Square Enix Revises Earnings Forecast

As players begin to enjoy the a wealth of new content within Eorzea today, Square Enix has quietly launched a different kind of update, which shows a revised outlook of the company's performance this fiscal year ending March 2011.

See how their numbers have been affected, and what role Final Fantasy XIV plays in all this, after the jump.

Discuss this in the ZAM Forums!

In the "Notice Concerning Revised Performance Forecast" released December 16th, Square Enix has painted a much more somber picture of how the 2010-2011 fiscal year is expected to turn out.

Sales were adjusted from 160 billion to 130 billion yen.  Operating profit, which measures money earned from directly from Square Enix properties minus costs, was adjusted from 20 billion to 8 billion yen.  Ordinary profit, which adds in outside investments, was adjusted from 20 billion to 6 billion yen.

Now, this brings us to the bottom line (literally) -- the column for net profit.  The revised forecast shows net profit of just 1 billion yen, which is a 91.7% decrease from their initial prediction of 12 billion.  This is also a significant drop from Square Enix's net profit last fiscal year, which the document indicates was over 9.5 billion yen. 

While the document does list a few explanations, such as "a major title receiving harsh criticism," the reasoning behind the revised forecast also focuses on FFXIV specifically, stating that the title was not up to customers' expectations of what a Final Fantasy title should be.  It then details that as a response, Square Enix has restructured the development team and plans to offer free playtime until, as Wada promised us, a concrete plan is formed.  This is written as being the driving factor behind the sharp downturn in their forecast.

Anyone who has been following the brief history of FFXIV so far probably would also have put the blame squarely in the MMO's lap.  As was indicated in the revised forecast, CEO Yoichi Wada recently made a personal appeal to players and offered free playtime "until we are able to confidently present [the customers] with a concrete plan outlining FINAL FANTASY XIV’s new direction."  Now we can see just how serious a sacrifice Square Enix is making to keep their flagship MMO title afloat.

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Party is cancelled folks
# Dec 28 2010 at 8:40 AM Rating: Decent
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These numbers look downright awful! A 91.7% decrease in estimated profit?

Hey Kids, I'm getting a Christmas bonus of 10,000.00! Were all going to disney land for 2 weeks and staying in the disney offical hotel! 10 days later....

Well kids, that Christmas bonus didn't quite come thru. Some mention of the recession, economic tough times and some other bull. It turns out daddy is only going to get 8.3% of the bonus amount I was promised. Yes, that's right. 8.3%. You kids might not understand math but that means $830.00 will be ours to spend. So won won't be going to disneyland. Instead, we'll be visiting my mother-in-law for 2 days in a hotel after gas, food and expenses are consider, things look tight. While there, we might have money to go to the waterslides. Once. No no, the b-rate waterslides, not the famous ones at West Edmonton mall with the wave-pool. When I said 'We' I meant we'll get to draw straws to see which parent and which of you three kids get to go.
FFXIV
# Dec 23 2010 at 9:56 PM Rating: Decent
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SE should have taken what everyone loves about FFXI and improved upon it. While most FF players did not start playing FF until FFVII I have played every FF game since the first FF game. Right now I feel that FFXIV is fractured and non-cohesive. The only cohesion I see is the crafting which is standard FFXI crafting improved.

And I would agree that FF is not WOW and should not be anything like WOW. If you want a WOW clone go play WOW. SE has always had very definite ideas of what FF is and should be. I just feel that the team they had on FFXIV missed that ideal. Hopefully SE can get back to what has made FF so great in the past.
Hrm.
# Dec 19 2010 at 2:43 PM Rating: Decent
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If they could fix combat, targeting, and add an AH they would be in decent shape.

Combat is the issue, and I have several different ideas on how they can improve the combat system. Posted one of them once, in regards of giving each class it's own set of specialized stances, rather than having the 2 different default attacking options. Players get their auto attack and the game gains another level of complexity that may actually be fun to play with.

Targeting. Give back my xi controls or let me tab through targets. There are a number of other problems with the limits they have imposed upon the keyboard setup. The game just doesn't feel fluent. At least with XI and most MMO's I've played, I can run up to an object, target it, and hit enter to interact with it. This is mostly because I prefer to play with a keyboard rather than a joy pad. It's actually not so bad playing with a ps3 controller though.

AH. Just add it. Stop trying to reinvent the ideal solution to all trading problems.

