Square Enix Posts Another Extraordinary Loss, Possibly Cancels Titles; Dragon Quest X Steady
Square Enix just posted its financial results for the quarter ended on June the 30th, and things aren’t looking too bright, even if small signs of improvement are visible.
The prominent Japanese publisher ended the quarter achieving net sales of 24 billion yen (244 million dollars), generating an operating income of 689 million yen (7 million dollars). Unfortunately the ending result is still a net loss of 493 million yen (5 million dollars). As a brighter detail, net sales are up year on year by 3.3%.
The most negative factor is that the company disclosed an extraordinary loss of 1.6 billion yen (a bit more than 16 million dollars), with the following motivation:
In response to the latest environmental changes in the game industry, the Company has implemented a change in its development policy, and conducted a comprehensive review on work-in-progress game titles for the three-month period ended June 30, 2013.As a result, the Company has decided to book a loss on evaluation of content (approximately ¥1.6 billion) as an extraordinary loss.
It’s important to specify that “extraordinary loss” in financial terms doesn’t mean an extreme loss, but it translates to a one-time loss. While the wording quoted above is rather vague, the most probable (even if not confirmed) explanation is that one or more titles in development have been canceled, resulting in the loss of the resources invested in their production up to this moment. No details were shared on which titles might be affected.
In addition to this we learn that sales of console games were weak due to the lack of major titles released in the quarter, while browser and social games like Sengoku IXA and Kaku-San-Sei Million Arthur did well. The MMORPG Dragon Quest X (that is going to be released on PC in September) has been showing “steady performance”. This will hopefully persuade the publisher to announce the game for the western markets, as hinted by its producer.