Square Enix posts $33m loss in half-year result

Square Enix has reported a massive $33 million loss for the period ending September 30th.

The substantial drop appears to stem from a restructuring effort at new studio Luminous Productions, which seems to have shifted focus to develop large, high-budget triple-A games.

Luminous was set up earlier this year, with key talent from Final Fantasy XV heading up the new studio. It’s not clear exactly how much has changed, as the studio was founded with the claim that it would be developing triple-A titles.

Additionally, net sales dropped 15 per cent year-over-year to $1.08 billion, while profits were slashed in half down to $76.4 million. Operating income fell 61 per cent to $88.5 million, with ordinary income falling 43.6 per cent to $132.8 million.

Slight slump

Square Enix failed to comment on performance regarding it’s two big-ticket releases for the six-month period – Nintendo Switch-exclusive Octopath Traveller and Shadow of the Tomb Raider.

Game releases come under Digital Entertainment in Square Enix’ results. Net sales in that side of the publisher’s business fell 18.9 per cent year-over-year to $732.5 million. Digital Entertainment operating income halved to $115.4 million.

That drop was also attributed to poor mobile and browser game performance, and a reduction in licensing income.

But Square Enix is somewhat hopeful for the remainder of the year, predicting net sales to increase by 7.8 per cent to $2.39 billion.

With older titles performing below expectations, Square Enix plans to rebuild its development and operation team for mobile and PC browser games and focus on select new games going forwards.