The other issues, like the copy and pasting of terrain should be fixed as well. The maps should just be redone. I understand why they use the pieces of terrain why they do (to separate sections of the world to reduce the cost of rendering, or at least I'm 90% certain), but you could at least make each of these sections unique.

Overall, the best words I can give to the new development team,

K.I.S.S.

keep it simple stupids.
It is what it is...
# Dec 19 2010 at 2:24 PM Rating: Decent
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I listen to all the complaints, from all the people who wanted more than SE could provide them. My answer is to simply move on. If you feel as though SE owes you anything just don't pay to play. The bottom line is... there are people that are willing to pay to play, that are happy knowing SE is willing to make the game better. They will continue, as you disgruntled players move on to contaminate another game because it doesn't meet your expectations.

SE has been around for a long time. They may have made some mistakes, but give them the opportunity to correct those mistakes. Give them the respect they deserve trying to meet the expectations of their following. I know they will come through. Give them the time they need to evaulate their position. Everyone will come out a winner...

What SE needs now is their fan's support. Bad mouthing and running away is not the behavior of a true SE Fan. I challenge all you authorities, the ones who know all the quick fixes for SE, to go out and build a better game. My guess is you will fail before the game is even launched...

Good luck with your choices...

Interesting..
# Dec 18 2010 at 12:15 AM Rating: Decent
Yeah I find it interesting how SE did with what they pleased with FFXI when it first came out. It was horrible at first. They didn't care nor listen to what their customers have to say about it until WoW came out a few years later.It took them years to improve it. They did what they please....

....... Until now. Now SE is freaking out lol.

Edited, Dec 18th 2010 12:16am by Gatubella
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8==D~~~
# Dec 17 2010 at 8:19 PM Rating: Decent
If they dont fix it by PS3 release... free2play model, anyone?
Dont keep your hopes up
# Dec 16 2010 at 4:15 PM Rating: Decent
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Square Enix is now on desperate damage control mode. That earnings report is nothing short of disastrous. Any investor seeing a 91% drop in projected earnings knows the boat is taking on too much water & its time to follow the rats.

SE needs to turn FF14 into a money maker and fast. Sadly, that means they will do something very Japanese: Copy and incorporate.

In short, they will copy any and all elements from what they see in the market out there thats making tons of money and incorporate it into FF14.

So.. yes. Expect FF14 to be a WOW clone with chocobos by June.
Dont keep your hopes up
# Dec 17 2010 at 11:03 AM Rating: Good
9 posts
Quote:
SE needs to turn FF14 into a money maker and fast. Sadly, that means they will do something very Japanese: Copy and incorporate.

In short, they will copy any and all elements from what they see in the market out there thats making tons of money and incorporate it into FF14.

So.. yes. Expect FF14 to be a WOW clone with chocobos by June.



I'm not a fan of neither games and have played both, that being said I completely agree with your first paragraph, yet after that you seem misinformed.

"Copy and incorporate" is related to japanese culture as much as it is everywhere, in fact copying what was/is good out there is the bread and butter of WoW (it took elements from Everquest 1-2, L2, FFXI, etc). Also the whole concept of "mmoRPG" began at Japan/Korea, so you tell us what culture is more adept to "copying".

So yeah if SE does that with FFXIV, it's going to be a clone of a clone (a good one though), but what game doesn't do that?, so I personally hope they copy as well as blizzard did.
Dont keep your hopes up
# Dec 20 2010 at 12:07 PM Rating: Decent
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Nazper wrote:

"Copy and incorporate" is related to japanese culture as much as it is everywhere, in fact copying what was/is good out there is the bread and butter of WoW (it took elements from Everquest 1-2, L2, FFXI, etc)....

So yeah if SE does that with FFXIV, it's going to be a clone of a clone (a good one though), but what game doesn't do that?, so I personally hope they copy as well as blizzard did.


Difference is WoW is not Final Fantasy. WoW milked the Warcraft brand name built from their strategy game releases and injected an MMO RPG into that universe. As a new title/franchise they did copy what worked from other games and built up on it. Final Fantasy on the other hand has been role-playing from the very start and in FF11 they adapted it into an MMO format.

You can take any MMO-RPG besides FF11 and find that the battle systems all follow the same core concept... but FF11's was completely different and still is unique merely because of the use of TP to use weaponskills, the renkei(weapon skillchains) and magic burst system. The first MMO to try and copy the renkei system was Lord of the Rings online with their 'conjunction' system.. no other game has done it since.

