Square Enix posts expected 13.7 billion fiscal year loss

Struggling publisher forecasts a return to profitability next year

Square Enix has confirmed the huge loss in the last fiscal year that led to end of Yoichi Wada's tenure as CEO and president of the company.

In the fiscal year ended March 31, 2013, Square Enix made a loss of 13.7 billion ($134.8m/87.7m) - a stark contrast to the 6 billion profit from the prior year - much of which was down to "extraordinary" costs associated with the company's ongoing restructuring plans.

The "under-performance" of Tomb Raider, Hitman: Absolution and Sleeping Dogs - all of which sold multiple millions of units - were also key contributors to the loss. The company's Digital Entertainment segment, which is responsible for all of its video game products, posted operating income of 44 million ($433k/281k), down 99.7 per cent on the previous fiscal year.

Revenue for the fiscal year was 148 billion ($1.45b/947m), up 15.1 per cent over the prior year's sales of 127.9 billion. Square Enix expects to return to profitability in the fiscal year ending March 31, 2013, with projected revenue of between 140 billion and 150 billion and projected net profit of between 3.5 billion and 6 billion.

"The business environment surrounding the Group is in the midst of major changes, where 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," the company's financial report read. "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."

Yoichi Wada stepped down as CEO and president of Square Enix in March after more than 12 years in the role. He will be succeeded by Yosuke Matsuda, who was promised to "fundamentally review" all of the company's assets and projects.

Square Enix laid off an undisclosed number of staff at its Los Angeles office at the start of April, and has warned of imminent job cuts at its UK offices.

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Latest comments (5)

Pier Castonguay Programmer 4 years ago
It's sad when the best games of the year are "under-performing".
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If the best games of the year, were isolated from the group, would it result in a positive profitability instead?
If so, what/who were the real under performers please.
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Christopher Thigpen Lead Producer, Kiz Studios4 years ago
When you can't control spending and your bottom-line becomes so high, the only way to go is down.

Great games with solid profits. These great games become nothing when the cost of operations are exceedingly high.
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Show all comments (5)
This is what Nintendo feared and warned everyone about years ago. Prices dropping, and development costs continuing to soar.

Something has to give.
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Private Industry 4 years ago
Lets not forget that FF 14 must have cost them a lot.
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