The video game industry isn’t what it used to be in many aspects, and that’s rather sad to talk about, considering some of the successes that it’s had in recent years and console generations. Currently, the biggest issue hitting the industry is that numerous companies and publishers are dealing with layoffs due to their big AAA titles not making a profit. This has caused layoffs in the thousands, and there seems to be no sign of it slowing down. It’s affecting companies in numerous ways, as one can easily picture. One such example is Square Enix, which, throughout the most recent fiscal year, has suffered one of the biggest losses in company history.
In a special document called “Notification of Recognition of Extraordinary Losses,” which is easily one of the most dour document titles we’ve ever heard of, Square Enix admits that within the last fiscal year they lost about $140 million! That’s not something most companies could survive from. As such, the board of directors has apparently voted to be more “selective” in what they decide to push forward gaming-wise in the future and how it’s all handled:
More specifically, they seek to “to revise the Group’s approach to the development of high-definition (HD) games with the intention of being more selective and focused in the allocation of development resources.”
There were even reports from other sites that due to these “extraordinary losses,” they’ve canceled unannounced games to try and “stop the bleeding.”
So, how does Square Enix recover from this? The “easiest way” is to be careful about what kinds of AAA titles they make and how big and “graphically superior” they try to make them. Within the last year alone, the publisher released Final Fantasy XVI and Final Fantasy VII Rebirth. Both were massive-scale RPGs that took many years to make.
However, despite being award-nominated and critically praised, neither title met the expectations that the publisher put on them. In the case of Rebirth, it apparently was only selling HALF of what the first remake title did! That’s not good by any metric, especially since you know they put lots of time and effort into making those games shine on the PS5.
That’s another issue here. Both of these games were timed-exclusives for the PlayStation 5, meaning that only those who have the console could get it, and PC players would have to wait at the very least nine months. The console currently has around 55 million units, which shows that many who have one aren’t interested in this long-running RPG franchise.
So unless things change, Square Enix will be taking heavy losses for a while.
