Final Fantasy 16 Causes Square Enix to Suffer $2 Billion Market Value Drop
Final Fantasy 16's launch leads to Square Enix's market value plummeting by nearly $2 billion, as the JRPG's underperformance triggers a notable profit decline in August
Square Enix has faced a challenging period on the stock market, with a recent report indicating a loss of nearly $2 billion in market value following the highly anticipated release of Final Fantasy 16 in late June. Shares of Square Enix have plummeted due to disappointing sales of Final Fantasy 16 and a significant decline in profits reported last month. Despite these setbacks, Square Enix has refuted allegations of underperformance and asserted that sales for the JRPG on PS5 were exceptionally robust in July.
Square Enix's future is uncertain according to investors and analysts. Game consultant Serkan Toto mentioned that the company is facing challenges with their game production, lacking enough titles that can achieve blockbuster success. These titles are instead considered "kind of OK" and easily forgettable. UBS Securities analyst Kenji Fukuyama added that Square Enix has yet to establish another brand as influential as Final Fantasy or Dragon Quest. Looking ahead five years, Fukuyama expressed doubts about investors having confidence in the company's future.
The company released a major game this year, called Forspoken, for PS5 and PC, which is separate from their well-known series. However, Square Enix acknowledged that the sales of Forspoken were disappointing and the reviews were challenging.
According to Bloomberg, the newly appointed CEO of Square Enix, Takashi Kiryu, intends to alter the company's focus towards high-budget games and move away from smaller titles. Additionally, Kiryu aims to decrease the reliance on outsourcing for game development.
The next blockbuster game from Square Enix looks to be Final Fantasy 7 Rebirth, which is slated to launch in early 2024.
