The Japanese video game developer, Square Enix Holdings, has lost nearly $2 billion on the Tokyo Stock Exchange since the latest installment of the Final Fantasy video game received very negative reviews. At this time, doubts are flourishing for investors, reports Bloomberg, as they suspect that one of the most prominent careers in the video game industry is coming to an end, after almost 40 years in the market.
The Tokyo-based firm has had numerous failures when it comes to creating another series that can boost its sales. In recent years it has been in second place in terms of market value behind Camcom Co. and Activision Bizzard Inc. The company’s loss of value warns the rest of the companies in the industry about the importance of controlling quality and product planning.
During the last decade Square Enix multiplied its value by five thanks to the boost of the Final Fantasy video game. However, the last edition, put on sale in June, was a major failure, which worsened in August after the company published results showing a decline in profits. The shares have fallen almost 30% since the beginning of summer and seem to have a long way to go to recover their value. Last Wednesday its shares fell 0.69%, reaching their lowest level since May of last year. Since the Bloomberg consensus they have reduced the target price of the video game developer.
“Supplying the market with unfinished, bad or untested games is the wrong move,” said Tokyo-based developer Michael Prefontaine. Michael has included Marvel’s Avengers, Forspoken, and The DioField Chronicle as examples of games that have not been well accepted by the market. Bloomberg reports that current and former Square Enix employees blame the company for the approach they have decided to maintain so that each project is the fiefdom of a single producer.
On the other hand, they point to the producers as responsible for not managing adequate documentation and for the lack of a correct structuring of the team. Thus, the results they have obtained are very volatile. Some of the recent games the company has created have received very positive reviews, while others, such as Forspoken, have failed to find a good reception.
Takashi Kiryu, new CEO of the company
Takashi Kiryu, new CEO of the company since June, has assured that the main objective of Square Enix Holdings is to reduce the number of video games of less impact and reduce the outsourcing of production to focus on games with large budgets to improve as well as the company profitability.
Analysts, for their part, do not have high expectations regarding the company’s recovery. UBS Securities specialist, Kenji Fukuyama, points out that not even these new strategies will achieve a significant improvement in profits. Furthermore, he indicates that the company has been dormant for a long time and it will be difficult to reengage fans, since it seems that their patience has run out and they are tired of seeing video games adapted to mobile platforms.
“We are concerned about the structure of the company’s game development and quality control, which could limit its long-term performance,” Yijia Zhai, an analyst at Macquarie Capital Securities Japan, wrote in a letter to investors. customers, maintaining a superior performance rating in the company. “Square Enix has problems with its game production,” said Serkan Toto, a Tokyo-based technology industry consultant, who said many of the company’s games are “pretty conventional” and don’t aspire to become blockbusters. sales.
