More Woes For Square Enix
Oh dear, oh dear, the pit is getting deeper and deeper for Square Enix. Yesterday we heard that Tomb Raider had the best launch of 2013 so far and yet it was one of the games noted for not meeting sales expectations in former CEO Yoichi Wada’s reasons for resignation.
Now we’re hearing that there have been layoffs at the companies LA office which primarily handled administration for MMOs in north America.
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“We can confirm that Square Enix’s Los Angeles office has eliminated a number of positions as part of the corporate restructuring announced last week,” a representative told Joystiq.
“This is an unfortunate situation and we are offering assistance and severance packages to any employees affected by this, we want to thank them for their hard work and sincerely wish them well in the future.”
Meanwhile the company’s new president will officially start in June and take up the arduous task of fixing this company and figuring just what is going wrong. Yosuke Matsuda plans to take a long hard look at the way the company does business and figure out why it isn’t making money.
“After having succeeded the important role as the president, I plan on reviewing all Square Enix duties, business and assets on a zero-based budgeting standpoint. Due to the radical change of environment, I’d like to fundamentally review what works and what doesn’t work for our company, then cast all of our resources towards extending what makes us successful and thoroughly squeezing out what doesn’t,” he said.
“As far as a concrete plan on what to expect from us, I will further explain it on another briefing session in the near future, so I kindly ask for your patience. Thank you for your support.”
What’s alarming is that successful titles such as Hitman: Absolution and Tomb Raider are not meeting expectations so it’s safe to assume that Square Enix is not using its funds appropriately thereby requiring it to recoup far more than other publishers in comparison when it comes to unit sales.
Evidently, Square is making money on smaller, domestic-only mobile and web-based games. The company therefore plans to push that end of business to encourage some profitability or at least restrict losses. This suggests the publisher may let its bigger, AAA endeavours slide somewhat which not only means it will likely drop into anonymity but we’ll also have to rely on someone else to buy up big franchises such as Hitman, Deus Ex and Tomb Raider if they are to remain alive.
Curiously, Wada stated after his resignation that he would stay on at the company in an unspecified role almost as a kind of atonement.
“As an employee, I believe it is my duty to help the company and give proper results from it. I will be retiring from the line of management, but I plan to work on site as a way to pay my debt to the company,” he said.
The real punch to the gut is that Square Enix rather soberly stated the the company does not expect to make any money on console games for the next two years given the generation shift due to happen and the large sums invested in the companies new Luminous engine.
Is Square Enix in-line to be the next THQ or is there still time to salvage this financial wreck?