Square Enix Reports Profit Drop as Key Franchises Continue to Sell Over Time

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Since we've become some fans of financial reports, we were giddy when we noticed Square Enix released [PDF link] its earnings for the six-month period between April and September 2010.

In that period, the Japanese development and publishing giant reported net income of ¥1.723 billion ($21.4 million) versus ¥2.68B ($33.1M)--a 35.7 percent drop over the same period a year ago.

According to the report, net sales were below forcasts; however operating income was higher than expected due to "highly profitable carryover sales" of major titles released in March 2010. What was the big winner in March for Square Enix? Final Fantasy XIII, which sold over five million units globally during the last reported period [PDF].

In the six-month period (ending September 30), Square Enix released five major titles to market with varying levels of success: Dragon Quest Monsters - Joker 2 for the Nintendo DS led, selling 1.28M units in Japan; Kane & Lynch 2: Dog Days sold 560 thousand (K) units worldwide; Final Fantasy XIV on PC sold 630K units worldwide since launching on September 21 in Japan; and Just Cause 2 sold 560K worldwide between April and September after launching at the end of March.

Kingdom Hearts: Birth By Sleep for the PSP managed to sell 510K units worldwide in the same period; however, it should be noted that the game first released in Japan in January with Europe and North America seeing the game hit store shelves in the beginning of September.

Square Enix notes that by the end of its fiscal year--concluding in March 2011--it must "strengthen" its "business framework" in North America and Europe as well as its emerging market business, citing China specifically. The company also calls for a need to expand its intellectual properties with "cross media deployment" as well as create new "AAA brands." To be fair, they pretty much say the same thing in every holdings report.

Square Enix continues its strategic partnerships with Western publishers, once again handling Japanese distribution of the Call of Duty brand for Activision. Black Ops is scheduled to arrive in Japan on November 18.

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From The Chatty
  • reply
    November 5, 2010 10:43 AM

    This company really needs some fresh ideas. In my opinion, they've been stagnating and scavenging off their former successes, for years. Is anyone really still a Square fan?

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      November 5, 2010 10:57 AM

      Depends on what you mean by Square fan... I'm a fan of Chrono Trigger, Dragon Quest and Gyromancer (I also highly respect some of the designers and composers that were/are(?) at Squeenix) but I'm not a fan of the company itself.

      But yeah, you're right.

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        November 5, 2010 11:14 AM

        What I really want is a true spiritual successor to the Secret of Mana (Seiken Densetsu) series. Seeing as Seiken Densetsu 3 was never released overseas, which is a damned shame, and all the subsequent Mana series games were god awful, it's high time Square did the series right and delivered the goods.

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          November 5, 2010 10:46 PM

          Oh yeah, forgot about Seiken Densetsu. I thoroughly enjoyed playing the third game, even if it was only through emulating a fan-patched version.

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      November 5, 2010 11:46 AM

      Absolutely.

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      November 5, 2010 11:51 AM

      Milking franchises isn't new, and Square has a ton of them and I honestly don't mind. The worlds they have created are infinite in possibilites and I would rather play something I know I'll probably like than taking a shot at something brand new. My short list would be Kingdom Hearts, Chrono Trigger, Final Fantasy (Regular and Tactics) Secret of Mana, list goes on.

      Their fresh ideas seem to be average middle-ware for them since I would bet money their putting their best foot forward on their cash-cow IPs. I mean, show me a Final Fantasy game (Besides FFXIV) that hasn't sold a 1+million?

      Also, I would honestly believe that the Kingdom Hearts game for PsP is doing well on that dying system.

      Also, where the hell is my Vagrant Story sequel. That game was great! FF Tactics on a console? Secret of Mana on a console. Hell, remake the 1st one. I'd play it.

      Front Mission? What the hell did they do to it. Those games were great.

      I know its unrealistic, but if they could take what they did story wise with FFVII, make it work like FF(X bringing back the old school feel and 4 in a party play, with a battle system like FFXIII --- it would be great. Will it happen, no. But I can dream.

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        November 5, 2010 11:53 AM

        EDIT: Not Final Fantasy (X ... Final Fantasy IX.

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        November 5, 2010 12:27 PM

        >>Milking franchises isn't new

        But Square have become experts in that field.

        >>Their fresh ideas seem to be average middle-ware for them since I would bet money their putting their best foot forward on their cash-cow IPs.

        This is pretty much my exact point. They get too sidetracked on milking their big titles that they don't innovate enough. Also, "best foot forward" here is a pretty relative term. If your "best foot" title perpetuates tropes from a 20 year old formula, you might want to get that stump checked out for gangrene.

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          November 5, 2010 1:36 PM

          I agree. Square Enix is getting old. There's really not a lot i'm looking forward too from them unless they have a huge announcement to make. Which I doubt they do. I think they'll ride FFXIII for a bit and hope they can turn XIV around in a decent amount of time. (Which I doubt too)

          I would love to see them western-ize some of their IP's. Would be interesting to see a different developer make a Final Fantasy Game.

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      November 5, 2010 4:22 PM

      I'm glad FF is still around, but I think they need to work on some new ideas with it while keeping the core game play for the hardcore fans. After 9 things went down hill fast.

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      November 8, 2010 10:08 AM

      It feels like the concepts and ideas they have been trying with recent games are simply not what the players want. At least not me. I think my fav was FF VI (III in the us) as the high-point. The latest releases felt too linear in both exploration and character development. What's the point of having specific points to spend if there's only one path to spend them on?

      Time for them to mix-up the story; yeah, I'm tired of the fancy-boy/come-of-age who saves the world. Don't get me wrong, the world will always need saving (time to hire a maid service? I mean, save the world and it needs saving again 10 min later! (Mr. Incredible joke).)

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