SE Q1 2013 Report -
source
2013 - Market Q1 Performance
Their financial report for Q1 2013 is all doom and gloom, but the sales targets are even more interesting since we know they are already in the state of projected losses, and unlike the Financial report, demonstrates how close they are to panic. (Also Namco is taking SE to court for backing out of contractual obligations and commitments with Bandai)
2013 Sales Targets = 75,000,000 sales total!!!!
That is across all 2013 releases of course. But still, to have those kind of sale targets and still be projecting losses for the fiscal year...what does break even look like? 100,000,000 sales?!
Back to their financial report, they expected to make a huge amount of money off of tomb raider, sleeping dogs, and hitman absolution. They expected Tomb Raider alone to make USD $ 300,000,000 in sales to BREAK EVEN!
1. Q1 Projected Losses - 3.5 Billion Yen
- Actual Losses - 13.5 Billion Yen (USD $13,107,5100)
2. Q2 Projected Losses - 7 Billion Yen.
- Actual Losses - due July 9th 2013
3. Tomb Raider Reboot
- Game development + Marketing Costs: $USD 300,000,000
- Expected sales: 6-7 Million within first Month
- Expected Annual sales (2013): 11 Million
- Actual Sales as of June 13th: 4.1 Million
Sales value in $:360,000,000
Net: 120,000,000 (only a third of the sales is SE's revenue)
Loss: 180,000,000 as of June 2013!
(to put the above in contrast, compare to major recent upsets in company executive leadership due to below)
4. Sleeping Dogs & Hitman Absolution reason for EX-CEO's resignation/termination
- Sleeping dogs expected sales: 3.5 Million (minimum)
- Sleeping dogs actual sales: 1.7 Million
5. FFXIV & FFXV
Square ENIX has spent more than 600,000,000 on developing FFXIII or now known as FFXV.
FFXIV 1.0 cost the company a whopping 400,000,000 USD in development and marketing costs. It is said they went over budget in 2011 to increase marketing costs due to dismal subscription and sales rates. So that 400,000,000 USD isn't the real number. Probably more like 450,000,000 USD.
I don't have any info on how much they've pumped into FFXIV 2.0 but we know its hidden somewhere in their financial reports game development section.
FFXI
As of end of Q1 2013, FFXI revenue had decreased 9%.
In short:
If FFXIV succeeds but FFXV sucks, they're doomed.
If FFXV succeeds but FFXIV sucks, they're doomed.
Unless both titles perform as well as SE projects, they're doomed.
They actually mention this in their report:
"I believe that this situation is not a one‐time event for the
fiscal year ended March 2013, but is a structural issue within
the packaged product sales model. As a result, I believe itis
difficult to guarantee an appropriate return on our
investments within the revenue model of purely packaged
software.
It is important to consider how to change business models in
light of rigidity from the perspective of pricing, and I believe
that the transformation to online titles and the diversification
of profit opportunities is the key"
I guess that is a nice thing to read for FFXI players, only a few years too late. If SE had realized this earlier and pumped more development into its flagship online title... who knows where they would be now..
Instead they milked the hell out of FFVII with spin offs and spin offs of spin offs and are now repeating the same mistake with a much less valued franchise - FFXIII- lightning.
Given SE's track record of not being able to predict f_ck all, all bets are on SE not surviving 2013.
That might actually be good news for FF fans. There are a few companies out there with large enough funds to buy Square Soft.
My prediction:
In 2014 SE will sell off its Square Soft assets and divisions to consolidate its liabilities. FF franchise is too big to loose, SE isn't.
EDIT: Have to get it in here - FFXIII-VERSUS
This is the first game in history to be announced as flagship title for a new generation console (PS3) and take so long to develop that it is now a flagship title for the next gen console, PS4. just ridiculous.
