Yoichi Wada Admits How Far Below Expectations Square Enix Games Were - News

by William D'Angelo , posted on 09 April 2013 / 6,688 Views

Square Enix president Yoichi Wada who is leaving the company spoke in a financial briefing which was reported by Siliconera. He revealed how far below expectations sales were for its latest games.

Sleeping Dogs was expected to sell between 2 million and 2.5 million units, while the game ended up selling 1.75 million units. Hitman: Absolution was expected to sell between 4.5 million and 5 million units. However the game fell short selling 3.6 million units.

Despite having the best launch in franchise history, Tomb Raider, fell far below expectations. The game ended up selling 3.4 million units, while it was expected to sell between 5 million and 6 million units.

"Let’s talk about Sleeping Dogs: we were looking at selling roughly 2-2.5 million units in the EUR/NA market based on its game content, genre and Metacritic scores," said Wada. "In the same way, game quality and Metacritic scores led us to believe that Hitman had potential to sell 4.5-5 million units and 5~6 million units for Tomb Raider in EUR/NA and Japanese markets combined."

"Of course, we want to hedge risk in budgeting these units directly into the forecast, therefore we base the forecast on 80-90% of the total sales potential of each title," Wada added. "However, it is disappointing that our results fell below these marks."

Wada did admit that Square Enix's revenue model is outdated and the publisher's ability to sell games in North America and Europe are "far weaker than we ever imagined." Due to this the company is being hit hard and has canceled several games being developed in Japan. Square Enix also had to close its newly opened casual games division in the US.

Wada is stepping down as President due to the huge losses. Yosuke Matsuda will be the new president.

Square Enix is expected to lose 10 billion Yen ($101 million) due to the closures and lower than expected game sales. 1 billion Yen ($10 million) of those losses is due to the closure of the new US division. A loss of 3.5 billion Yen ($35 million) is due to the "Loss on Evaluation of Content." A 2 billion Yen ($20 million) loss is also expected to come from Japan, and a 1.5 billion Yen ($15 million) loss from North America and Europe. Also a loss of 2 billion Yen ($20 million) is expected to come from the restructuring.

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nnodley (on 09 April 2013)

That's their own damn fault for giving unrealistic expectations to these games.

NYANKS (on 09 April 2013)

They needed this to happen. Sometimes people only learn when they get hit where it hurts.

Sensei (on 09 April 2013)

Ok now give us a proper CONSOLE Final Fantasy please?

Boutros (on 09 April 2013)

Square Enix, you're stupid.

DarkFury (on 09 April 2013)

The real question is: how much did each of the games cost to make? Because if these are the numbers modern AAA needs to break even, then it is scary for the future.

Rogerioandrade (on 09 April 2013)

Look on the other side. They needed those games to sell that much in order to make some profit. The market is shrinking and there´s not room for so many AAA titles. Developers must review their development costs

outlawauron (on 10 April 2013)

Oh no. Surely VGC wouldn't fall into the same horribad reporting. -__- very disappointing.

outlawauron (on 10 April 2013)

For reference, the high number was the maximum sales potential they thought a title had and then used a formula to get the 1.75, 3.6, and 3.4 numbers which were their EXPECTED sales, not actual.

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Mazty (on 09 April 2013)

What idiot uses metacritic as a measurement? Online game reviewers haven't had any integrity for years and just want to brown nose their traffic who may have pre-ordered the game and publishers who may bar them from early access in the future.

Tigerlure (on 09 April 2013)

Lol who is running this company???

ktay95 (on 09 April 2013)

did you read the article?? it tells you

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Playstationfan12 (on 13 April 2013)

wow these guys have really high expectations. This is what can happen if you have high hopes for something.

Ljink96 (on 11 April 2013)

I've got a solution, Release Dragon Quest III on Wii U and 3DS as an HD remake!

NoirSon (on 10 April 2013)

So a major video game publisher was banking on Metacritic scores to be a accurate tool to determine how much their product might sell. Com' on Wada! Aside from Tomb Raider (which is still only 2 months old at this point or less) you released titles that were either original IPs or based on a franchise that hadn't seen a high profile release in years nor had that major of a push.

DietSoap (on 10 April 2013)

Have they not seen the sales of Tomb Raider games for the last, oh I don't know, decade? The IP simply doesn't sell 4 - 5 million, that is absolutely ridiculous, and neither do new IPs if you want to talk of the game's content unless they're HEAVILY HEAVILY marketed, hyped, and pushed 1st party games. They were basically expecting it to sell more than the best selling God of War ever created.

miqdadi (on 10 April 2013)

I just wonder how much the coast for these titles, Sales of Tomb Raider, are really good till now, & it revived the title again, but it won't make 6 M, it can be close to 5M in the long term, other titles didn't do bad also Sleeping dogs, 250 Thousand below 2M, & Hitman 900 thousand below 4.5 M, this can be covered in the long run, Just why are they losing so much money?, could it be the coast of these games where so high, I wonder

Rawnchie14 (on 09 April 2013)

Those are some outlandish expectations for Q1 video game sales.

zuvuyeay (on 09 April 2013)

ouch-do they dream about sales figures,

skullking (on 09 April 2013)

Guys, it IS wrong for them to over project like this, but at least in the case of tomb raider, I wouldn't see those numbers as that far off. The real problem here, is they are trying to tell themselves that they can sell 'end of the year' numbers in Spring. Tomb raider could probably have made enough if it came out in september of last year, but no, it was a spring release, which unless your title ends in 'Theft Auto #' you aint going to pull down those sales. Hitman is a 'known' property, but is it really popular enough to warrant those sales? And sleeping dogs, well, I'm sure it was expensive to acquire, but new properties from new studios should never have inflated sales figures. Even if it's a pretty great game. I think square needs to recoup there losses by going with some money makers that will earn them some good cash. A quick final fantasy 7 makeover with all next gen graphics & such, plus, put out another 'NON PORTABLE' console Kingdom hearts game! I mean shit, if Disney is down, they could add Marvel and Star wars into it. HOW DOES THAT NOT SELL!!???!!!

nnodley (on 09 April 2013)

That's their own damn fault for giving unrealistic expectations to these games.