This morning, it was announced that Square Enix expected an “extraordinary loss” in its FY2013 financials. Instead of sales of ¥150 billion, it’ll now be ¥145 billion. For income, it’ll drop from a small loss of ¥3.5 billion to a hefty loss of ¥13 billion.
Square added the loss will be “major reforms and restructuring in its development policy, organizational structure, some business models, and others.”
As a result, CEO Yoichi Wada will resign from his post once his current tenure ends this summer. This isn’t no small measure neither. Wada has been around since the beginning of Square Enix’s inception in 2003 following the merger of Squaresoft and Enix Corporation, and also oversaw the deal that seen Eidos join the publisher in 2009 and become Square Enix Europe.
And it is particularly because of that buyout that we’ve seen two sides of Square Enix. In fact, you could even say we’ve seen two different Square Enix’s this gen.
Square Enix Europe
This, if anything, saved Square Enix’s arse as of these past few years. Some fantastic games have come out since the Eidos merger. Just Cause 2; Deus Ex: Human Revolution; Hitman Absolution (I think it was great anyways) and Sleeping Dogs, a game which basically had no right to live after it was canned as True Crime: Hong Kong by Activision. Yet it was a decent game that turned out well enough for Square to live on.
So too was Absolution. So also was Tomb Raider, one of the most anticipated games of this generation and one of the boldest considering the legacy of that particular IP and the scope around its reboot. It is one of the best games this year without a question of doubt and Crystal Dynamics should absolutely be applauded for having the balls to go with it.
Yet, when the three games mentioned above don’t hit sales targets – 1.75 million for Sleeping Dogs and around 3.4 million for Tomb Raider and 3.6 million for Hitman Absolution – something has gone awry here. A majority (two thirds at least) of these sales were from Europe as Square noted this morning that “North American sales force was ineffective.”
Lets be blunt here for a second: we’re approaching the end of the financial year on Sunday. And by that point, Tomb Raider will have reached a month on sale. While Sleeping Dogs and Hitman’s sales estimations come after months of being on shelves, Tomb Raider will only have been out for four, five weeks.
3.4 million in such a short space of time is such an achievement for a game that’s rebooted one of the most beloved franchises in gaming from top to bottom, so why Square Enix would consider its performance as disappointing is somewhat baffling. Maybe the original estimations were beyond the clouds here.
“When selling 3.4 million copies of one of gaming’s best in YEARS = ‘missing the target’ then something be broken in this biz,” said God of War creator David Jaffe in response on Twitter. “Dear game publishers: adjust your budgets and STOP chasing COD numbers. Not every album is Thriller, not every movie is Titanic. It’s ok.”
I woke up to see the news of Wada’s resignation and immediately thought that surely this was a case of laying one too many Eidos-shaped eggs into the basket and even maybe see the Eidos relationship was starting to get a bit shaky. But as pointed out to me afterwards, Square Enix Europe CEO Phil Rogers is now being considered for a role on the Board of Directors. So perhaps not.
Square Enix Europe hasn’t been entirely faultless since the merger – hello there, Kane & Lynch – but it’s released some fantastic stuff and still got some massive stuff on the horizon: Eidos Montreal’s Thief (plus a new IP), Murdered: Soul Suspect (we still don’t know the developer for this, oddly) and more from other studios, including IO Interactive and the new Square Enix Montreal (not to be confused with Eidos Montreal). Without them, I’d likely think Square Enix would be in a more painful place then it’s in now. Or, God forbid, worse.
Square Enix Japan
The same could not be said of Square Enix Japan, however. In fact, it in itself, has more or less become two entities as of recent years. Square Enix Japan’s HD console output in the past few years has been up and down like a see-saw. Lets start with the lesser known ones: Mindjack, Front Mission Evolved (that was actually a collaboration between SEJ and western developer Double Helix) and The Last Remnant both got kickings critically, whilst Infinite Undiscovery and Star Ocean: The Last Hope did reasonably well, if mixed, by the critics. And Nier has become a cult hit. Nothing else to say on that.
Then we come to the main pillar of Square Enix’s HD output this generation: the Fabula Nova Crystallis saga. Or to everyone else, Final Fantasy XIII and its counterparts Agito XIII and Versus XIII. Final Fantasy XIII did reasonably well in sales when it launched in Japan, selling between 1 million and 1.1 million units in its first day. When it launched in the west a few months later, Square shipped 3 million units within its first day in the US and Europe.
Yet, a majority of fans of the series were left cold by the game. Sequel XIII-2, which some could argue was needless, fixed some things from XIII, but there was still some who couldn’t quite gel with it. First-week sales in Japan even took a major dip compared to XIII. Despite that, a second sequel, Lightning Returns: Final Fantasy XIII, will release this autumn and will round off the Lightning trilogy.
But while the XIII trilogy has not been digested well, lets just say, it’s the other two games in the Nova Crystallis saga that has had fans itching at the claws to play (unless you understand Japanese, in which case, you already can play one of them). But even Agito XIII has distanced itself from the XIII monkier and rebranded itself as Type-0. Released on PSP in 2011 in Japan, reception seemed to be decent and sold nearly 500,000 units in its first week in Japan. An English localisation was said to be in development, but is now said to be near death according to 1UP.
And then there’s Versus XIII. We’ve seen and heard not a lot of Tetsuya Nomura’s PS3 exclusive, yet it’s still one of the most anticipated games Square Enix has on either its western or eastern sides. And if recent rumour is correct, it also will move away from the XIII name and will actually become Final Fantasy XV and will be a PS4 exclusive. Square confirmed at the PlayStation Meeting last month it will unveil a new Final Fantasy at E3.
But hold the boat, the Fabula Nova Crystallis hasn’t taken a majority of the blunt in terms of Final Fantasy more recent years. That honour is bestow upon Final Fantasy XIV. The MMO launched in September 2010 to a shambles and it’s now taken Square the better part of two-and-a-half years or so to clean it up with A Realm Reborn. It looks set to have fixed a majority of the stuff that messed up the MMO. Not just that, director Naoki Yoshida has done a fantastic job so far in communicating with its fans on it. But this shouldn’t have happened in the first place. Full stop.
But we also come to that second entity of Square Enix Japan I was talking about above. This time, more on its handheld stuff. This has been the arm that has provided some excellent games with DS, 3DS, PSP and Vita. To name a few: Dissidia: Final Fantasy and its sequel Dissidia O12 on PSP; Type-0 on PSP (in Japan at least); Dragon Quest IX on DS; Lord of Arcana and Tactics Ogre: Let Us Cling Together on PSP and the Kingdom Hearts games on PSP and DS/3DS. And this is before you include the likes of The World Ends with You and Theatrhythm: Final Fantasy.
Nonetheless, questions will be asked of Yoichi Wada’s legacy as he departs Square Enix HQ for the last time come June.
But still, it’s one that will be very much tied to the history of Square Enix as its first decade together as a company comes to a close on Monday on the tenth anniversary of the merger between SquareSoft and Enix Corp.
For better or worse.