Square Enix seems to be facing tough times. What’s surprising is this is happening so soon after the launch of Final Fantasy XVI.
As reported by Video Games Chronicle, the company saw their share price dip at the lowest level it has been in since May 2022. That share price peaked in the days leading up to Final Fantasy XVI’s release. This dip from this week deleted $ 2 billion in shareholder value overnight.
In spite of the seeming connection, correlation does not relate to causation, and other factors can be at play here.
Square Enix’s other major release of this year was Forspoken, also a PlayStation 5 console exclusive. Forspokenwas a completely new IP, and seemed to be a property that the company had high hopes for. But poor reviews and technical issues at launch killed whatever potential the game had.
But even one poorly received release wouldn’t be enough to explain this. We can point to a recent string of poor releases in the past few years, from Marvel’s Avengers, Babylon’s Fall, and Balan Wonderworld, and bring up one theory: Square Enix is struggling, not only with Final Fantasy, but in managing their projects overall.
Now, let’s be clear here as well. Square Enix is still seeing a lot of success in Final Fantasy XIV. They have also had more successful releases within these years, such as Final Fantasy 7 Rebirth. Many upcoming projects, like Dragon Quest Monsters: The Dark Prince, seem to have the potential to also be really successful.
But it does seem like Square Enix is really only able to take care of their two biggest franchises; Final Fantasy and Dragon Quest. Babylon’s Fall and Balan Wonderworld were new projects with third parties, and it was Square Enix’s responsibility to manage those projects, not only for their own sake, but their respective studios.
Both Babylon’s Fall and Balan Wonderworld were serious risks for PlatinumGames and Arzest respectively, and both studios should count themselves lucky they were able to move on with projects like Cereza and the Lost Demon and Sonic Superstars.
Video Games Chronicle also cited a Bloomberg article analyzing the company’s issues. Many insiders allege that the company is having broader issues with game development structure. Individual producers allegedly have too much control over their projects, and teams lack structure.
Market analysts link this to doubts that the company can deliver in the future, and it all comes together to spell out bad prospects for the company. Square Enix remains one of the most successful and popular Japanese third party companies in the industry, but their current position of weakness could hint at even more serious issues in the future, if the company isn’t able to get things in order.
At least, for now, Square Enix fans have the PC version of Final Fantasy XVI to look forward to.