those great treasures of gaming.
    The worst thing you can do is let a good game go to waste, and this I’ve seen plenty of.

    So … pretty much the solution to everything is to make great games! Not as easy as it sounds since, mostly people in charge think the simple formula is to copy that one successful game without even knowing what makes it successful instead of listening to people who actually play games and know what makes a game fun, even though they employ them.
    The ugly truth.

  • Suriel Cruz

    As a Square Enix fan and gamer, they should make more games with less graphics, but still HD(good looking) and focus more on the fun and progress of the story and characters development on the SAME GAME. I really miss the HUGE amount of content a Final Fantasy 4 till 12 have. For example, I’ve been playing Xenogears a quite while now and let me tell you; “I REALLY WISH TO SEE THAT GAME ON HD!!!… GOD IS AMAZING!” The story, the characters, the AMOUNT of content everything makes it worth the money and the time to let my friends know how awesome it is. I mean, the games this days offer more of a ‘love at first sight’ rather than a ‘I will never forget’ sensation. Another thing that makes this games lose money is the addition of DLC in a LATE very LATE WEEK after the game release, they should make the DLC available the same week as the game’s release. I was really surprise how long Tomb Raider for an Action game is, but in a couple of months, you’ll need to let me know ‘where?’ to remember.

  • FitzpatrickPhillips

    Thank you, CoD. Not bashing the game, but in terms of financial issues, it tainted the views of publishers/developers when it comes to sales.

    • Luna Kazemaru

      If it really did they would be wanting sales to be in the billions but no

    • http://www.ihasnowebsitez.com Satonaka CP-Four

      Those games shouldn’t even count. Not everyone has the mentality of buying 4 additional map packs +5 guns/outfits as a “full 60 dollar” release.

      Selling 13 mil of those games is a joke and we’re all to blame for that, even if you’re like me, who has never bought a single one of those games, we’re still all to blame for that because those companies factor us in when they see “13 mil sold” whether we like it or not.

      • Luna Kazemaru

        says the person who knows nothing of a cod game yet you can say its just 4 new maps and guns. So much irony how people can talk shit about games they haven’t played.

  • Jason A

    Just localize your japanese games, quit trying to pull a Bandai. Look at what they did, went back to their roots, now they’re rocking.

    • Luna Kazemaru

      because bringing over their japanese games will mean a thing. you will just see them making the same statements

      • Calintz YT

        Will they be the same false statements you’ve been making?

        • Luna Kazemaru

          Ok i said I wouldn’t but I’ll take a shot how is this a false statement when SE acts like 3.4mil in sales not good. How will Japanese games fix that when they would be lucky to even break a 1mil. please think before saying a statement is false

  • Juuu

    It completely blows my mind that the gaming environment we live in today can consider multiple millions of sales [without digital counting!] “below expectations.” Man. Can’t help but feel something’s gotta change….

  • http://www.facebook.com/magius.necros Magius Necros

    Next Gen is gonna bankrupt many companies due to expectations.

    • chipsndips

      Game play over graphics. It’s cheaper AND more fun. Then people wonder why Nintendo’s still around. >_>

  • eilegz

    the industry its doomed, and next gen wont be better… how can over million on sales its “below expectation” for a new franchise, they expect COD numbers?

    • Luna Kazemaru

      CoD numbers are in the billions which none of them even expect the make =_=

      • MonsieurEek

        You keep saying this, but it’s an absurd claim that isn’t true at all. According to Wikipedia, the entire CoD franchise sold about 100 million units making it one of the best selling franchises of all time but still an order of magnitude less than what you’re saying. For some perspective, the entire human population of earth is around 7 billion people.

  • UUDDLRLR BASTART

    When millions sold are not enough that is when the smell of an industry wide crash is in the air, kids.

    1983 smelled much the same.

  • MrSirFeatherFang

    With this “disaster” in terms of sales, SE will now make moe-centric games. Man, can you believe a moe game with a gigantic budget?

    • M’iau M’iaut

      Well considering both Square and Enix have roots working with ecchi games, one could consider it them ‘responding to their real fans’. – smile and duck!

    • DesmaX

      Didn’t they already made one for iOS?

