Square Enix cancels $140 million worth of games and projects

Square Enix has cancelled $140 million worth of games, and multiple games could have been affected.

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Today, Square Enix announced it'll be taking a ¥22.1 billion loss in its Fiscal Year 2023 financials as it cancels content that was in the production pipeline. Last quarter, Square Enix CEO Takashi Kiryu announced plans to prioritize quality over quantity--instead of releasing multiple products that may not do well, the team will try to focus on safe bets.

To put the losses into perspective, Square Enix spent about $792 million on games development throughout FY22 as part of its production budget account. The updated spending for FY23 will be published in May.

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The news comes shortly after reports indicated that Final Fantasy 7 Rebirth is potentially underperforming, or at least selling half as many copies as its predecessor in the same timeframe.

From the reception of the game, it seems the company's other potential sales miss is Foamstars, a live service-oriented arena shooter with a colorful style.

There are multiple new games in development at the company, including Kingdom Hearts IV, Dragon's Quest XII, and potentially even a Final Fantasy 9 Remake. It's unknown which of these projects--or those that have been unannounced--have been impacted.

Square Enix explains the losses to investors:

At the meeting convened on March 27, 2024, the Board of Directors of SQUARE ENIX HOLDINGS CO., LTD. (the "Company") voted, in light of the myriad changes underway in the environment surrounding its Group, to revise the Group's approach to the development of high-definition (HD) games with the intention of being more selective and focused in the allocation of development resources.

As a result of a close examination of the Group's development pipeline undertaken in keeping with this revised approach, the Company expects to recognize approximately ¥22.1 billion in content abandonment losses on its books for the fiscal year ended March 2024.