Square Enix has made a fairly bold announcement to its investors overnight, revealing that it’s chosen to take a ¥22.1 billion (almost $220 million AUD) hit in what it’s calling “content abandonment losses” that will be reflected in its books for the financial year ending March 2024.
The reason for this, is that the company has revised its approach to development of its console and PC games, or what it calls “high-definition games,” and how it allocates resources to these. Essentially, it’s looking like it’s cancelling or rescoping a bunch of already-greenlit PC and console projects and becoming more selective about where its funds go.
“At the meeting convened on March 27, 2024, the Board of Directors of Square Enix Holdings Co., Ltd. (the “Company”) voted, in light of the myriad changes underway in the environment surrounding its Group, to revise the Group’s approach to the development of high-definition (HD) games with the intention of being more selective and focused in the allocation of development resources,” the statement (which you can see here) reads. “As a result of a close examination of the Group’s development pipeline undertaken in keeping with this revised approach, the Company expects to recognize approximately ¥22.1 billion in content abandonment losses on its books for the fiscal year ended March 2024.”
While that might sound like the death signal for your favourite Square Enix franchise, it’s unclear how much this will actually affect Square’s heavy hitters like Final Fantasy, Dragon Quest, Kingdom Hearts and the likes, and probably won’t affect anything already announced. This is a publisher that’s released titles like Balan Wonderworld, Marvel’s Avengers, Foamstars, Babylon’s Fall, and Various Daylife, so it’s a safer bet to say we’ll see less risks taken on titles like this and a doubling-down of efforts on getting its big IP out there. And of course, more mobile games. Yay?