Square Enix spends hundreds of millions of dollars every year on its video games production account, and in FY2022 it spent more than it ever has before.
A quick look at Square Enix's game investment spending gives perspective on why it sold its Western game development division to Embracer. Square Enix cut its losses after losing an estimated $200 million from Avengers and Guardians of the Galaxy, both games failing to recoup even their development budgets let alone make a profit.
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According to data provided by the publisher and compiled and converted by us, Square Enix's game investment spending can vary quite a bit depending on what it's plans are. In the last six years, Square Enix has spent over $3 billion to fund its in-development projects, with the last two years jumping up to $711 million (FY21) and a record $792 million (FY22).
This surge of game dev spending likely coincides with early development phases of key products like Avengers, which was first confirmed in January 2017.
This data gives us an idea of not only how much Square Enix is spending, but also the scale, scope, and number of projects. Games like Final Fantasy XV and Final Fantasy XVI, for example, are very expensive and command budgets of hundreds of millions, whereas smartphone games are cheaper.
The more money Square Enix makes, the more money it will re-invest into future products that will in turn make revenues and profits farther down the line.
Analysis: Why Square Enix sold its Western division to Embracer Group
- Embracer to buy Crystal Dynamics, Eidos, includes Deus Ex, Tomb Raider
- Tomb Raider trilogy sells 38 million, Deus Ex duology at 12 million
- Eidos Montreal has multiple games in development using Unreal Engine 5
- Embracer: Crystal Dynamics and Eidos' new games are 'very interesting'
- Embracer has 230 games in development, but only 13% of them are AAA
