Square Enix to report record 22.1 billion yen loss
(twitter.com)
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That's basically the cost of a AAA game these days.
So how much of that loss came from Luminous and those non-Japanese studios it got rid of?
All of it. They're describing the loss as a write off due to content abandonment.
On top of that, Squeenix has always been particularly bad with budgeting. A game like Mankind Divided can make millions but it didn't make quite the number of millions they expected so it's a failure.
Which is still their own fault for setting it up with a disastrous marketing campaign that got them multiple independent controversies all on its own, as well as tacking on a multiplayer mode no one cared about and loading it with MTX to try and recoup losses.
Both of those cut into the profit margin before it even released and set them up for failure unless it became a groundbreaking hit. Which was impossible because it ends on a fucking cliffhanger.
They learned the lesson of Multiplayer in the original Deus Ex. Multiplayer was a metric fuckton of work. No one wanted it.
And here we are again. Remember that the original Ion Storm went bust due to project bloat.
This one wasn't competitive at least, it was just "everybody does these pre-made short levels, beat their time/score." So it couldn't have been that much work considering most of it wasn't even textured because it was "VR" in universe.
It was just completely tacked on so that way they could try to sell some kind of MTX after the "Augment Your Preorder" thing killed their plans for the single player ones.
That's an everyone problem right now. Budgets so freakishly bloated, there's no possible way they could ever profit without literally being the most popular thing of all time.
The mindset seems to be “when we release, it will magically be ‘our turn’ to dominate twitch, YouTube, Twitter, etc., and this will translate directly into big sales numbers”. As if bringing any sufficiently expensive AAA game to market is a guarantee of some level of viral success along the lines of games like BG3 and HD2.
It almost smacks of the labor theory of value; they say “we did everything right, so why didn’t we get paid?” You didn’t get paid because you forgot to make sure that people actually wanted the thing that you spent $100 million and five years making. All that time and money spent doesn’t have inherent positive value.
Guys, I've got a great idea! Y'see, all the runaway hits have been small and/or passionate projects that did something new or explored it in an interesting way. So, what we're gonna do is... Focus test and run everything by committee to create the safest, most generic and least offensive content that was popular 3 years ago.
Furthermore, if we alienate our entire audience, I believe we could quintuple our profits by pandering to the pedo-communists with no money or interest in our product.
You are absolutely right about the labor theory of value point. They think that because they worked hard they deserve money.
I could run a cemetery and dig the graves with a spoon. That would be hard work but I wouldn’t deserve a million dollar salary for it because I didn’t produce much value for the world.
The story of Marvel's Midnight Suns. It's an okay game, had several million in sales... But cost ten times what it earned. In pure revenues, any game with those numbers would be a success, but it needed to sell more than there are gamers in the world, in order to turn a profit.
How many times now have they almost bankrupted themselves?
The AAA space has hit the law of diminishing returns. Back in the 00’s if you spent an additional 10 million on a game there was a noticeable improvement. Now an additional 10 million barley makes an impact. If devs were smart they would cap their budgets and settle for not having the most beautiful game possible. Instead they decided to try to spend ungodly amounts of money in the fruitless attempt to overcome the law of diminishing returns.
The independent scene doesn’t have additional millions to waste so they have to actually be efficient with their budget.
You can still drop 10 mil on a game and make a SIGNIFICANT improvement.
The problem isn't the present value or money, or the concept of diminishing returns, it's WHAT they're spending the money on.
Four million to GaymerX consultations with a million sidebarred for Sweet Baby Inc., and five million more to have Treehouse localize the game into English, you've dropped 10 mil, but each of those decisions will REDUCE your overall sales, not increase them, not even keep them static. Put down 2 mil on an HR push for inclusion in the workplace, and you're down 4 mil in net profit. Put that same 2 mil into actual game devs, or artists, or the HR screening the artists for those who actually match the "vision" of making a game that sells rather than one that is approved by committee, or into the voice acting, or the music...
Hell, put that 10 mil into a perpetuity annuity that pays out 1 million dollars in tournament prize money per year (through university education grants, so it's also a charitable donation), and it would be a FAR better way to spend the money than what AAA companies are doing presently. At least that would be cash-neutral marketing with a double-dip in tax deductions, rather than pissing away sales by trying to appease the rainbow mafia.
Let me guess, all the losses are linked to work that was consulted on by Sweet Baby Inc like firms?
Possibly. They are blaming it on unreleased content. No telling what titles they canceled with Sweet Baby stink on it. Could also be they canceled titles at their request as well.
Wasn't that game with the ugly annoying black chick something they worked on with Sweet Baby Inc?
If so given how bad that flopped I can easily see them just cancelling it all than waste money publishing it.
Black Girl Gamers.
It's ironic, all of these "consultant groups" are older than SBI, and now they just get called "SBI-like."
To be fair for Square, turning a tech demo for a new engine that has been absolutely trash is an uphill battle. They probably saw it as a wash and took the DEI money to get something back.
Forspoken? Yeah that was squeenix x black girl gamers.
The dialogue was so bad it went viral and spawned countless memes, and that can be attributed directly to BGG. Also the main character wasn't originally black.
I'm not too sure on this. Pretty sure the original Luminous Engine tech demo that essentially showed that world still had a black girl focus.
Nope, she was absolutely not black: https://s3.amazonaws.com/prod-media.gameinformer.com/styles/body_default/s3/legacy-images/imagefeed/Square%20Enix%20Shows%20Off%20Its%20Next%20Generation%20Engine%20With%20Two%20Videos/agnisnewvideo_610.jpg
Wait, was Agni's Philosophy supposed to be Luminous Engine demo and a prototype for Athia? I do recall that showcase a really goddamn long time ago. Trailers say 11 years.
