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Square Enix six-month earnings falter

Publisher sees April-Sept. revenues sink 25% to $836 million, as profit falls 36% to $21 million; DQ Monsters: Joker 2, Kane & Lynch 2 sell 1 million.

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Square Enix provided investors and analysts fair warning of its rocky April-September quarter earlier this week, when it revised its revenue projections for the period downward by 10 percent. True enough, the Japanese publisher has now released its official financial report for the sixth-month period, and it reflects a steep decline from the same period a year ago.

Kane & Lynch know how to make a million.
Kane & Lynch know how to make a million.

For the first six months of its in-progress fiscal year, Square Enix reported sales of ¥68.05 billion ($836 million), down 25 percent from the same period a year ago and in line with its revised forecast. The publisher's profit revision also accurately pegged its actual net income for the fiscal half-year, coming in at ¥1.72 billion ($21 million), a 36 percent year-over-year decrease.

As Square Enix said earlier this week, the cause for the earnings declines was anemic receptions of some of its new releases. Square Enix released a handful of high-profile titles during the period. Included among these were Front Mission Evolved, as well as Kingdom Hearts: Birth by Sleep, Kane & Lynch 2: Dog Days, and Lara Croft and the Guardian of Light.

The publisher today noted that two of its new releases passed the million-unit milestone: Dragon Quest Monsters: Joker 2, which released in Japan in April, and August's Kane & Lynch 2. All said, the home gaming segment pulled in revenues of ¥35.18 billion ($432 million), with operating income tallying ¥6.48 billion ($79.7 million).

The publisher expressed disappointment over its arcade business in Japan, which the publisher said "remained at unsatisfactory levels under the current difficult market conditions." Net sales for its amusement business totaled ¥23.54 billion ($289 million) for the April-September period, as operating income came in at ¥1.98 billion ($24.3 million).

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Avatar image for TheTrueMagusX1
TheTrueMagusX1

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@WilliamSmith45 No there are various reasons as to why people donot like FFVII. There are older players who did play FFVII at release and did not like it. It has nothing to do with age, and as for FFVII being the best RPG ever, thats subjective. I think the game was important its time of release, and still to this day, but...the game has not aged well in terms of graphics and it needs a new translation. The game is far from perfect. I prefer plenty of other RPGs from FFVII, including FFVI, Chrono Trigger, Xenogears, FFIX, Baldurs Gates 1 and 2, Planescape Torment, Mass Effect 1 and 2, Vagrant Story, The World Ends with You, so what you said is clearly not fact. And thos games I think are better are not fact. You should learn the difference between fact and opinion as that you are clearly blinded by pure emotion.

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WilliamSmith45

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@mjc0961 Yeah ur wrong. Maybe a small % dont want a FF VII Remake but the majority of the world does. Why dont you create a Poll on FF VII Forums on gamespot and we will see how many people Do/Dont want a FF VII Remake? Or go to IGN.com or PS3Trophies.org and crearte a poll. Id be interested in the results. But i knoiw what the results wiould be.

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wilard34

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Remember SquareSoft, remember the GREAT games they made. Oh what has happened to this company since its merger. Le sigh.

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punanisher

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Remember when Square made good games? I bet their profits were through the roof back in the ps1 era. You know, when a single console had 3 Final Fantasies, a Chrono sequel, Parasite Eve, Xenogears, etc. Have they released anything close to the caliber of those games in the last 5 years? Not in my opinion. Go back to your roots, Square.

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chesed

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Now people are starting to see the result of Sakaguchi leaving. I guess I'm one of the few that actually enjoyed FFXIII. Totally not my favorite ff by far, but I still enjoyed it. I'm playing FFXIV still, and honestly, I don't know why. I agree it shouldn't have been released at this point. Even with the November update. You can't ask reviewers not to review a game when people are paying for it. They shot themselves in the foot. I find it odd that such a large company can't find success with any newer properties. Resting on their best stuff, which is getting quite old now, can only take them so far. I agree. They need to listen to their fans. As a total aside, I wish Peter Jackson would direct a three part movie trilogy based on FFVI.

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WilliamSmith45

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@TheTrueMagusX1 The people who dont like FF VII were like 7 yrs old when they played it. I just downloaded it cause i never got to play as a kid. I love the game with a passion. Its so good. I have beat it 2 times. Yes everybody in the whole world wants a FF VII remake. The haters can hate the best RPG ever made i could care less but the majority of the world wants a FF VII remake its been proven.

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Avatar image for thisranks
thisranks

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One of these days gamers will realize that part of the problem is themselves, not the developers. I wish everyone who complained about this type of thing would start a development company and see how bloody hard it is to please everyone all at the same time. I can imagine it's like juggling millions of balls all at the same time. Ain't gonna happen....but it would be interesting to see those here complaining on the other side of the coin.....