Now look at FF14. It was built from the core to be a copy of WoW but sprinkled with some FF elements like the renkei system. Gone is the TP system, gone is the interdependence between jobs/classes.. in short, it lacks 'FFness'.

Seeing how the game is drowning on its own muck, SE has two choices: Re-write the core game back into Final Fantasy standards (not innovation not improved ... STANDARD FF elements that they've used for decades) -or- rabidly copy every possible element of successful MMO's in the market and staple them together as quickly as possible.

The Japanese corporate culture does not have the capacity nor the mentality to admit mistakes were made at high levels and correct them. The current re-assignment of the FF14 team is proof of that. Those taking the blame are low level project managers... and I can practically guarantee you that the orders to make FF14 profitable by trying to emulate WoW and other US MMO RPG's came from the very top.

So what will happen is simple: In the following months SE will continue to remove FF combat elements from the game such as what little interdependence is left between the classes; will add cosmetic FF elements to keep the FF theme (chocobos, airships) and will quite literally dumb down the game to the likes of WoW where all you need to do is mash a few keys as fast as you can to kill a mob & requires very little thinking and a lot more reflex actions (click click click click!)... and will ultimately introduce mini-transactions into the game because its a working money making fad for many successful MMO's out there (EVE online, LOTRO,etc). So yes, expect them to give everyone access to a regular yellow chocobo but mini-transaction charge you for access to the evil looking chocobo/armors/etc.

Ask yourself this: If you took WoW and replaced only the graphic models with those of Final Fantasy (monsters, playable races, chocobos and airships) but kept WoW's combat and quest system intact... is that game now Final Fantasy or is it WoW with FF skin?

...and that is what SE is trying very,very hard to do now.

Edited, Dec 20th 2010 1:27pm by Skyfaller
Dont keep your hopes up
# Dec 31 2010 at 6:11 AM Rating: Decent
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That's precisely what I meant, I'm glad atleast 1 person got the point. completely agree with you.
Dont keep your hopes up
# Dec 28 2010 at 12:48 PM Rating: Decent
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Skyfaller wrote:
FF11's was completely different and still is unique merely because of the use of TP to use weaponskills, the renkei(weapon skillchains) and magic burst system. The first MMO to try and copy the renkei system was Lord of the Rings online with their 'conjunction' system.. no other game has done it since.


No, FFXI's combat isn't unique. The "attack until you fill an energy bar to unleash another attack" is not unique; that's been in RPGs and even Action/Adventure games from the NES era. It is not new, so stop trying to herald it as such.

Secondly, the skillchain system isn't new either. Remember Chrono Trigger (a predominately Enix game at the time, remember)? Two people perform two attacks that when combined produces an additional bonus. The only difference in FFXI was that instead of just seeing a flashy effect the attacks are separated and an effect is added at the end. It's the exact same thing. The higher tiers of skillchains doesn't deter from the fact that it is. not. original.

FFXI was a decent MMO, but nothing, absolutely NOTHING in the game was revolutionary with the exception of the subjob system. Everything else was borrowed, copied, or reused from previous games.

Edited, Dec 28th 2010 1:50pm by StrijderVechter
Dont keep your hopes up
# Dec 31 2010 at 6:32 AM Rating: Decent
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Nothing is original? except the fact that everything you mentioned was used in single player RPGs/Action games, the whole idea of using those elements in MMO-gaming definitely merits as original.
Just the timming required from 2, 3 , 4, 5 even 6 ppl to do a skillchain and then magic burst, against one person smashing a button twice on 2 different characters, yeah completely unoriginal for something that was never done before in MMOs...

sarcasm on-- Because we all know adapting the mechanics to an MMORPG it's a very simple brainless task, copy paste--- sarcasm off
Dont keep your hopes up
# Dec 18 2010 at 2:53 PM Rating: Decent
11 posts
Nazper wrote:
I'm not a fan of neither games and have played both, that being said I completely agree with your first paragraph, yet after that you seem misinformed.

"Copy and incorporate" is related to japanese culture as much as it is everywhere, in fact copying what was/is good out there is the bread and butter of WoW (it took elements from Everquest 1-2, L2, FFXI, etc). Also the whole concept of "mmoRPG" began at Japan/Korea, so you tell us what culture is more adept to "copying".

So yeah if SE does that with FFXIV, it's going to be a clone of a clone (a good one though), but what game doesn't do that?, so I personally hope they copy as well as blizzard did.

Speaking of misinformed:
Everquest 2 was released on 2004.11.08. WoW was released on 2004.11.23.
I doubt Blizzard took elements from Everquest 2 during that 15 day window.

