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Square Enix has lost almost $2bn in value since Final Fantasy 16 launch

Latest underperforming AAA game prompts investors to question publisher's strategy

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Square Enix has lost nearly $2 billion in its value since the launch of Final Fantasy 16, as its shares have declined and a key long-term investor has reduced its stake in the publisher.

The company's share price has fallen by 28% since its peak of ¥7,540 in June (specifically June 20 – two days before Final Fantasy 16 launched), and fell to ¥5,381 on Monday – its lowest since the year began.

Square Enix said alongside its latest financial results that Final Fantasy 16 did not meet its sales goals, and also reported a 66% drop in profit.

According to Bloomberg, these has resulted not only in the share price decline but also several analysts cutting their price target for the publisher and Sumitomo Mitsui Trust Asset Management – a long-term investor in Square Enix – reducing its holdings in the publisher.

Square Enix has suffered a number of AAA launches that did not meet expectations, including Marvel's The Avengers, Marvel's Guardians of the Galaxy, Babylon's Fall, and this year's new IP Forspoken. The latter's underperformance even prompted the publisher to close developer Luminous Productions and fold the staff into its own internal teams.

Kantan Games analyst Serkan Toto told Bloomberg: "Square Enix has problems with their games output… These titles get a 70% rating on Metacritic, are kind of okay and are just very forgettable."

According to the site, Macquarie Capital Securities Japan analyst Yijia Zhai wrote in a letter to clients: "We remain concerned with the company’s game development structure and game quality control, which could limit the longer term performance."

Current and former Square Enix employees told Bloomberg that the company's struggles are partly due to each project being treated as a single producer's domain, with a lack of team structure and proper documentation to organise development. However, one contractor said this approach is now being overhauled.

The publisher is also going through several significant changes, not the least of which a change of leadership. Back in March, Yosuke Matsuda announced he was stepping down as president, with Takashi Kiryu to replacing him.

Square Enix is also reorganising and growing its internal development teams following the sale of its Western studios – Crystal Dynamics, Eidos Montreal and Square Enix Montreal – to Embracer Group.

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James Batchelor avatar
James Batchelor: James is Editor-in-Chief at, and has been a B2B journalist since 2006. He is author of The Best Non-Violent Video Games
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