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Avatar image for Cwagmire21
Cwagmire21

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@Kou-Nurasaka Because their investors aren't getting as much money from dividends when profits drop.

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JKnaperek

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Not surprised. Someday, probably sooner than you think, SquareEnix will be bought out by a company that actually makes good games. Part of their problem is that they don't listen to the fans. SE's fans have stated all over the internet what they want, and SE basically ignores them. SE was one of my favorite gaming companies, but my respect for them has drastically decreased with the crud release of FF13 and FF14. I have completely lost hope in their ability to create games for their fans.

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Avatar image for deactivated-5b52914f4e686
deactivated-5b52914f4e686

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@Kou-Nurasaka The operating income is whatever money is left after selling expenses, salaries, interests, exchange rate, etc. in short, is the money u got left before taxes, once you take out the taxes you have to pay, you get the net utility/loss. Hope I could explain it for you =D

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WilliamSmith45

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@Janccg I couldnt agree more with your post. Yes everyone does want a FF VII Remake. I just dont know if SE can recover. If they make FF VII Remake and KH III they can regain there beloved audience.

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Avatar image for TheTrueMagusX1
TheTrueMagusX1

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@WilliamSmith45 No offense but none of your arguments hold any validity. All you keep saying is that your impatient about KHIII and the FFVII remake. Then you use an IGN article as a validation for FFXIII failing. So thats their thoughts on the matter. Contrary to what you see there are people out there that enjoyed it. Also if you did not care about FFXIII versus as you claim, you would not be bringing it up. And saying that everyone wants a FFVII Remake is just plain wrong. Not Everyone wants an FFVII remake, as there are alot of people who donot like FFVII in the first place, as there are alot of people who do. And even those that do like it are divided. Generalizing into one group and failing to back arguments is funny as you told some one that they failed. And by the way its Nomura, not Namura...

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ANUBISZER0

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They would make soooo much money if they just gave us a Final Fantasy VII remake.

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deactivated-5b52914f4e686

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Ever since FF VIII the franchise has been declining slowly but steadily (Remember FFX-2?) and yes everyone is aching for a FFVII and even FFT remake. lastly, they're loosing money because they want to, i don't know why they don't sell the good titles in the Xbox... sigh... so much for a company i admire and respect, I just hope they can regain the shine they used to have.

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jedicommand7

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well, maybe if they'd finish versus and agito, that would help.

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cavieblaze420

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lets see the last two final fantasy being twelve and thirteen sucked when are they going to bring the series back to its former glory and wheres kingdom hearts three i miss the days of squaresoft

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WilliamSmith45

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@paranormalnut Versus 13 is not goin to the 360. Its been stated by Namura himself. Every wants a FF VII Remake so you fail. Ign.com wrote why FF 13 failed to please western gamers. read this article than tell me the game was a success.

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XanderZane

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@shadowysea07 said: @XanderZane lol kh bbs should of done better? how exactly could it have when it sold over 800,000 in japan alone on the psp 500,000 k in the first week. which is nearly 3x the amount that days and chain of memories did for the handhelds. ************************************************* Uumm.. SquareEnix is saying it didn't sell over 1 million copies in that period, not me. So yell at them. I'm not saying the game is bad, as I still want to get it myself. I guess they didn't include the U.S. sales as it probably got released after the 6 months period over here. Yes, FF XIV is more of the same from what I heard. I thought it was going to be different without the heavy grind, but everyone says it's slow leveling

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paranormalnut

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@WilliamSmith45 Versus XIII is going on the 360 as well. It was shown at some game show. If you did not like FF13, you will not like this. It the same battle and level system as ff13. They will not make a remake of ff13. if they do, it will only look the same and it would be a 10 or 20 year date in witch it came out like they are doing with the others. Not every one wants a ff7 remake any ways.

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WilliamSmith45

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SE keeps popping out FF games, they need to stop with the seriews all together. They need to focus there time on FF VII Remake and KH III. Right now thats all the matter. Gamers want a FF VII Remake its been [proven since they SE showed that Tech Demo so long ago. Gamers want KH III we are tired of waiting for this gamke just cause of Versus 13 delay. This is 2010 it doesnt take 6+ years to make a FF game not anymore at least. The problem with SE is they announce games 6 yrs before starting them. If Versus 13 Fails im gonna laugh and so will many other gamers worldwide. The only good FF game was FF VII. Its been proven that FF 13 failed over here in the U.S. but does SE care of course not.

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BibiMaghoo

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When will they just make a proper final fantasy and some more money with it? WTF is wrong with them that no one in the company see's the obvious? They literally have a licence to print money.......and they throw it away.........why?

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gskywalker09

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serves them well for making crap games like Kane & Lynch 2........

