Square Enix's market cap is down $2 billion since Final Fantasy 16 launched

[midian182]

In brief: Square Enix, the Japanese entertainment giant behind the Final Fantasy games, is in trouble. Since the release of the latest entry in the series, Final Fantasy 16, the company has lost almost $2 billion in market value, and it might not be able to recover.

The excitement surrounding PlayStation 5-exclusive Final Fantasy 16's pre-release in June pushed Square Enix's stock price to its highest point of the year. It has fallen 30% since then, closing on Wednesday at its lowest level since May 2022.

Final Fantasy 16 is a departure from its predecessors, even the recent ones, with many comparing it to a full-blown action game like God of War. Not everyone likes it, but FF16 still has an excellent Metacritic review rating of 87 and a respectable user score of 8.1.

Final Fantasy 16 sold three million copies during launch week. Square Enix told IGN in July that sales were "extremely strong," and it had sold relatively well. However, sources say those sales have slowed significantly and failed to meet overall expectations.

It seems the latest Final Fantasy wasn't successful enough to offset Square Enix's flops from recent years. The 2020 live service game Marvel's Avengers was so disliked that it's essentially being killed off this month. There was also Forspoken, a title that had generated massive hype ahead of release with promises of it being a technical and visual marvel, only for it to arrive to unimpressive reviews and lackluster sales. There have been some less-than-successful mobile games adding to Square Enix's woes, too.

Forspoken: not a good game

"Flooding the market with unfinished, bad or untested games is a bad move," said Tokyo-based developer and gamer Michael Prefontaine. "The company has overstretched itself on too many titles without proper oversight."

Bloomberg reports that Square Enix reported a sharp profit decline in August, with shares falling by double digits. The publication writes that a big part of the problem is producers at the company being given full reign over the scope and direction of projects, as well as a shortage of proper documentation and team structure, resulting in end products of varying quality. Analysts are worried that the company's game development structure and quality control could limit its longer-term performance.

New Square Enix CEO Takashi Kiryu is trying to make changes across the company. He aims to reduce the number of smaller games in development, focusing instead on larger, big-budget titles that are more likely to be more profitable. But it could be a case of too little, too late.

Square Enix announced this month that two paid expansions for Final Fantasy 16 are in the works. It also confirmed a PC port for the game.

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https://www.techspot.com/news/100146-square-enix-market-cap-down-2-billion-since.html

 

[i like foxes]

They keep the prices of the games high even long after the launch . So , no surprise .

 

[winjer]

I guess that push into NFTs paid off...
...not.

 

[James Ryan]

A good portion of this is just big money taking out their profits and moving on to something else while they know Square Enix doesn't have anything decent in the pipeline. It's pretty logical really. They'll be back when the next big thing comes around. If the company doesn't sink first.

 

[EdmondRC]

Square pulled a Disney Star Wars. Trying to increase their audience, they didn't give fans of the series what they wanted, which was a better Final Fantasy than FFXV (I liked FFXV and it eventually made money and had massive sales, but the amount spent to develop the game did not bring much in actual profits. A lot of FF fans did not like the game though). They also attempted to 'mature' the game which did nothing to bring in new fans, but rather just made it awkward to play a Final Fantasy game if you had young ones around. I'm a longtime fan of the non-MMO FF games, but I passed on this one. The demo was fun, but I realized it wasn't a game I could play on my Playstation 5 when my kids are around since that is in my family room. So, no deal. Plus, even though the demo was fun, it did not feel like Final Fantasy despite having the veneer.

 

[kira setsu]

Thats what happens when you release games on one system and people know if they wait it'll appear on their system of choice.

 

[erickmendes]

Square looks a lot like Nintendo... Got exclusive IPs with HIGH prices... I love Square games but can't keep up with the price.

 

[GoldenGoat]

Thats what happens when you release games on one system and people know if they wait it'll appear on their system of choice.

All the exciting is gone by the time it gets to PC. It has to cost them sales on PC. I do wonder if whatever Sony pays them for exclusivity is worth the lost sales. And does Sony really make extra console sales because of this? I'm not going to buy a second system. It takes up space in my apartment that I don't have and it's money that could be spent on games. I'm not going to go out of my way to support a company that treats me like a second class citizen because I don't have the right machine.

 

[human7]

"The company has overstretched itself on too many titles without proper oversight."

Typically this means managers made bold deadlines and weren't pulled back from it.

 

[Theinsanegamer]

Square looks a lot like Nintendo... Got exclusive IPs with HIGH prices... I love Square games but can't keep up with the price.

The difference is that nintendo has wide brand appeal, whereas square is more niche.

I guess that push into NFTs paid off...
...not.

Dont forget selling off their western development houses and IP to pursue those NFTs!

Square pulled a Disney Star Wars. Trying to increase their audience, they didn't give fans of the series what they wanted, which was a better Final Fantasy than FFXV (I liked FFXV and it eventually made money and had massive sales, but the amount spent to develop the game did not bring much in actual profits. A lot of FF fans did not like the game though). They also attempted to 'mature' the game which did nothing to bring in new fans, but rather just made it awkward to play a Final Fantasy game if you had young ones around. I'm a longtime fan of the non-MMO FF games, but I passed on this one. The demo was fun, but I realized it wasn't a game I could play on my Playstation 5 when my kids are around since that is in my family room. So, no deal. Plus, even though the demo was fun, it did not feel like Final Fantasy despite having the veneer.

This whole decade will be looked back upon as the time businesses got so full of themselves, so detatched from reality, that they managed to drown in a desert.