There’s no true outline for releasing a hit. A developer could produce an original, engaging product that captivates critics, but there’s still a high probability that the entire project could lose money. Square Enix experienced a string of high-profile releases that lost too much cash, and while the publisher doesn’t seem to have a solid answer for why so much money was lost, some ideas have been floated around.
Yosuke Matsuda, who is on tap to become the next president of Square Enix, discussed the company’s current situation in a recent financial results briefing. When tackling the missed projections for games like Sleeping Dogs, Hitman: Absolution, and Tomb Raider, the more competitive nature of the market was blamed.
“To put it simply, the packaged games business, and in particular the Western market packaged sales business’ operating and earnings efficiency, has been very challenging,” Matsuda said. “ In the fiscal year ended March 2013, we released the major titles including ‘Sleeping Dogs,’ ‘Hitman,’ and ‘Tomb Raider.’ These titles were lauded by the industry from a creative perspective, achieved very high levels of quality, and I believe that we achieved our primary goal of both reinvigorating existing IPs and creating new IPs.”
The reviews were strong, but the actual sales to consumers (and not shipments to retailers) slowed down much more quickly than anticipated. A greater sum of money was required to reinvigorate the advertising, but it just wasn’t enough in this highly competitive market.
“However, from the perspective of profitability, there was tremendous competition from many other strong titles, and with the diverse amount of entertainment options available, customers have become more selective, resulting in this disappointing outcome,” he continued.
The launch of next-gen consoles should stir up the pot, but Square Enix needs something big to turn this whole thing around. It has the quality behind its back. Now it just needs the hard numbers.
