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Two Major Game Companies Report Million Dollar Losses Due to Mobile Gaming Decline

Diablo: Immortal for who? Mobile gaming was once the king of easy money. Everyone played them and everyone gave into the hundreds of thousands of in-game purchases available.

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Well, it seems that the days of mobile gaming could be coming to an end as two of the world’s biggest gaming companies are reporting massive losses due to the decline of mobile gaming. Today SEGA announced (PDF) an “extraordinary loss” of $55 million for this financial year.

A major contributor to this loss was due to the decline of mobile games as well as the “intensifying competition” in the market. SEGA reports that many mainstay titles have slowed down as competition in the Japanese mobile game market intensified. Mobile games are also underperforming in general which has been a massive contributor to the losses.

SEGA is not the only company facing huge losses. Square Enix announced that their development costs and underperforming mobile games delivered much lower results across the board between April and December last year. Income has been decreasing considerably even with sales increasing.

Shadow of the Tomb Raider, Just Cause 4 and Octopath Traveller hit record sales numbers but only due to “greater amortization of development costs for major new titles and increased advertising expenses”.

So while those console games are doing well, the cost of developing them has increased which is becoming a challenge for Square Enix. The company also revealed that smart devices (mobile) and web-based games launched in the past year performed below expectations. Square Enix intends to fix this by focusing its efforts on developing new hit titles and games based on existing IPs.

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