Summary
Final Fantasy 16and Square Enix’s method of handling of the game’s development costs have impacted the company’s operating profits, according to President Takashi Kiryu. That isn’t to say thatFinal Fantasy 16didn’t sell well, however. Kiryu was simply being direct regarding a complicated financial situation at Square Enix as part of a recent earnings report. Nevertheless, the comment has prompted a conversation regarding the cost of developing major games in franchises likeFinal Fantasyand what’s best for developers' futures.
The release date ofFinal Fantasy 16was on June 22, so financial reporting regarding the action game’s sales is coming just over a month after launch. That’s a relatively short amount of time but still offers a look at the game’s long-term success. Exact sales numbers for Square Enix are not available, but the company didconfirm thatFinal Fantasy 16sold over 3 million unitsin the game’s first week of release.
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In the most recent Square Enix earnings report Takashi Kiryu was forced to explain why the company’s operating profit dropped 79%, from ¥14.4 billion to just ¥3.0 billion. The answer is that Square Enix expensed thefull cost ofFinal Fantasy 16’s developmentin its first financial quarter. All future sales are expected to be profits, but in the meantime, the development costs of the game have had an impact on the company’s numbers.
Square Enix considers the sales ofFinal Fantasy 16to still be within reasonable expectations, regardless. While the company had a positive response to PS5 sales thus far,Square Enix hinted at future increased support for Xbox platformsthis past week. Any potential future ports to other consoles or the PC will likely help to further increase the company’s profits.
It’s difficult to make any assumptions about the situation.Final Fantasy 16is undeniably a success. But it was also a very expensive game to make, and is exclusive to a single console. If the PS5 had as many players as the Nintendo Switch, if it had launched on PC at the same time, or if there was a PS4 version, there may have been enough initial sales to prevent the operating profit drop, or at least reduce it.
Due to the situation at hand, Square Enix’s stock price dropped significantly in Japan. Square Enix is said to have promised changes going forward, including less investment in mid-sized games and more in AAA releases. What that means forFinal Fantasyand other Square Enix projects, however, is unclear.
