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Square Enix slashes revenue forecasts

Company announces Dragon Quest IX delay and moves from position of year-on-year growth to decline

Square Enix has slashed earnings targets for the financial year to end March 31 2009, citing the underperformance of its offline games business and the delay of Dragon Quest IX.

The company's net sales were anticipated to be JPY 160 billion (USD 1.7 billion), but are now expected to come in 16 per cent lower at JPY 133 billion (USD 1.4) - down year-on-year when compared with last year's results of JPY 147.5 billion (USD 1.6 billion).

Similarly revised from growth to decline, operating income is now predicted to fall short by nearly 50 per cent at JPY 12 billion (USD 133 million), compared to JPY 21.5 billion (USD 238 million) for the previous fiscal year.

Net income has been revised down by 62.5 per cent, from JPY 12 billion (USD 133 million) to JPY 4.5 billion (USD 49.9 million). Recurring income is also expected to take a plunge from previous estimates by 50 per cent to JPY 10 billion (USD 111 million).

"While results for games (online), mobile phone content, publishing and other segments have been proceeding at a rate exceeding the figures previously planned, amusement and games (offline) segments are projected to underperform - due to a severe business environment," explained the company in a statement.

Compounding the problem and contributing to the fall in estimated revenues, Square has also delayed the release of its anticipated RPG, Dragon Quest IX, by four months from March to July 11.

This follows earlier news that Square Enix is the company behind the recent offer to acquire UK publisher Eidos.

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James Lee