Square Enix Announces Financial Decline Despite ‘Tomb Raider’ and ‘Just Cause’ Sales

Despite the launch of new titles in the “Tomb Raider” and “Just Cause” franchises in 2018, Square Enix experienced declines across the board, according to the publisher’s latest financial results released on Wednesday.

“New titles such as “Shadow of the Tomb Raider” and ”Just Cause 4” bolstered sales YoY,” says Square Enix in slides from its financial results. “but profits declined YoY due to increased amortization of game development cost, advertising spending.”

The company announced that net sales for its digital entertainment sector actually rose year-on-year for the quarter running from October to December 2018. This was aided by the launch of “Just Cause 4” which was released at the start of December, and ongoing sales for “Shadow of the Tomb Raider,” which released in September, as well as a general boost in sales over Christmas.

As such, Net sales was hit the softest, with a 4.8 percent decline year-on-year. In 2018, Square Enix saw net sales of $1.63 billion for the nine months ending December 31, compared to the $1.71 billion achieved during the same period in 2017.

But operating income and ordinary income were impacted more heavily. Operating income was down a whopping 65.3 percent year-on-year to $106 million, while ordinary income fell 54.1 percent to $145.5 million.

And in its Digital Entertainment sector, Square Enix experienced another drop in net sales for the nine month period, falling from 9.1 percent to $1.19 billion, while operating income fell by 59.3 percent to $134.9 million.

“Many FY2018/3 titles underperformed, failing to add sales on top of established titles,” reads a statement from Square Enix. “Less licensing income, greater advertising spend also caused YoY sales and profit declines.”

The company now plans to focus on “selected titles and releasing titles utilizing existing IPs” as well as to rebuild its “development and operation organizations” and “strive to create new hit titles.”

The publisher says it expects net sales for the full financial year to be up by 7.8 percent over the previous year, reaching $2.46 billion. However, profits are expected to decline, with Square Enix forecasting $191.3 million, which is 18.7 percent down year-on-year.

Square Enix is also hoping to experience a boost from the release of “Kingdom Hearts 3” which has so far shipped five million copies across physical shipments and digital sales.

More Gaming

  • 'EVE Online' Developer Investigating Ban of

    'EVE Online' Developer Investigating Ban of Real-World Politician

    “EVE Online” developer CCP Games is investigating its own ban of a real-world politician from the massively multiplayer online role-playing game, it revealed in a statement on its website Wednesday. “Last week, on Apr. 8, 2019, we announced the permanent banning of Brisc Rubal and their ejection from the Council of Stellar Management,” CCP Games [...]

  • 'Cuphead': The Imperfections of a Perfect

    'Cuphead': The Imperfections of a Perfect Port

    “Cuphead” arrives on Nintendo Switch this week. By all accounts, it appears to be a near-perfect port. And that’s what worries me. Though absolute parity across every gaming platform does not technically exist, it sure feels like it does. And though much is gained by the relative ease of producing exact replicas of hit games [...]

  • Fortnite Battle Royale

    'Fortnite' Dominates Twitch Again as 'Apex Legends' Viewing Wanes

    “Fortnite” is back on top in Twitch viewership, yet Ninja didn’t hold the title of most watched streamer in the past few months, according to a report released Thursday from StreamElements. The State of the Stream report from StreamElements detailed the first quarter of 2019 in Twitch and YouTube video game streaming stats. “Fortnite” saw [...]

  • Fortnite Battle Royale

    'Fortnite' Season Eight, Week Eight Challenges Guide

    Season eight’s week-six challenges are live in “Fortnite,” and that means new ways to earn Battle Stars and experience. By collecting more Battle Stars and upping their tier, up to a season maximum of 100, players can earn limited-time rewards like cosmetic outfits and XP boosts. (Collecting 10 Battle Stars will unlock one additional tier.) [...]

  • 'The Walking Dead: The Telltale Definitive

    'The Walking Dead: The Telltale Definitive Series' Is Available For Pre-Order

    “The Walking Dead: The Telltale Definitive Series,” a comprehensive bundle featuring all four seasons of the narratively-driven zombie game, is now available to pre-order for Skybound Insiders on PlayStation 4, Xbox One, and PC, developer Skybound Games announced Thursday. Pre-orders will open for the rest of the public starting Friday and running until May 31. [...]

  • Konami Confirms Full 'Castlevania Anniversary Collection'

    'Castlevania Anniversary Collection' Lineup Includes These Eight Titles

    Konami revealed the final four games in the first “Castlevania Anniversary Collection,” which contains eight titles pulled from the popular series. The latest titles to be revealed include “Castlevania: The Adventure,” “Castlevania II: Simon’s Quest,” “Castlevania Bloodlines,” and “Kid Dracula.” The full collection contains eight titles, including “Castlevania,” “Castlevania II: Belmont’s Revenge,” “Castlevania III: Dracula’s [...]

  • Fortnite Battle Royale

    Epic Games Announces Community-Driven 'Fortnite' Creative World Cup

    “Fortnite” maker Epic Games has announced “Fortnite” World Cup – Creative, a new competitive event featuring trials built by community creators. “Fortnite” World Cup – Creative will be made up of five different Creative trials , with the top 15 participants facing off at the “Fortnite” World Cup Finals. Players have a chance at winning [...]

More From Our Brands

Access exclusive content