Also, your claim that "the whole concept of mmoRPG began at Japan/Korea" is wrong. Please don't spread misinformation like that.
Dont keep your hopes up
# Dec 25 2010 at 1:38 PM Rating: Decent
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denshigomi wrote:
Nazper wrote:
I'm not a fan of neither games and have played both, that being said I completely agree with your first paragraph, yet after that you seem misinformed.

"Copy and incorporate" is related to japanese culture as much as it is everywhere, in fact copying what was/is good out there is the bread and butter of WoW (it took elements from Everquest 1-2, L2, FFXI, etc). Also the whole concept of "mmoRPG" began at Japan/Korea, so you tell us what culture is more adept to "copying".

So yeah if SE does that with FFXIV, it's going to be a clone of a clone (a good one though), but what game doesn't do that?, so I personally hope they copy as well as blizzard did.

Speaking of misinformed:
Everquest 2 was released on 2004.11.08. WoW was released on 2004.11.23.
I doubt Blizzard took elements from Everquest 2 during that 15 day window.

Also, your claim that "the whole concept of mmoRPG began at Japan/Korea" is wrong. Please don't spread misinformation like that.


You actually missed the point, my man. WoW didn't copy EQ2; rather, it blatantly copied EQ (the original, accept no substitutes!). EQ launched on March 16, 1999 -- ahh, the Clinton years, how I've missed thee!

Edited, Dec 25th 2010 2:50pm by LifegiverOfXegony
Dont keep your hopes up
# Dec 18 2010 at 1:32 PM Rating: Decent
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Nazper wrote:
[quote]
Also the whole concept of "mmoRPG" began at Japan/Korea, so you tell us what culture is more adept to "copying".


Uh, no they weren't, MMOs and RPGs were create in the US.
Dont keep your hopes up
# Dec 19 2010 at 8:37 AM Rating: Decent
9 posts
Yet some reading comprehension would be nice, WoW never stopped "borrowing" elements from new games that came out after it (Guild Wars to name one), so your 15 days window argument about everquest 2 goes down the drain, and even if EQ2 doesn't fit the time frame, the fact that wow copy pasted like no tomorrow won't change, so what was your point?

Also I purposedly quoted "mmoRPG" as in a whole because I know that atleast ONLINE gamming (online everything actually) started in the US. I don't know about RPGs because those come from "rpg books" and I'm not meddling with literature, because eastern literature dates from thousands of years against our western literature that dates from barely hundreds, our culture is very young.

Yet another post that doesn't change the fact that copy paste is everywhere.
Dont keep your hopes up
# Dec 19 2010 at 1:13 PM Rating: Decent
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Nazper wrote:

Also I purposedly quoted "mmoRPG" as in a whole because I know that atleast ONLINE gamming (online everything actually) started in the US. I don't know about RPGs because those come from "rpg books" and I'm not meddling with literature, because eastern literature dates from thousands of years against our western literature that dates from barely hundreds, our culture is very young.

Yet another post that doesn't change the fact that copy paste is everywhere.


The Japanese also indulged in those very books you don't want to meddle with and its from them they get their inspirations for RPGs otherwise they prolly would never create fantasy RPGs at all. They'd likely just stick to Eastern/Samurai themed games due to the lack of exposure otherwise. The themes of their RPGs are pro-dominantly WESTERN themed if you haven't noticed.

Most fantasy themed games/anime are based on western themes if they don't take place in Japan because thats what influenced them. You have a poor eye and a poor sense of gaming history for this apparently. Next your prolly gonna tell me the Japanese invented video games which my OLDER brother believed before I had to correct him.

Don't let your weeaboo-ness cloud your judgment like many just like you who like to attribute the Japanese with things they do not deserve credit for.

Also my point was not to express they don't don't borrow from other sources, if anything most post only proved your point even more about that aspect. From what I can tell they are a lot more shameless about this practice in the east.
Dont keep your hopes up
# Dec 20 2010 at 9:55 AM Rating: Decent
9 posts
Yes, my gaming history sense and eye are poor, which is proben by the fact that I admit it, unlike you, I don't need to probe otherwise, because that was never the intention of the initial comment, which was stating that "borrowing" in the gaming industry happens everywhere and is not correct to label a whole culture of something we do ourselves too as Americans.

Since your very first post you conveniently only quoted topics that had nothing to do with the main subject, seriously, keep your gaming history lessons to your older brother if you want to look smart and less bitter.

