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Square Enix have recorded a "content disposal" loss of ¥22.1B ($140.9m) as a result of "various changes in the environment surrounding the group."

orzkare

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View: https://twitter.com/MauroNL3/status/1785192844258336778

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スクエニHD、24年3月期決算で221億円のコンテンツ廃棄損を計上…HDゲームのパイプラインの見直し、業績見通しは精査中 | gamebiz

スクウェア・エニックス・ホールディングス<9684>は、この日(4月30日)、2024年3月期の連結決算において、コンテンツ制作勘定の廃棄損として、約221億円の特別損失を計上する見込みになったと発表した。同社は、3月27日、グループを取り巻く多様な環境変化に照らして開発リソースの選択と集中を行うため、HDゲームタイトルの開発方針の見直しを決定した。これを受け、グループで開発中であったパイプライ…
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GhostTrick

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Are Square-Enix going to come to the same logical conclusion other publishers came to or will they stick their head in the sand once more ?
 
Strings

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GhostTrick said:
Are Square-Enix going to come to the same logical conclusion other publishers came to or will they stick their head in the sand once more ?
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If you mean basically killing all their A to AA games like Capcom, then yes unfortunately.
Mikch85 said:
That means they cancelled a lot of smaller games.
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This has to include at least one big one because it's a fuckton. When they dumped the FFXV DLC, and whatever multimedia thing Luminous was planning, that was ¥3.7b
 
Celestial Descend

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Many of their small games clearly bombed, but they were unlikely to hurt SE's bottom line. Those games scream of shoestring budget. Forspoken being a mega AAA bomb, FF16 failing to expand user base, FF7 Rebirth being another bomb are the real problems.

Strings said:
If you mean basically killing all their A to AA games like Capcom, then yes unfortunately.

This has to include at least one big one because it's a fuckton. When they dumped the FFXV DLC, and whatever multimedia thing Luminous was planning, that was ¥3.7b
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The director in charge of HD2D titles recently got a promotion. It's very unlikely SE will kill all of their AA games, just the ones that are performing poorly (which there are quite a lot).
 
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Linus815

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APZonerunner

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rainier said:
What does "content disposal" loss mean?
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It means they have cancelled projects, but in their financials you have to consider the cost spent on the project so far. So if they'd spent $20m so far on development of a specific title and its related assets/technology/content and then cancel that game, they have to write that down - 'dispose' of that content/money - in their costs.

This is all in line with what the new CEO promised in March, which was that they were going to have a serious re-alignment. That's happened in the last month or so, and it has involved them cancelling a number of game,s as well as doing big internal shuffles to consolidate staff and resources onto fewer projects - but ones they feel have a greater chance of having real wide mainstream success.
 
Zeal543

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Hmmmmmm maybe sell the xenogears IP to nintendo to recoup some loss?
 
plow

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I don't think it's a bad idea to focus your dev power to strictly "AAA-games".

Square has some bangers in the pipeline with KH4, DQXIII and FFR3. I can see those games releasing one each year with KH4 -> 2025, DQXIII -> 2026 and FFR3 -> 2027.

There should still be enough time/budget for "smaller" games and Remasters like OT, DQ spinoffs or vision of mana. Just less of Valkyrie Elysium or Star Ocean, which well, not an issue for me personally.
 
Delaney

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Strings said:
If you mean basically killing all their A to AA games like Capcom, then yes unfortunately.

This has to include at least one big one because it's a fuckton. When they dumped the FFXV DLC, and whatever multimedia thing Luminous was planning, that was ¥3.7b
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Take into account that the FFXV DLC, even if including different pieces of content, was done by a smaller crew. These numbers could indicate that on top of the usual loss of re-structuring teams, we might be looking at a single bigger game being scrapped. If the game had already entered asset production in terms of CGi movies, VO recording and the like, numbers could match what we see here.

Recent statements from S-E would indicate that it was multiple smaller games that suffered this fate, though. I hope Paranormasight 2 survived.
 
pbayne

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Square Enix have put out a LOT of games over the last few years, ive always wondered what the profit margins are on a lot of them because they were overflooding their own market to an extent.
 
Mikch85

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Their profit forecast was 50 billion yen. Wonder if it will be impacted (they say they're looking into it.)
 
rainier

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APZonerunner said:
It means they have cancelled projects, but in their financials you have to consider the cost spent on the project so far. So if they'd spent $20m so far on development of a specific title and its related assets/technology/content and then cancel that game, they have to write that down - 'dispose' of that content/money - in their costs.

This is all in line with what the new CEO promised in March, which was that they were going to have a serious re-alignment. That's happened in the last month or so, and it has involved them cancelling a number of game,s as well as doing big internal shuffles to consolidate staff and resources onto fewer projects - but ones they feel have a greater chance of having real wide mainstream success.
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Thanks!

NovaChrysalia said:
Ouch...

The fact that they still haven't reported on sales of FF7 Rebirth speaks volumes.
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I could be wrong, but this seems more like a reaction to stuff like foamstars and forespoken.
 
Rumenapp

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Guess that money from sony didn't cover all the lost revenue from other consoles.
 
Mikch85

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But man, Kiryu-chan is a man of action. When he said he wanted to change things, he meant business lol.
 
Toth

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This definitely needed to happen. While I enjoyed some of their smaller budget titles, they were clearly not making back their investment on them and there's only so much FF and DQ can carry them, and their mobile division has been doing very poorly. Forspoken bombing must have been a real disaster for them :(

I do wonder what projects were cancelled though: were any likely to be at least some hits (a new FF game? a remake of an old but popular PSX game?) or potential remasters? I am still surprised we have not seen a FF13 trilogy remaster or even a PS5/ XBOX upgrade of FFXV.
 
eonden

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rainier said:
What does "content disposal" loss mean?
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Probably something along the lines of content (games) that were in development and were cancelled. As they were cancelled without launching, the entire development cost of the game up to that point is pure loss and cannot be considered an investment (as there is no way to recoup the money on the project).
 
Rellodex

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I can't imagine a better outcome than Square becoming as focused as Capcom.

All the production and pomp around Final Fantasy XV, including them basically ending it by being like "damn, here, whatever", is still really weird to me.
 
LinkStrikesBack

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If they killed the games coming out of team asano, I guess I'll be done buying any square games, since I have very little interest in their action RPGs and I would bet this is them doubling down on them
 
rainier

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LinkStrikesBack said:
If they killed the games coming out of team asano, I guess I'll be done buying any square games, since I have very little interest in their action RPGs and I would bet this is them doubling down on them
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If this meant putting team Asano on a major (turn based) Final Fantasy or Dragon Quest title, I wouldn't be mad.
 
jetsetrez

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I have to imagine FF9 and FFT remakes/remasters are still on, right? Man, I'd really love to know what the other projects were. I'd be so bummed if they were secretly working on ports of anything I've been wishing for for years, ie Vagrant Story, Einhander, Tobal, Xenogears, Brave Fencer.
 
LAA

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Sad to see, at least if this means an end to their smaller games, would we still get the likes of Theatrhythm, Neo:TWEWY and etc. under this? Thought their 2D-HD games were great too, hopefully they continue with them.

I bet this wouldn't apply to mobile games either, despite a few of them I would see as not being worth it. FF7 EC was a disaster, as was First Soldier and most of their mobile efforts just seeming to get cancelled and killed over time.
I just hope we still get a fully realized FF7R Part 3, I am worried the sales of Rebirth may affect it, but it was dumb to have high hopes for it currently, being on 1 console and Japan's market seeming to focus on portable consoles now. Hopefully if/when it comes to PC (And maybe Xbox/Switch 2?) it'll get the numbers it deserves.
Otherwise, hope KH is still fine, I would assume so, it must still be one of their biggest IPs. Maybe KHML and spin offs could suffer? Hopefully still considering/planning Steam ports too, surely would make them money for relatively little effort.
 
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Brodo Baggins

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Chaserjoey said:
RIP Final Fantasy IX Remake, we did not know ye
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I'm actually very worried this will be the case.

Also a little worried they'll skimp out on Remake part 3 with a Lightning Returns level budget project, which would be a huge bummer given the quality trajectory the series is on.

I really wonder if SE would have more success retargeting their development for AAA "HD style" games that target Nintendo Switch 2 specs rather than going all in on top of the line AAA. Seems like it might help them reign in budgets while meeting their audience where they are.
 
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Toth

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jetsetrez said:
I have to imagine FF9 and FFT remakes/remasters are still on, right? Man, I'd really love to know what the other projects were. I'd be so bummed if they were secretly working on ports of anything I've been wishing for for years, ie Vagrant Story, Einhander, Tobal, Xenogears, Brave Fencer.
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Your best bet is to grill APZoneseeker for information! haha
 
--R

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The 'Capcomification' of companies is gonna have dire consequences to many of their IPs. Bandai Namco is doing the same thing too. Doesn't bode well.
 
APZonerunner

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rainier said:
I could be wrong, but this seems more like a reaction to stuff like foamstars and forespoken.
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It's a reaction to years of problems in the development chain where money wasn't going in the right places, development wasn't smooth, etc etc. Under-performance of certain games is also gonna be a factor (easier to carry on with smaller money-wasting bets or whatever when you're making loads elsewhere), but you can't really pin something like this on any given single thing.

SE has been making money, but what has been identified is so much of that performance was backed up by the MMO stuff. HD games segment was up and down all over the place. Fans can argue the semantics about exactly how successful Remake/Rebirth/16 were, and we'll get more info on the latter two sales-wise this coming week with Circana/NPD dropping, but in the broader picture even if they were all successful, the last slam dunk successes they had in the HD Games section were Nier & 15. So it's been a while. On mobile, they've struggled to keep a service game open for more than 18 months with one or two exceptions, etc. So Kiryu is trying to address all that. You don't want the profitability of your business, especially one as large as SE, to be too reliant on any one thing/game. Ultimately this is all about addressing that.
 
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