Square Enix has struggled to cope with the challenging economy and shifting trends in the gaming industry. The company’s stocks have rapidly lost value, dropping by 30% last month.
This drop came right after the release of Final Fantasy 16. While the game sold 3 million units during the first week, it could not save the studio from its recent failures. The company’s stock has dropped below 5,000 yen today, marking another major hit to the company.
Why it matters: Japanese publishers like Capcom have seen a 10x increase in stock prices over the last decade. Therefore, it is odd that Square Enix has not found similar success.
Square Enix stock price fell below 5,000 yen and closed at its lowest price since May 22, 2020. pic.twitter.com/U12iAV4t0B
— Takashi Mochizuki (@6d6f636869) October 16, 2023
The latest drop marks an all-time low for the Japanese gaming giant in over three years. As reported by Takashi Mochizuki, Square Enix has not thrived in 2023.
Not too long ago, the publisher reported that operating income was down by 78%. It appears the studio has been unable to stray from this trajectory, leading to further decline.
The studio’s current downfall can be attributed to poor releases like Forspoken and a declining interest in its existing library. While games like Final Fantasy 16 sold as expected, they were unable to offset the losses.
This situation has led to a visible shift in strategy, with Square Enix considering shorter timed-exclusivity windows for its blockbuster games. Final Fantasy 7 Rebirth, unlike Final Fantasy 16, will be exclusive to the PS5 for only three months.
However, this may not be enough to combat the current losses, possibly leading to the publisher abandoning such exclusivity contracts in the near future.
While we think Square Enix games like Final Fantasy 16 and Octopath Traveler 2 were very enjoyable to play this year, key failures like Forspoken were a major blow for the company.
We believe upcoming releases like Final Fantasy 7 Rebirth and the Final Fantasy 16 PC port will be crucial for the Japanese gaming giant, and we hope it is able to deliver more consistent releases moving forward.
In the future, Square Enix will also work more closely with Xbox. This partnership will open up even more opportunities for the Japanese gaming giant. A combination of such factors could ensure the publisher returns to higher stock prices in the future.
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