2012 was a catastrophically bad year for Square Enix: despite the release of a few critically acclaimed games like Tomb Raider and Sleeping Dogs, the company posted an “extraordinary loss” of about $134 million dollars. Following the resignation of Square’s former CEO Yoichi Wada, the company announced that it plans to return to profitability by this time next year by focusing on casual games rather than big budget console titles.
“The business environment surrounding the [Square Enix] Group is in the midst of major changes, where smart devices such as smartphones and tablet PCs are spreading rapidly…while the console game markets in North America and Europe are increasingly competitive and oligopolistic.” Square Enix told investors today. “In light of such environmental changes, the Group is focusing all efforts on a substantial earnings improvement through driving reforms of business structure in order to establish new revenue base.”
Square cited titles like the recent Tomb Raider reboot, Hitman: Absolution, and Sleeping Dogs as major contributors to the company’s financial problems in 2012. While each of those titles managed to sell millions of units, they didn’t sell quite enough to turn a profit and recoup their expensive development costs, a problem that Square thinks will only get worse as console titles become more expensive to develop. While Square isn’t quitting the “core” games market completely, they do plan to shift most of their resources toward the development of casual games for smartphones and tablets, as games like Final Fantasy Airborne Brigade for iOS and Android have apparently been more profitable for the company than their triple A offerings.
Square is optimistic that they’ll be profitable within the year: besides their upcoming casual games, the company says that feedback from Final Fantasy XIV: A Realm Reborn beta testers has been positive and that they expect the revamped title to be a big hit when it launches this summer. Square Enix says they will announce more details about their refocused line-up of games at this year’s E3.
Source: Square Enix