Square Enix absorbs $140 million hit as canceled games take significant financial toll; company revising approach to HD titles

Square Enix has announced it will "recognize extraordinary losses" during its fiscal year report ending March 2024, as it pertains to several canceled games.

For the fiscal year 2024, the firm will report a $140 million loss due to this content abandonment.

According to Square, during a meeting on March 27, the Board voted to revise the company’s approach to developing high-definition games. The result will find the firm acting more selective and focused on allocating development resources.

As a result of a close examination of the development pipeline undertaken in keeping with this revised approach, the company expects to recognize the loss on its books. Square also said it is carefully reviewing its consolidated forecasts for the fiscal year to assess the potential for impact from the above or other factors.

In its Q1 fiscal year 2023/2024 report, released in August 2023, the company noted a sales increase in its HD Games sector, however, it stated that Final Fantasy 16 sales didn’t meet expectations with 3 million copies sold, attributing the lackluster sales to slow adoption of PlayStation 5 consoles.

Adding a bit of injury is Final Fantasy 7 Rebirth, which, according to Daniel Ahmad, director of research and insights at Niko Partners, has underperformed sales-wise.

Square Enix will release its full earnings for the year ending March 31, 2024, on May 13.