Square Enix says it wants to double down on its existing IPs and upgrade them to AAA status instead of focusing on new IPs. This comes in light of the company’s market value plummeting last week, which equated to a loss of nearly $2 billion. Square Enix seemingly wants to play it safe going forward and try to bolster its pre-existing franchises rather than take daring risks on new ones that historically cost the company a lot.
Square Enix president Takashi Kiryu spoke during a Q&A session held in August (but recently published on the company’s investor relations website), speaking about focusing its efforts on already established IPs and franchises. Square Enix divides its digital entertainment business into three primary units: HD games, MMOs and games for smart devices or browser-based titles.
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Kiryu assured investors that Square Enix plans to boost profitability by looking at its HD games library and essentially upgrading existing IPs to AAA status, stating:
“I see ample room for improvement in our operating profit margin and would like to start by working primarily on our HD games. In addition, rather than solely attempting to create brand‐new IPs, we intend take a nuanced approach to investment whereby we also identify existing IPs with the potential to be upgraded to AAA status, taking ROI into account as well. In so doing, we hope to establish greater depth to the layers of our portfolio.”
Square Enix’s last brand-new IP, Forspoken, was considered a commercial failure as it also bombed with critics and fans, receiving mixed to average reviews. This led to developer Luminous Productions being absorbed into Square Enix and it’s unlikely that the company will take another expensive gamble on a new IP, at least not anytime soon.
Despite much higher review scores and generally great sales on PS5, Final Fantasy XVI also failed to meet Square Enix’s expectations.
Source: Video Games Chronicle
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