Square Enix CEO Yoichi Wada explains why the company lost so much money last year and how it hopes to recover in the future.
Square Enix recently published a revised financial forecast where the company projected a loss of around ¥12 billion ($148 million) for the financial year ending on March 31, 2011. Not good. CEO Yoichi Wada explains that the company's methods had unexpectedly become weak, and may take a year or two to bring back up to speed.
Speaking at an investor's briefing (via Andriasang), Wada admitted: "Our game development has become weaker than expected. Revamping it will take one or two years."
¥4.5 billion of the losses were partially related to the development of Final Fantasy XIV, which received such a poor response that Square Enix still still isn't charging a monthly fee for it more than 6 months after release, and the cancellation of multiple titles. Wada revealed that Square Enix suffered from poor internal communication between project leads and subordinates, in addition to a work environment where employees weren't able to properly divide tasks amongst each other.
To bring the company back into profitability, Wada laid out a plan that includes the development of 5 brand new IPs. These IPs would join established franchises such as Final Fantasy, Dragon Quest, Kingdom Hearts, Deus Ex, Tomb Raider, and Hitman. Two would come from Square Enix's Tokyo branch, one from Eidos Montreal, one from IO Interactive, and one from Square Enix's Wimbledon studio. Wada also hopes to expand Square Enix's presence in social networking and mobile markets, taking advantage of external developers with more experience in those realms, as opposed to current staff that's used to working on packaged products.
Development on the new brands could take 3 to 5 years, Wada predicts. Square Enix does have a strong lineup of titles announced for the near future, which include Deus Ex: Human Revolution, Hitman: Absolution, the Tomb Raider reboot, Dragon Quest X, Final Fantasy Versus XIII, Final Fantasy Type-0, Final Fantasy XIII-2, and more. Perhaps these titles, combined with its brand new IPs, can help Square Enix make a recovery in the future.