Square Enix is one of the oldest studios in the industry, continuing to offer quality gaming experiences through its rich catalog of new and existing IPs.
The studio is best known for franchises like Final Fantasy and Kingdom Hearts, the former of which received a new entry this year. Final Fantasy 16 was received well and sold over 3 million units, but Square Enix appears to be struggling.
Square Enix’s stock has dropped to 5.342 yen from 7.540 yen, marking a 30% drop and a loss of around $2 billion in market value.
Why it matters: AAA development is more expensive than ever, with industry experts like Shawn Layden recently warning about the rising costs of making each new title.
Square Enix was expecting great sales from Final Fantasy 16, but the game’s exclusivity and departure from traditional Final Fantasy gameplay appear to have held it back in some aspects.
A recent report claimed that the developer had hoped for more sales. While Final Fantasy 16 sold reasonably well, it may not have lived up to the high expectations of Square Enix.
Additionally, releases like Forspoken have been among the worst titles of 2023, resulting in lackluster sales. Following such releases, Bloomberg reports the studio may be going through quality control issues.
Multiple sources have expressed concerns about the publisher’s practices, with Tokyo-based developer Michael Prefontaine stating:
“The company has overstretched itself on too many titles without proper oversight.”
Other sources have claimed that Square Enix is far too trusting with its producers, allowing them too much freedom with each project. This may be one of the reasons for the poor releases like Forspoken in recent years.
Analysts like Kenji Fukuyama believe these signs are worrying for Square Enix’s short and long-term future. The gaming giant may not be able to inspire confidence in investors because of its current conditions.
Nonetheless, Square Enix hopes to turn things around with Final Fantasy 16.
The gaming giant has begun work on two new DLC packs for the game, and Naoki Yoshida recently confirmed that work on the game’s PC version has already begun, potentially bringing millions of new players to the game.
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