In a May 2024 financial report made public today (via Eurogamer), Square Enix president Takashi Kiryu said that Final Fantasy 7 Rebirth and Final Fantasy 16 haven't sold as many copies as the company had hoped. "We released multiple new titles, including major titles such as 'Final Fantasy 16' and 'Final Fantasy 7 Rebirth,' but profits unfortunately did not meet our expectations," Kiryu said.
The financial results were originally shared on May 13, 2024, months before yesterday's PC release of Final Fantasy 16—which, it's safe to assume, will give that particular sales metric a bump. A PC release for Final Fantasy 7 Rebirth, meanwhile, still hasn't been officially confirmed. Kiryu also noted that MMO profits were down, but attributed that to "a lull in releases ahead of the launch of the 'Final Fantasy 14: Dawntrail' expansion pack," which was released the following month in June.
Reporting had already appeared about Square Enix's falling profits after the financial results were delivered to investors in May, but today's publishing of the financial report means we can see the details of Kiryu's statements firsthand.
Throughout the financial report, Kiryu attributed decreased profitability of its games releases to strategic failings at Square Enix. Essentially, Square Enix's publishing strategy has forced its new releases to compete for sales with its own games. "We did not manage our title portfolio across the company as well as we could have," Kiryu said, "which I believe resulted in opportunity losses due to cannibalization between our own titles."
Between a three-part Final Fantasy 7 remake, continued Final Fantasy 14 expansions, and Final Fantasy 16, there's definitely a lot of big-budget Final Fantasy competing for attention, and those have to compete with all the other RPGs Square Enix is regularly publishing, like Visions of Mana and remasters like the upcoming Dragon Quest HD-2D remakes. It's not a bad thing for us when we've got so many Square Enix RPGs to choose from, but it's only good for Square Enix's bottom line if its customers are buying everything in the catalogue.
The report also included Square Enix's "new multiplatform business strategy," which we covered when it was publicized back in May. That plan, which includes "initiatives designed to win over PC users," also entails downsizing its studio portfolio and workforce. Following its sale of Crystal Dynamics and Eidos Montreal to Embracer in 2022, the May 2024 business strategy reveal came alongside layoffs at US and EU Square Enix offices, contributing to the brutal job losses still sweeping the games industry.
Square Enix is also undergoing internal restructuring in Japan, Kiryu said, in an attempt to counteract what he described as the "siloization" of the company's development teams. "A reorganization came into effect on April 1, 2024 that creates a flat structure aimed at increasing opportunities to discover untapped talent from within the existing employee pool and at promoting greater dialogue within development and publishing functions, Kiryu said. Later, in a closing Q&A section, he offered more details about that reorganization, saying studios will no longer "pursue their development efforts completely independently of one another. Instead, we have established a regular forum for the heads of the individual studios and myself as president to discuss the titles that we plan to produce, the status of ongoing projects, human resource allocation, and other topics."
