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Square Enix warns of "extraordinary losses" ahead of upcoming financial report

A new, more selective approach will be taken to HD game development after $140.3 million in losses on axed projects
Square Enix warns of
  • Square Enix has released a statement forewarning of "extraordinary losses" in its upcoming fiscal report
  • Game "abandonment losses" came to $140.3 million in the fiscal year

With shuttered game after shuttered game and underwhelming new releases making up the bulk of Square Enix’s 2023, its fiscal year has wrapped up with little success worth mentioning.

And as shareholders eagerly (or hesitantly) await the specifics of the fallout on May 13th, Square Enix has released a statement that reads more like a warning, readying them for the inevitable blow.

Square Enix expects "extraordinary losses" for the fiscal year, "pertaining to abandonment losses associated with its content production account".

Simply extraordinary

These "extraordinary losses" are bluntly acknowledged throughout the statement as being due to cancelled games. And, sure enough, dipping into our past articles, it's hard to overlook the likes of Echoes of Mana, Just Cause Mobile, Dragon Quest Monsters: Super Light, SinoAlice and Nier Reincarnation all shutting down between March 2023 and March 2024.

It seemed inevitable, then, that the year would be an underwhelming one and Square just gave you the good news… You were dead right.

So where to now?

Square Enix’s board of directors have now voted to revise the company’s approach to developing HD games "with the intention of being more selective and focused in the allocation of development resources", which inexorably means axing certain projects under development.

These "abandonment losses" come to a total ¥22.1 billion ($140.3 million).

Square Enix had hoped for a change of fortunes last September with Final Fantasy VII: Ever Crisis, but its own crisis ironically persisted. The game has been met with middling reception even with fan favourite characters like Sephiroth making major appearances.

Whether increased selectivity regarding HD games and "abandonment losses" have any implications on mobile game development remains to be seen, but after so many closures in the past year this wouldn’t be surprising. Whatever the results, a warning ahead of time certainly doesn’t bode as to the company's prospects in the foreseeable future.