After having posted the worst losses in its history and sacking its CEO, Square Enix has announced its new focus will be social games.
Its final balance sheet for the last fiscal year showed an operating loss of 6 billion yen – the first time since the merger with Enix that the company has posted an operating loss – and total losses stood at 13.7 billion yen, the worst result in its history.
Most of these losses stemmed from writing off all the games it has cancelled over the last year.
Square Enix maintains its problems had nothing to do with it – according to group manager Michihiro Sasaki’s statements at a recent press conference, the massive slump in its revenues was because of “intense environmental change,” and its concentration on console and arcade games slowed its progress in the field of social and online gaming, damaging the company’s performance, whilst North American video game sales were “stagnant.”
He emphasised that for the next financial year “the driver will be social games,” and that the company is expecting to return to profitability by focusing on social gaming, forecasting profits of 3.5-6 billion yen next year.
Markets have actually responded favourably to the news, although the company’s shares still trade at rock-bottom lows: