The stock price of Square Enix, a Japanese video game company known for franchises like Final Fantasy, Dragon Quest, and Tomb Raider, has dropped by 30% since June, causing a loss of nearly $2 billion in market value. A report has revealed that the company’s latest release, Final Fantasy 16, was not able to compensate for the poor performance of previous Square Enix titles that also failed to meet expectations.
The report that comes from Bloomberg details the plummet in stock price of Square Enix, and it is being claimed that the drop is due to the unexpectedly low volume of sales of Final Fantasy 16. The new title couldn’t make up for the earlier flops from the gaming studio. Bloomberg sources, which include current and previous Square Enix employees who wish to remain anonymous, said that the company’s approach to giving each project a single producer is also to be blamed for the mess.
They suggest that the producers were given “full reign” over the scope and direction of those projects, whose goals can change without any warnings. The said approach has resulted in products that are inconsistent in terms of quality and do not stand in line with the company’s reputation.
“I stated that we were designating FY2023/3 as a year in which to lay the foundations that will enable us to achieve our medium-term objectives, but that we nonetheless intended to pursue YOY growth in sales and profits,” Square Enix chief accounting officer Atsushi Matsuda said at an earnings call earlier this year. “In light of current conditions, however, I have to admit that this will not be easy.”
Bloomberg further reports that the newly-appointed CEO Takashi Kiryu is aiming to improve the situation by reducing the number of smaller-scale projects and focusing more on the big-budget games that have a higher scope for profitability for the company.
As for Final Fantasy 16, it sold over 3 million copies during its first week after launch, Square Enix had announced at the time. Moreover, the company is working on two paid DLC expansions for the title and also a PC port of the game, details for which will be shared later this year.
