Square Enix blamed lower-than-predicted sales of Hitman: Absolution, Sleeping Dogs and Tomb Raider for unexpected losses in the last financial year as it launched a costly restructuring, yet it seemed the games weren't selling particularly poorly. So how high were Squeenix's expectations? Arguably unrealistic, it had forecast sales figures about a third higher than the games actually managed.
The company had predicted that Tomb Raider would sell 5-6 million copies in its fiscal year ending March 31, though the game only launched on March 5 so it had 26 days to achieve that. According to Square Enix's own estimates at the end of March, it only sold around 3.4 million.
Hitman: Absolution was predicted to sell 4.5-5 million copies, yet Squeenix estimates it only shifted 3.8m. Sleeping Dogs was expected to sell 2-2.5m, but only managed an estimated 1.75m.
Squeenix points out that its financial forecasts don't count on the games selling as well as they predict, counting on 80-90% of those numbers, but they still fell short for the year.
This was the first year the company had tried banking on releasing "hallmark Western titles" without a "blockbuster title in Japan" to back them up, it says. Evidently Squeenix and its folks responsible for predicting sales were out of touch with the Western market.
The briefing says "considerable" effort was put into polishing the games and they received "extremely high" Metacritic scores, so it was "very disappointed to see that the high scores did not translate to actual sales performance."
That's a bit contentious, as Metacritic scores of 86% for Tomb Raider, 79% for Hitman, and 81% for Sleeping Dogs are actually only middling on the absurdly inflated scale of video game review scoring.
Mistakes were made, and hopefully lessons will be learned. Square Enix had predicted a net profit of $37 million for the year, but revised that to a whopping $138m loss, with $105m going towards the restructuring already underway. Square Enix's Los Angeles office had a round of layoffs last week, with more reportedly to come.