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Square Enix warns of "extraordinary" ¥12bn loss

Final Fantasy publisher lowers expectations from ¥1bn profit due to cancelled projects and natural disaster

Final Fantasy publisher Square Enix has issued a warning that tomorrow it will reveal losses in the region of ¥12 billion ($148m / £90.6m) for the full financial year.

That's a massive revision on the ¥1 billion profit it expected only last February.

The company blamed the cancellation of digital projects in development for approximately ¥4.5 billion of the loss, as it "tightened selection standards."

"Under a rapidly changing operating environment and more prudent estimates of future cash flows, the Company plans to write down goodwill (approximately ¥8.8 billion)," read the statement. "Further, as a result of introducing a tightened selection standard regarding title lineup to strengthen the revenue base of the Company's digital entertainment segment, project development cancellation and related losses (approximately ¥4.5 billion) are expected."

A further 0.6 billion was blamed on the recent earthquake and tsunami in Japan and the resulting closures and restoration of amusement facilities.

Sales are expected to only drop a small amount, from ¥130 billion to ¥125 billion. But the ¥12 billion loss is a huge drop for the 2011 fiscal year, compared to ¥9.5 billion profit recorded in 2010.

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Matt Martin

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Matt Martin joined GamesIndustry in 2006 and was made editor of the site in 2008. With over ten years experience in journalism, he has written for multiple trade, consumer, contract and business-to-business publications in the games, retail and technology sectors.

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