Square Enix president bemoans weak Final Fantasy sales and says his restructure is existential: 'Our winning formula is no longer effective'

pcgamer.com:

The relatively new Square Enix president Takashi Kiryu has been making some big decisions in reviewing the company's development process "from scratch". The reasoning behind such moves is now becoming clearer thanks to Square Enix's financial results, with the company warning investors earlier this month they could expect to see heavy losses, alongside which it announced the cancellation of various projects with a sunk development cost of around $140 million, and layoffs across Europe and the US.

Square Enix says it expects operating income of ¥40 billion in this financial year, against an expectation of ¥57 billion. Its sales and dividend outlook were also down. Since the announcement of these results and the ongoing restructuring, Square Enix's shares have suffered badly, with Bloomberg reporting that the fall of 16% is «their biggest decline in 13 years» (and bear in mind, the Japanese stock market has a daily limit on how far a stock can fall).

Kiryu told shareholders and analysts that the company had failed to meet its expectations because of low sales of Final Fantasy VII Rebirth, Final Fantasy XVI and Foamstars. Notably these games are all PlayStation 5 exclusives—the last estimate Square Enix gave for FF16 placed it at three million sales, with no further update here beyond Kiryu saying initial sales were good before tailing off.

Foamstars also fell short of expectations, though I'm not sure why Square Enix ever thought a B-tier Splatoon would set the world alight. Reading between the lines, however, what has really set the cat among the pigeons at Square Enix HQ is FF7 Rebirth. The second instalment of a trilogy remaking perhaps the company's most beloved RPG, Kiryu said only that sales were short of expectations and their internal targets.

What he didn't share were any sales numbers whatsoever. This game's been out for three months, it's the type of game that depends on that launch period for most of its sales, it's a major entry in the company's flagship