Square Enix Reports Big Losses

SE cites development cancellations as a reason -- is Final Fantasy XIV at risk?

How might SE’s financial hardships affect the future of Final Fantasy XIV?

Square
Enix is cancelling the development of projects in its digital
entertainment segment -- does this mean Final Fantasy XIV is on the
chopping block?

In a press release issued today, Square Enix
revealed losing 12,000 million yen during the fiscal year ending March
31, 2011. In early February, the company had predicted a profit of 1,000
million yen for that period of time -- that’s a downturn of 13,000
million yen.
Discuss this on the ZAM forums.The
failed launch of Final Fantasy XIV was not cited as a reason for the
downturn. However, Square Enix blamed “more prudent estimates of future
cash flows,” a “tightened selection standard” for game titles and
“project development cancellation and related losses” as reasons for the
deep financial losses. Losses incurred in the wake of the massive
earthquake and tsunami that ravaged Japan amounted to 600 million yen.

The
company didn’t suffer nearly as much of a loss in sales, which were
originally estimated to bring in 130,000 yen but only brought in 125,000
yen. Operating income dipped from an anticipated 8,000 million yen to
7,300 million yen.

Square Enix’s full statement can be read here.

Keep
an eye on the Square Enix official forums to see if the Final Fantasy
XIV development team addresses this issue directly. These revised
earning statements, the continued struggles of FFXIVand the recent
hacking of the Playstation Network could spell trouble for the long-term
health of the game.

The chance that Final Fantasy XIV would be
cancelled now seems unlikely, given all the resources dedicated to
developing the game since its release in September. This game may also
be Square Enix’s best chance of producing another long-term money maker,
especially considering the company has been unwilling to drop
Playstation 2 support for Final Fantasy XI to evolve the game for more
powerful consoles and gaming computers.

Unless the development
team addresses this issue head-on, these revised earnings will
definitely increase concerns that Final Fantasy XIV is on the chopping
block.