Square Enix Holdings Co., home of the Final Fantasy game series, reportedly lost $2 billion after the release of Final Fantasy XVI gathered mixed reviews.
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Final Fantasy Fails to Meet Sales Expectation
The latest Final Fantasy installment was launched in June. However, the sales have been underwhelming than expected and has resulted to the company's profit decline. Bloomberg reported that the shares were down by double digits and analysts are now cutting their price target. Moreover, Square Enix's long-term investor, Sumitomo Mitsui Trust Asset Management Co., cut its holding in the company.
Industry consultants are now wary on the direction that Square Enix is pushing through. While some of the recent Square Enix games have received rave review, other have failed to find success on its audience. For instance, Forspoken, which was funded with multimillion dollars, was also called underwhelming.
Based on the recent years, the company has been lagging behind its competitors such as Capcom Co. and Activision Blizzard Inc. Bloomberg's data showed that Capcom is continuously widening the gap from Square Enix since 2022.
What's Next for Square Enix
Current and previous employees of the company cited that the main problem lies on the approach of having every game project a single producer's authority. For instance, producers are given full discretion on the direction of the project. Contractors are reportedly finding it hard to work with the company as the project goals can change any time.
Fortunately, it seems that Square Enix is on its way to improve its process. It might take some time though to fully implement and transition to this new process if ever. For now, the company has to rely on the loyal fans of its popular title such as the Final Fantasy franchise for revenue.
The Final Fantasy VII mobile game launched last week and is yet to meet the investors' expectations.
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