Today Square Enix published a transcript of its latest quarterly financial conference for investors and analysts, and it included a few interesting details about the publisher’s business.
First of all, we learn that Just Cause 4 sold fewer units than expected by Square Enix, leading to “disappointing” quarterly results. That being said, digital sales of Shadow of the Tomb Raider showcased a degree of growth during the Holidays. That being said, Lara Croft’s latest adventure shipped 4.12 million units as of the end of December 2018, and this is defined as a “weak start.”
Multiple among the mobile and browser games launched in the latest quarter also “got off to a lackluster start.”
While Kingdom Hearts III already shipped over 5 million units, Square Enix expects sales to grow further before the end of the fiscal year in March, as the game should be a significant contributor to the improvement in earnings in the quarter between January and March.
Interestingly, CEO Yosuke Matsuda teased “various” game announcements “in the leadup to this year’s E3” related to the fiscal year ending in March 2020.
Another intriguing detail is that Square Enix plans to “reorganize and consolidate” its eleven business divisions (which are the publisher’s development units) into four “in order to increase the efficiency of workflows, make more effective use of resources, and consolidate expertise with the aim of improving profitability.”
We also hear Matsuda-san’s explanation on why Just Cause 4 and Shadow of the Tomb Raider were affected by weak performance.
“We think the main reason is that we were unable to provide an experience that was novel enough that players would choose to buy them before any of the other numerous major titles on the competitive landscape. Also, while it is true that we are seeing a shift away from sales of boxes to digital downloads, with this many titles competing with one another, initial sales are definitely an important element in increasing user awareness. For that reason, we do need to engage in a certain amount of advertising just ahead of a new title’s launch.”
If you want to read more about Square Enix’s financial results, you can read our dedicated article from earlier this month.