Looks up Project Athia trailer. It's only three years old.
You know what, I think I'll take your word for it. Didn't realize the Athia demonstration was so young in comparison.
Square enix already had an ethics department too.. so they have all these i puts from commies to fuck up games.
I bet a bunch has to do with their NFT shit. They had said they really wanted to incorporate NFTs into their games and that's pretty much vaporized.
They also have their own "ethics" department. I guarantee you SE's profit margins will greatly improve if they just gut the entire department. You don't need to pay for useless employees; no time will be wasted on internal "consultations"; and games will subsequently be out at a faster cadence and at better quality.
Bonus outcome: SE perfects AI translation and we don't have to deal with wokalization.
Forespoken and the rest is more or less just rehashing on past glories. (DQ, FF, SaGa, Star Ocean, and Live a Live) Seriously just doing what people expect them to do, churning out the same shit but with a bloated budget.
Don't know about woke consulting for their japanese IP, don't know, don't care.
Square has been absolute dogshit since Enix bought them.
Square was mostly shit even before then. The first Final Fantasy was literally going to be their final game because of how horribly run they were/are and they were going out of business.
No one wants hear this but it's true.
Chrono Trigger was their best game and everything after FF7 has been a steady slide downhill.
Kingdom Hearts was a decent spin on the Chrono Cross mechanics, especially the overworld. The Gummi ship sequences were my faves... I think it was the last gasp, though. X was decent, X-2 was meh, XII was better at near VII levels, but XIII absolutely sucked balls.
Gummi ships in the first game basically ended up as an engine with as many forward facing tier 1 blasters as you were able to strap to it then firing non stop. Kind of like the bastard love child of an A-Wing and a Y-Wing.
T2 and T3 blasters in ended up being less effective because T2 was something dumb like split fire that didn't even fire ahead of you, while T3 was harder hitting but also much slower blasting.
Meanwhile spamming T1 meant rapid fire and simply carpet bombing space so much nothing could even fire back at you.
Kingdom Hearts was a pile of shit and FFX was also awful, don't make apologies for it.
shrug I had fun with them. Never really saw the issues.
I'd argue that aside from the graphical upgrade, FF7 was already a slide from FF6.
Very little armor/weapon customization since it's all tied directly to specific characters, very linear, relatively small cast of characters.
They had near-perfection with the FF Pixel Remasters.
They could have stuck to remaking history the RIGHT way.
And they chose that sweet, sweet ESG money instead, because fuck art.
Am interested to see what games they cancelled. After the newest FF supposedly rolling in money for them and 14 (the MMO) having more pre-sales for their next expansion than ever I'm curious.
Rebirth? Last I checked, it has only sold a quarter of what Remake did. And with as terrible as Squenix is at managing their budgets, I wouldn't be surprised if they are way under water with it.
Apologies I should have specified, I meant FF16, I will admit I have had 0 interest in the release schedule of a remake of a 20 year old game lol.
I've heard lots of criticism of 16. I still hope to play it on PC though (fuck Sony).
That's like 50 bucks these days.
They could rent tifa out. She can be rented to clothing or fashion companies to model clothes. Rent her out to other games to collab with. Can be gacha games like to nikke or dead or alive to roll for tifa and outfits (interestingly.. final fantasy 7 has a mobile game that has skimpy-ish outfits). Id say collab with other games but the wokeness would fuck her up (ie.. apex legends).
They can make a shit ton of merchandise too like tifa hugging pillows, dozens of different figurines, toys, alarm clocks, bathroom rug, etc etc. Merchandise is where money comes from for certain movie IP. Its how disney stays healthy despite it losing money from woke shit.
They literally have good IPs and plenty of options to make money. But they just f@gs
Besides Forspoken being a giant black ho(le), FF16 turned out to be a bland and forgettable game, seemingly made to try to appeal to Witcher and Game of Thrones fans well after the hype for those IPs has died down, and BG3 comes along and eats everyone's lunch.
As much as I enjoyed FF7 remake, I still haven't bought Rebirth. Why? Way too many games to play, and the game is very obviously the same gameplay as the first, so I'm in no huge rush. Episodic gaming has been tried and always fails, because the sequel episodes pretty much by definition will only sell to a subset of the prior game's fans.
They were my undisputed favorite company back in the day. Now they deserve what they get.
Yen rate as of today is around 1$:157Y (actually pretty bad as of late), so I would estimate the loss at around $140M. Honestly that's quite a lot of money in the Japanese economy but you'd have to compare it against the company's worth. US economy not sure.
So.. SEGA lost 100 million on ONE game that got canceled.. that hyena game. Square Enix losing +100 million this year on an unknown amount of canceled WIP games. What is up with japanese companies hemorrhaging money like this? lol
Only japanese company doing well is Capcom and Nintendo. Capcom just have a huge ass selection of titles they can remake with wokeness. While nintendo also have their own IP, but kept their IP relatively non-woke and non-MTX and cheap.Seems SEGA only has like sonic, persona and yakuza series while square enix.. well i dont know wtf they have aside from Final Fantasy lol.
It's what they deserve for cancelling Stranger of Paradise 2
Wait, what? I never even knew one was in the works. And despite the lol-tier plot, it was actually a great game.
That's like 50 bucks right?
FF14 has been doing very well, though. Its head developer, Yoshi P, has been very adamant on maintaining his philosophy for the game. It doesn't have so many players, however, that it can carry the company.
Boo fucking hoo.
Anyway.