In a revision released today, Square Enix announced that it would be changing its forecasts for the fiscal year ending on March 31, 2011. The previously forecasted net sales came to ¥130 billion ($1.6 billion), with a net income of ¥1 billion ($12.3 million). The revised projections call for net sales of ¥125 million ($1.54 billion) with a devastating net loss of ¥12 billion ($148.2 million). Both sets of numbers are down from the fiscal year ending on March 31, 2010, with net sales being recorded at ¥192 billion ($2.37 billion) and net income coming in at ¥9.5 billion ($117.4 million).
The company blames the losses on cancelling current development projects to provide a tighter portfolio and the recent earthquake in Japan.
“Under a rapidly changing operating environment and more prudent estimates of future cash flows, the Company plans to write down goodwill. Further, as a result of introducing a tightened selection standard regarding title lineup to strengthen the revenue base of the Company’s digital entertainment segment, project development cancellation and related losses are expected,” said Square’s statement.
“Additionally, damage and losses during closures at, and restoration of, amusement facilities resulting from the Tohoku Pacific Ocean Earthquakes and Tsunami caused an extraordinary “loss on disaster”,” it continues.
When it’s all said and done, Square Enix expects this year to “result in total extraordinary losses of approximately ¥16.0 billion ($197.6 million).”
Oddly enough, most of the company’s high-profile titles in development are coming from Eidos, the European arm of the company. Those titles include Deus Ex: Human Revolution, Thief 4, Hitman Absolution, and Tomb Raider. Final Fantasy XIV, Square’s major MMO, was released in September of 2010 and still remains free-to-play due to quality issues.
