Square Enix Expects Loss Of $140 Million

RIP FFXI?

Time to go back to the tried and true, funnel it all into XI I think. No HD required.

It's ok, they are putting out a Mana Series game this year. What happens after that is up to a bunch of sweaty investors, the way capitalism jesus always wanted it.

The only solution is to add jiggly physics in the next games

We want Tifa in her birth armor

if only they could have seen this coming

Correct me if I'm wrong here, but isn't "expected losses" from cancelling projects just removing the forecasted profits for those projects?

Honestly $140 million is nothing for a company like Square Enix. If movie studios can keep popping out Marvel movies that cost $300m and only make $100m for a decade, I think SE will be fine.

The thing is this isn't the start, Squares already been *** up for their decade already. Just another shovelfull on an already started mountain.

But it's better to lose 140m bailing out, than 500m making more trash. So, win?

It's how you have to report activities of significant financial impact. Earlier reports had them expecting profit on investments (projects), they have decided those investments would not return profit so canceled them. That requires revising projects and those projects now result in a minor loss (yes that's minor for a company that big). This is an event of significant financial impact and are required to report it this way.

I get these sorts of reports all the time for my investments, sometimes it's an adjustment upwards in projected profits, other times it's an adjustment downwards.


No they don't, "studios" make zero from merc sales, it's the the producers and the financial investors that might make that money. Lately it's been very bad for them, Disney (the IP holder for Marvel) is hemorrhaging money.

https://www.macrotrends.net/stocks/charts/DIS/disney/net-income-loss


Most of the loss is from poor performance of most of its' recent projects. Movie "budgets" are never entirely accurate because they do not include marketing costs, which are usually 50~100% the cost of production. A $300 million budget movie costs another $150 million to market. If that movie makes a trillion dollars then they are fine, if it makes "only" 500 million, they are in trouble, if it's less then 300 million they are in big trouble. They people who are fronting the money for the movie want at least a 10~20% return on that money as movies are very risky investments. Disney self funds many of it's productions but there is only so much red ink it can absorb.

Movies are a horrible example to use for profit since they extensively cook the books. Forrest Gump was one of the most successful movies of all time but was presented as losing money in order to not pay the author of Forrest Gump any money. Every part of the fimmaking process is designed to siphon as much money away as possible so that the companies created specifically for making a particular movie go bankrupt post movie.
That's why it's always important to double check the difference between net and gross profit when signing a contract. If you were ever wondering why we don't have a sequel you know now.

Crypto Fantasy: NFT will surely save them!

It's negative 11bn not positive.

It's poorly worded

Purposely written to confuse the people who read it.

12/22 3.3bn
12/23 2.9bn

This is what it's supposed to say;
https://www.macrotrends.net/stocks/charts/DIS/disney/net-income

No it's a loss, they are using ... creative accounting to move revenue around. Basically they sold stuff and reallocated revenue to make the entertainment branch look better then it was. Traditional media and streaming were rolled together and called Entertainment collectively lost 11 billion in 2023 even though they had a revenue of almost 40 billion. There is also the Sports segment (ESPN/etc..) which generated 17 billion in revenue.

The Theme Park (Parks and Experiences) segment has been doing well and seems to have recovered from the COVID shock and brought in 32.6 billion in revenue. Between Experiences and Sports there is enough net income to cover the losses from Entertainment because while Entertainment brings in lots of revenue, it also costs a ridiculous amount of money to operate. All the streaming services and movie productions are currently operating a big loss and Big Disney is cutting costs and doing whatever it can to reduce that loss.

So I apologize, when I said Disney I was referring to Disney Entertainment not Big Disney.

Stock price often react to events that will happen 6-9 months after. So it is likely that the stock price drop in 2023 Sept-Dec was responding to this.

You can probably wait for another day or two to see if the stock price drop harshly. If price only change slightly than this event is already expected in the market months ago.

Future Events:
1 -Stock drops off.
2 - Short sellers purchase, angling for bigger drops.
3- Short sellers begin selling.
4 - We all go effing out of our minds (Gamestop style), gobble up all the cheap stock and drive that sucker to the moon, cornering the whole enchilada!
5 - July 2024 Headline: "New Shareholders Demand 30 More Expansions for a 25 Year Old Game."
BONUS HEADLINES:
"Wall Street Investors lose their shirts as gamers buy up stock", "New Shareholders Demand.....Muffins?"

Part of those expected losses are from writing off sunk costs. Another part is lost productivity from resigning personnel and bringing them up to speed on their new projects. I am sure there are other parts but I am not an accountant.

Well SE stock is actually +5.42% as of now lol.

It is still possible that price will drop again in the future. But I feel the market feel SE cancelling projects and cutting the loss is the right move to improve future product quality. So the market responded positively.

Yes, we are all stupid.

Well in the past they outsourced a lot of AA games to external studios, not just Nier. Nier and Octopath are pretty much the only titles that were successful. Many other external studio games like Valkyrie Elysium, Diofield Chronicles, Harvestella, Forespoken all stuck on 65-75 metacritic.

On the other hand AAA games made by internal studio, such as FF7 rebirth, remake, DQ11 and FF16 all got 85-90+ score.

I think it is about time that they drop the idea of "outsource a bunch of AA games to external studios and give them small budget" strategy. They can keep Nier since it is a successful IP. But it is obvious that with enough budget, their internal team is better at making games than most of their external studios.

Forespoken is done by an external studio own by SE. That studio is pretty much gone and absorbed by SE after the failure.

If I am CEO I would probably make the same decision too. Move more IP into internal team, give those games made by internal teams more budget so they perform better. SE internal teams have absolutely zero problem making quality games from past few titles. It is external studio's game that often has quality problems.