Square Enix banked on Tomb Raider, Hitman and Sleeping Dogs selling a third more

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 unrealistically, it had forecast sales figures about a third higher than the games actually managed.

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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.

In a financial briefing outline [PDF link] released yesterday (via Eurogamer), Square Enix avoids stating its exact estimates, but shares predictions narrow enough to show it was well out.

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.

From The Chatty

  • reply
    April 9, 2013 6:30 AM

    Alice O'Connor posted a new article, Square Enix banked on Tomb Raider, Hitman and Sleeping Dogs selling a third more.

    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 unrealistically, it had forecast sales figures about a third higher than the games actually managed.

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      April 9, 2013 6:38 AM

      I'm going to steal from peanut- here:
      There was some suggestion on the Bombcast of Square putting Eidos in the line of fire to shield the Japanese arm, which is where the real failures were. Those sales targets make it sound that way.

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        April 9, 2013 6:43 AM

        I agree because I've never played a JRPG ever.

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        April 9, 2013 7:13 AM

        Definitely. As much as I love their games, Square/Square Enix has always had some pretty bizarre management from the sound of it.

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        April 9, 2013 7:18 AM

        I can get behind this. What was the last Square Japan game that put up the numbers Tomb Raider did in 3-4 weeks?

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          April 9, 2013 7:24 AM

          Final Fantasy XIII-2 sold 3 million copies. IN 1 YEAR

          Other than that I can't really tell since they just keep making remakes. In fact, the North American wing has put out some of the best games in the last 5 years. With the exception of a few clunkers, these titles represent the upper echelon of well made games.

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        April 9, 2013 2:39 PM

        They'd better not fuck over the Eidos devs and such, or I'm gonna be super pissed.

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        April 9, 2013 4:32 PM

        Oh totally. At the very least Final Fantasy 14 ate a big hole in their pocketbook. The huge development time for FF13 probably didn't help either.

        Picking up Eidos was their way to try to ensure continued relevance on a global scale, and would provide an easy shield should they need to save some face to their Japanese investors.

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      April 9, 2013 6:53 AM

      That seems like fantasy-land hopefulness to me. They wanted to see five-million-some copies in less than 4 weeks?

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      April 9, 2013 6:55 AM

      Do video game companies learn nothing from Atari and E.T.?

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      April 9, 2013 7:16 AM

      So so restarted, to release a triple A title with a metacritic of over 80 is a damn fine achievement in this cynical world.

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      April 9, 2013 7:22 AM

      Its no surprise to me. "Gamers" rant, and complain and want new games for .99 cents and all the while they save their pennies for the next Madden (or inject your favorite sports title here) and COD.
      Good work lads.
      Next gen cant get here soon enough. Cliffy B is expecting this industry to fold. Lets see if this current state of nonsense will endure.
      Sorry S-E, you tried your best.

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      April 9, 2013 7:29 AM

      I was pretty close:
      http://www.shacknews.com/article/78394/square-enix-restructuring-as-huge-losses-forecast?id=29908396#item_29908396

      They expected to sell 2.6 more copies of TR, and I guessed 3 million.

      (2.6 + 3.4 it actually sold = 6)