Square Enix September Profits Forecast Slashed

[Karloff]

Square Enix September Profits Forecast Slashed

"Sales of a major HD game title" - Sleeping Dogs, in other words - are to blame for Square Enix's lost profits.

Square Enix has released its profit forecast for the six months ending September 2012, and the numbers don't look good. The revised forecast has net income slashed by over 60%, thanks in part to slow sales of its sandbox Hong Kong action game Sleeping Dogs.

Sleeping Dogs did well in the UK, but didn't light the US retail market on fire. It sold under 300,000 units in the US in its debut month, and wasn't on the Top 10 sales chart for very long. The report states that its sales "have been growing at a slower pace than expected," which sounds like a polite way of saying they haven't been growing at all.

However Sleeping Dogs isn't the only underperforming asset. Delays in its social gaming launch and poor arcade machine sales were also cited as reasons why the profits forecast had to be revised. A strong Yen, inhibiting exports, doesn't help matters. A foreign exchange loss of "about ¥1.1 billion [over $13 million] as non-operating expense" was down to overseas assets in foreign countries losing value in relation to the Yen.

Square isn't looking forward to the future either. Profit forecasts for the fiscal year ending March 2013 have also been revised downward, due to "uncertainties of the business environment."

A .pdf English language version of Square Enix's forecast report can be found here. [http://www.hd.square-enix.com/eng/news/pdf/121030.pdf]

Source: The Silent Chief [http://thesilentchief.com/2012/10/30/square-enix-revises-earnings-forecasts-downward-due-to-sluggish-sales/]


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[Irridium]

That's a shame. Sleeping Dogs is a good game, sad to see it isn't selling that well. Hope it picks up and makes some money.

 

[Terramax]

No major JRPG releases to lean back on either. I'm interested to know what arcade machines Squeenix usually sell. I haven't seen any Square arcade machines on my side of Japan (unless they count Pachinko as part of arcade machines).

 

[mirage202]

I wouldn't be surprised to find out people are wary of open world games (large dead spaces anyone?), combined with the poor showing of the latter True Crimes likely doesn't help.

The real shame of that is, Sleeping Dogs is IMO a very good game, not quite great, but very good. An open world with actual content outside the main story.

I suspect the Steam xmas sale will see SD shift a lot more copies on a reduced price.

 

[GoaThief]

I find this hard to believe, maybe it's true about purely the US being to blame because without doubt Sleeping Dogs is the most popular "new" game with my friends on Steam. More own that than any other recent release, including the likes of Dishonored.

Damn you, America! It's a good game, although the driving physics are fucking awful but it's more than made up for in other areas. It's also damn purdy. Get it already.

 

[AzrealMaximillion]

Sleeping Dogs would probably sell more if they didn't try to pump as much DLC cash from it as possible.

 

[kburns10]

Too crowded in the game scene right now. I know this game hit before ACIII and others, but I can't help but feel it filled a gaming void and has quickly been replaced by newer releases. The demo was FUN, but not fun enough to make me run out and buy it.

 

[Atmos Duality]

For all the shit I sling at Squeenix, I can't blame them for Sleeping Dogs.
Between that and Deus Ex: HR, they can pick out good properties.

I do applaud Squeenix for at least trying to support such games.
The strong Yen has delayed or flat out canceled several titles I wanted to see exported from Japan.

 

[GAunderrated]

Well I knew all the bad business decisions SE have been making over the past 7 years is starting to catch up with them. Before anyone says it yes sleeping dogs is a good game but its nothing new or refreshing IMO and that's why it didn't sell well (also very little marketing that i've seen).

SE really needs to rethink their current strategies because their main franchises are going south due to long production or just bad decisions with said franchises (KH3 taking ages, FFvXIII as well, FF agito not being released US, FFXIII getting 2 spinoffs and milking DLC for endings).

I hope they hit rock bottom and get a nice slice of humble pie because they are no longer the big players they were during the Ps1 and Ps2 era but they still have the same ego from that era.