      It had something to do with robots, or something

    • Warboss Aohd

      if dat happenz, i’m callin’ in a favor from my humie contact in da Imperium o’ Humies ta call in a Exterminatus on Earth.

  • Rick R

    3.4 million sales in just a few weeks…not counting digital sales=not enough. The **** Square Enix?

  • HilariousNPC

    Expect mass quittings, firings, and a general takeover by the Japan office.

    Then prepare for a return of the general cluelessness that followed Square from FF9 to FF11.

  • Ace

    I love how Square Enix is trying to blame the consumers for their deficit….

  • Nivans

    well damn, im sure TR fans were happy with the 3mil sales. But SquareEnix isnt!, Well SE was happy with all these FFs and I sure as well wasn’t!

  • Richard N

    Eh, as someone who knows nothing of finance, I is confused.

    Ah well, I’m just worried this is gonna hurt the chances of getting a Sleeping Dogs sequel.

  • FetusZero

    wait.. that’s.. below expectations? Holy cow, My entire neighborhood doesn’t have enough fingers and toes to count the number of publishers and developers who only dream they could ever even reach that many sales.

  • Peter Le

    3.4 million… In less than a month… Not including digital sales… Still not enough… We’re done here.

  • Aoshi00

    I don’t think there’s anything wrong to have high expectation, but w/ so many Triple A releases recently (MG Rising, Tomb Raider, Bioshock Infinite, Gears Judgment, to name a few), and game prices dropping so quickly weeks after release, people could only buy so many games day 1.. even if their games are amazing and totally worth $60..

    Tomb Raider, Hitman Absolution, and Sleeping Dogs are all amazing games though.. I only played a little Hitman, but love both TR and Sleeping Dogs, even bought the TR artbook.. both games offered very immersive experience and narrative, I just couldn’t put them down.. To me that’s saying a lot as I hardly finish games these days w/ so many games and so little time..

    People have so much backlog sometimes they just can’t play everything new.. Luigi’s Dark Mansion just came in the mail yesterday.. when Wii U kicks into gears and PS4 coming later, there’s just way too many games across all platforms..

  • http://ryuz4ki57inenglish.wordpress.com/ Thomas FROEHLICHER

    So, now their western bullshit sent them deep in the red, perhaps we’re at last gonna have some Japanese games now, like the ones they refuse to localize.

  • artemisthemp

    Tomb Raider wasn’t a bad seller (2 week in a row nr. 1 in UK sales charge).

    I really hope Square Enix ain’t gonna decided to cancel Tomb Raider 2/plans for it duo to “low sales”

  • enorka miho

    I don’t know what exactly went wrong with square enix… Is it the restructuring? Conversion rate? Or its just that they simply want to make allot of profit without even understanding the situation? But my guess is that maybe they had invest too much in something that does not make profit and is now trying their hardest to cover their burnt arse… ?

    So, I think they should do something like Namco did, by not doing all those unnecessary advertisement… Because that is not going to help and it cost a bomb! And, they should really start focusing on making games like they used to with tinges of innovation… Also if I am not wrong, as far as I know Namco was one of the company that does not loose money badly last year..

    Anyhow, let us see what the new CEO can do.. Because Wada has been talking allot about westernizing crap without even understanding what it really means.. He was too obsessed with that till the extend where all the goals and the people were abandoned.. Then ended up bringing everything down the spiral of utter confusion.. The whole company is probably full of people that are stripped out of passion they used to have..

    Lastly, the market is still there, though not as big as those mindless shooters… But, it can still warrant them good money if SE can really control their spending and manage their people by bringing them up as Square soft used to..

    Ah well, good luck SE… And to the new CEO.. Try not to set the budget too high.. You are going to kill yourself..

  • Lonewolfz

    Lower expectation = Lower cost = Lower Man Power = Lower Game Graphic Quality = Lower Animation Quality = Lower Publicity = Lower People Buy = Lower Profit = All staff will just wait and cry with Lower Salary.

  • outlawauron

    This is some very bad reporting. The sales numbers above WERE their expectations. None of the above sold very close to that number. All had their prices drop very quickly.

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