Famed Japanese video games creator Square Enix is facing troubling times, with a loss of almost $2 billion in value since Final Fantasy XVI launched this June.
Between multiple mobile game shutterings, a year-on-year drop in operating income of 78.5% in the last quarter, and even the newest numbered Final Fantasy failing to galvanise gamers globally, investors have begun to think Square has lost its spark.
Long-term investor Sumitomo Mitsui Trust Asset Management Co. is among them, contributing to an overall 30% plummet in Square shares so far.
Too many games
A key cause of Square Enix’s woes is the sheer number of games being released, while - fans claim - compromising quality and lacking broader vision. Many of the company's mobile titles specifically have released with little buzz, public discussion or applause, launching only in Japan with no Western debut. These games ultimately shut down due to unimpressive revenues after roughly a year each, Bravely Default: Brilliant Lights and Echoes of Mana among them.
SinoAlice Global is also heading towards its end of service this November.
The company’s latest mobile game, Final Fantasy VII: Ever Crisis, is indeed living up to its name in fanning the crisis flames despite links to the widely acclaimed Final Fantasy VII. Ever Crisis launched last week to mixed reviews partly attributed to its gacha system proving unpopular. Even so, the game has managed to reach the five million download milestone.
Speaking to Bloomberg, current and former employees at Square Enix have told of the developer’s approach to new games. Each title is given to a different producer, and each one individually dictates the direction of said title with little structure between teams or even documentation to keep fully up-to-date with what others are doing.
"Square Enix has problems with their games output. These titles get a 70% rating on Metacritic, are kind of OK and are just very forgettable," said Tokyo-based industry consultant Serkan Toto.
Interestingly, the retreating of shareholders has pushed Square Enix’s value now behind Capcom's, the fellow Japanese giant whose Monster Hunter Now (with Niantic) hit app stores today. The game has amassed three million pre-installs in the buildup to launch.
Of course, there’s still plenty of time for Square Enix to turn things around, with any one game having the power to change course. Netmarble has just demonstrated this with its game Seven Knights Idle Adventure which, following a year-long decline, has finally brought share prices up.
Perhaps the same will happen to Square Enix, with turn-based RPG Dragon Quest Champions doing well, at least. The game earned this Top 50 Game Maker more than $10 million in revenue within two weeks of release.