Then again what I'm writing goes beyond this conversation, because at the end of your last post, you already divulged what's your stand.


Is that a threat???
# Dec 16 2010 at 3:54 PM Rating: Decent
19 posts
Looks like they are making a big deal on the loss in Yen the team took by releasing an unfinished game. (Let's see)You made the sacrifice to give us the extended free trial then because of the same reasonfor extending the free trial you reextended the extended free trail (all while making promises of change and new content), only to replace the teams, bring out new changes and content (whic all cost's Yen itself) and then complain (but I think hint-hint) on the loss in Yen projected. Looks like the new team wants to give a sound hint that with these #'s they've got a lot of work to do. This screems "Show me the money SE" all over it. Oh, and lets not mention the fact that people with ffxi and ffxiv have still been charged full price for it since release of ffxiv or them numbers would be worse.

FinalSwag: "Good luck SE"... copy!
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Earnings
# Dec 16 2010 at 2:51 PM Rating: Default
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Anyone with a basic knowledge of the fiscal system would not wholly blame FFXIV. Games like "Just Cause 2" epic failed, so did some of their DS sales, since FF games for ds are hard for kids, so you have to depend on people who can play an FF rpg on a hand held (teens and adults), all around they're games sold like crap, FFXIV wasn't ever thought of as a seroius stream of revenue, it was Squareenix buying out some video game companies that make Just Cause, pretty much they only have like Tomb Raider to make money off of. You should really look up their company structure, post merger between Square Enix, its a history of failures. Square Enix hasn't made a good FF together.
Earnings
# Dec 17 2010 at 11:26 AM Rating: Good
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molotovzav wrote:
all around they're games sold like crap, FFXIV wasn't ever thought of as a seroius stream of revenue, it was Squareenix buying out some video game companies that make Just Cause, pretty much they only have like Tomb Raider to make money off of.



I don't understand this statement at all. The game that they spend tens of millions of dollars developing was never seen as a serious revenue stream? More like, it's the most significant portion of their projected revenue stream. MMOs are much more expensive (generally) than single serving titles, and (generally) a successful MMO will blow away a successful title of any other kind, due to the steady stream of monthly income.

The fact that sales of FFXIV have been lighter than anticipated and (more importantly) the fact that they have yet to collect any monthly subscription fees has got to have a massive effect on their projected bottom line. Let's put it this way: Every single player game they make for the next decade could flop, but if FFXIV were a huge success, they'd be profitable the entire time.

MMOs are just *that* good for the bottom line, IF they succeed.



Edited, Dec 17th 2010 12:26pm by KarlHungis
Good luck SE
# Dec 16 2010 at 10:21 AM Rating: Good
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I'm glad they've realeased these numbers. I think it really helps to illustrate what kind of a hit SE is taking. Of course you can make the argument that its their fault that they released the game in a poor state but you cant deny that looking at a 92% decrease in projected profits and then considering the fact that SE has suspended subscription fees indefinitely is kind of telling that they're doing everything they can to fix the game.

I think understanding how much money is on the line shows how important it is for SE to fix the game from a financial perspective, something that we could only speculate on before these figures were released. I think that we can rest assured that they're trying as hard as they can to fix the game, if not for our benefit then for their own. I'm just wondering... what happens if they can't salvage the game?

Good luck SE.
Bold Statements
# Dec 16 2010 at 6:51 AM Rating: Decent
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I don't think this is making a bold statement because it's not that the players aren't paying for it, it's just that they already know they made a mistake and they are not charging.
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i love it no matter what
# Dec 16 2010 at 6:30 AM Rating: Decent
I never ditch out a FF game as a FF players foe the last 26 years now and am still playing many of there titles and so far FFXIV seems so good to me as it take the FF name.

i love it in Eorzea
# Dec 16 2010 at 6:01 AM Rating: Decent
personally ive been enjoying just about everything theyve been throwing into the game.. its not perfect, but ****, what they have done with the game seince september, its an amazing place to be.. and i cant give it up.. its too much fun!
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Good!
# Dec 16 2010 at 5:42 AM Rating: Good
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If the shoe fits wear it! I am glad 14 has effected SE so greatly. It shows a good point to game developers that people don't pay for 'crap'. They make bold statements, however I'm still waiting to see what this 'new direction' is. So far I am not seeing to much 'new'. Everything coming out is still things that should have been in place for launch. So hopefully in the next few weeks the new team will have some sort of announcement to their customers.
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