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Square Enix slashes profit forecast by 92%

Company cites "weak sales performance" and "harsh market feedback" for fiscal revisions

Final Fantasy publisher Square Enix has slashed its profit forecast for the current fiscal year by 91.7 per cent to ¥1 billion ($12 million) following poor sales of console titles, negative market feedback for a key product and a decision to push another key title back.

While the company didn't specify those titles it considered to have seen poor sales, it did note that it would be restructuring the development team for Final Fantasy XIV and would be continuing with a free period until it could be more confident of satisfying fans.

Meanwhile, Deus Ex: Human Revolution will now be released in the company's next fiscal year, meaning some time from April 2011 onwards, as will the PlayStation 3 version of FFXIV.

The publisher now expects to see ¥130 billion ($1.5 billion) in overall revenue, down from ¥160 billion ($1.9 billion), a fall of 19 per cent.

"With weak sales performance of console game titles that have been newly released during the current fiscal year as well as harsh market feedback regarding a key title, the Group recognises the reinforcement of development capability in our Digital Entertainment segment as our most critical managerial issue," read a statement.

"We therefore have decided to spend additional time to further polish our upcoming game, Deus Ex: Human Revolution, resulting in a shift in release timing from our prior plan of the current fiscal year to next fiscal year.

"Additionally, since recognizing that our Final Fantasy XIV service has not yet achieved the level of customer satisfaction that fans of our Final Fantasy franchise have come to expect, we have restructured the development organization and will continue the free trial period until we can present customers with a clear plan outlining Final Fantasy XIV's new direction.

"Furthermore, we have decided to delay the release of Final Fantasy XIV for the PlayStation 3 computer entertainment system, previously planned for early March 2011, in order to include all of the improvements we are planning rather than simply converting the current Windows PC version."

The Square Enix share price was down 1.35 per cent at close today, to ¥1599 ($19).

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Phil Elliott