 

[AzrealMaximillion]

Too crowded in the game scene right now. I know this game hit before ACIII and others, but I can't help but feel it filled a gaming void and has quickly been replaced by newer releases. The demo was FUN, but not fun enough to make me run out and buy it.

To be fair Sleeping Dogs did come out in August. August was pretty dead for big game releases. The only other game that it had to compete with in terms of buzz was Darksiders 2. It had a wide open void that it could have filled until November.

Only Borderlands 2 and RE6 have been the other big AAA contenders for sales.

Video game sales are just down overall, no one wants to pay $60 for games that come with oodles of DLC anymore.

Sleeping Dogs is good, but I think that all of the clothing pack DLC and such that came out at launch and steadily weeks after turned people off of it more than Square Enix and others think it does.

 

[Zero=Interrupt]

Need a quick profit injection? Release some HD remakes of Xenogears and FFVII. Your fans will lap it up, Squeenix.

 

[Royas]

I'm sorry to hear Sleeping Dogs did so poorly. It's really a great game and deserves excellent sales. It's fun, fast and has a decently gritty storyline. Maybe it needed more hype, it really didn't get as much marketing as it should have.

 

[IronMit]

This is a bad thing isn't it?
If Square Enix's diverse portfolio in good games isn't working they might end up streamlining the crap out of all their games and adding micro-transactions. EA and ubisoft come to mind

I had to wait so long for a gd stealth/shooter game after MGS4. Games like Deus ex:HR are rare..FPS/cover shooter &sandbox seem to get the green light over them.

Finally Hitman is coming out with massively improved AI. Something that other developers and publishers don't prioritise. They would rather spend that part of the investment on graphic textures, gun design.

 

[antipunt]

Really?...

This is depressing. Sleeping Dogs was such a great game...

captcha:

'skynet is watching'

I knew it..

 

[008Zulu_v1legacy]

Remakes of FF7 and 8 would surely do something for your profits. Just sayin.

 

[kburns10]

Too crowded in the game scene right now. I know this game hit before ACIII and others, but I can't help but feel it filled a gaming void and has quickly been replaced by newer releases. The demo was FUN, but not fun enough to make me run out and buy it.

To be fair Sleeping Dogs did come out in August. August was pretty dead for big game releases. The only other game that it had to compete with in terms of buzz was Darksiders 2. It had a wide open void that it could have filled until November.

Only Borderlands 2 and RE6 have been the other big AAA contenders for sales.

Video game sales are just down overall, no one wants to pay $60 for games that come with oodles of DLC anymore.

Sleeping Dogs is good, but I think that all of the clothing pack DLC and such that came out at launch and steadily weeks after turned people off of it more than Square Enix and others think it does.

I totally agree with that. When it released in August it was pretty dead. October has really picked up for gaming, but like you said, sales are down in general. $60 is a hard pill to swallow. Especially with more gamers becoming deal savvy and waiting for Black Friday and other specials rather than getting games Day 1.

 

[shrekfan246]

Damn you, America! It's a good game, although the driving physics are fucking awful but it's more than made up for in other areas. It's also damn purdy. Get it already.

I actually really liked the driving in the PC version. I don't know how different it is on consoles, but it controlled fairly well once you got used to it. Much better than any of the Grand Theft Auto games ever had for me, at least.

I really liked Sleeping Dogs, which is saying something because it's the only open-world sandbox game that I've ever actually played through entirely without getting bored. For all the stupid shit SE does that I disagree with, I just can't feel like they deserve to have this game fall through the wayside and drown.

 

[DustyDrB]

That sucks. Sleeping Dogs is one of my favorite games of the year. It's the first city-based sandbox to hold my attention and keep me entertained since the original Mafia. I'm surprised it hasn't done well, thought it received a lot of good press and word-of-mouth.

The good thing is that Sleeping Dogs is its own self-contained story, so I don't need a sequel.