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WilliamSmith45

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What really sucks is that Versus 13 was announnced 6 years ago and its still not out,not that i care but SE shoulda spent this time on Kingdom Hearts III. What is Versus 23 Failsnot that it will but maybe SE will learn that not all FF games are a success. Either remake FF VII or dont bother making anymore FF games. KH III needs to happen before 2012 cause us KH Fans have waited long enough. FF VII Remake would sell like crazy but SE says they need the original team for it to work not true. they have the story, just put it with PS3 Graphics and ur set. I have lost all faith in SE. We want FF VII REmake and KH III. We dont want to wait till 2015 for these 2 games. FF VII was the best FF ever made and them making new FF games is just not smart.

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lamprey263

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Of course they'll be down, the long awaited FFXIII launched in March, and in the April - September time-frame their only major title was Kane & Lynch 2, which wasn't much of a hit, and even if it were it wouldn't hold a candle to FFXIII in terms of sales.

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adamms1384

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Heres a simple solution Square... Go back to your roots.

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vega13mv

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i hope this makes them start paying attention, i mean, how could you release FFXIV like that? i wouldve rather Square come to my house, kick me in the nuts and take my wallet, that wouldve been less of a punishment than playing that horrible game.

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shadowysea07

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@XanderZane lol kh bbs should of done better? how exactly could it have when it sold over 800,000 in japan alone on the psp 500,000 k in the first week. which is nearly 3x the amount that days and chain of memories did for the handhelds.

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CoRiNi

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in your face Square for ruining Final Fantasy

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blueness

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FF XIV being a total pile of dog faeces probably hasn't helped their cause.

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Crush_Project

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my buddy was so excited for front mission, but traded it in just a couple of days later as he says its a stripped down and slower version of armored core. i dont know anyone that likes the new ff stuff and the new kane and lynch has gotten terrible reviews left and right. Square Enix really needs to fire some people.

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teknicz

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You spend a gazillion dollars in graphics and CG movies that do NOTHING for the story/gameplay/concept. No surprise you're not making money when your approach is completely wrong.

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Kou-Nurasaka

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Wait. Does thier operating income cover both employee salaries, expenses, utilities and everything? Because, why are they complaining? That means the company is in the black by 352.1 million just in the home game segment. Why is this news? That being said, I think that SE needs to rethink how they are doing thier games. You can't have a mish-mash of Real Time Combat and Turn Based. It has to be something akin to FFIV-FFIX or something like Tales of Symphonia. Giving the worst of both just dosen't cut it. I agree with XanderZane; SE is trying to revitalize the JRPG market, by giving us (the fans) whatever they think will win over the gamers who fall in that happy niche of newcomers and hardcore. You can't do that, because then you only satisfy the people on the fence; which results in alienation from both your hardcore fanbase and casual gamers. So what's the solution? I don't know, but, these guys are talented and intelligent. They have to change some things up, without completely turning thier backs on the people who got them to where they are.

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Animatronic64

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[This message was deleted at the request of the original poster]

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3KindgomsRandy

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Well, it would likely help their case if they released games people actually wanted to play.

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Weltanschauung1

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This sentence needs editing. "As Square Enix said earlier this week, the cause for the earnings declines was anemic receptions of some of its new releases." I'll give it a try... "As Square Enix admitted earlier this week, the cause for the earnings declines was anemic inspiration/quality/playability/magic of some of its new releases, unlike titles past."

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XanderZane

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SquareEnix keeps trying to redefine the JRPG by making it appealing to both Japan, UK and US. They aren't giving us the quality stories we are used to getting. I wish they would go back to their roots for the game play as well. Some of their RT battle systems, just don't work right. I'm still fond of turn-base if it's done correctly.

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hajjjustin

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well maby if you released your games for japan and the rest of the world all at the same time than there would not be such a decrease in revanue. also stop making such bad games, FF13 sucked. id rather play FF1 for my cell phone than play FF13. Go back to your roots!

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Albenuova

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What Square-enix really needs to do is put out games that actually appeal to western games, and still stay true to its origin. The quality of their games these days are mainly base on graphics. Oh and also they shouldn't make as sequel that on one ask for.

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XanderZane

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Not surprised. Front Mission series is good, but it's not big over here in the states. I'll probably still pick up Front Mission Evolved, as I liked the PS2 game. There's also a game for the DS as well. I'm surprised Lara Croft didn't sell better. I just download my copy last weekend with all the free DLC. It's a great game and should sell well over the holidays, especially with the FREE content. Kane & Lunch 2 wasn't great, so I'm surprised it sold over a million copies. Kingdom Hearts should have done better, but PSP hasn't been a big hit as of late. Their PSP Go kind of ticked people off. Besides Kane & Lynch 2, I will own all the rest of those games some time next year.

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