Square Enix Financial statement: DT 42m USD DOWN

Financial statement here:

https://www.hd.square-enix.com/eng/i...4q4outline.pdf

“FINAL FANTASY XIV: Dawntrail” marked the start
of a new scenario for the sub-segment and that that is our first post-pandemic expansion pack release, we will need to monitor
trends there closely, but we expect to see a stable trend in the sub-segment’s profits.

the mogstation team needs to step up their game

FFXIV continues to be Square's only consistent source of profit, resources will continue to be drained to projects so garbage their engine won't start, let alone get off the ground. In other news, grass green, sky blue, nothing ever changes, please get this game off my computer. I'll take Blizzard back at this point, please god I beg you give me an MMO dev who cares about their game.

wo00mp wo00mp

I don't understand what they're doing. FFXIV is their golden goose and seemingly has been for a long time. I would expect them to be trying to make it the shiniest, most successful game they can in order to rake in the biggest profits they can. Instead, this golden goose is slowly being starved while resources are put into failed projects, NFTs and other stupid stuff. Why? What am I missing?

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Originally Posted by PercibelTheren

I don't understand what they're doing. FFXIV is their golden goose and seemingly has been for a long time. I would expect them to be trying to make it the shiniest, most successful game they can in order to rake in the biggest profits they can. Instead, this golden goose is slowly being starved while resources are put into failed projects, NFTs and other stupid stuff. Why? What am I missing?

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Best I can figure is that think it's worth the risk. They are weakening the goose but potentially fattening the calf. The idea being that XIV has a dedicated base so they can afford to pull some Legos out from that tower to put into another one.

The problem is, this worked at first. Shadowbringers was still a success and personal feelings aside, so was Endwalker. So they kept pulling more food out of the gooses box and giving it to the calf. Now the gooses getting thin and the calf is dying because they gave it bird feed.

I think my analogy got away from me.

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Originally Posted by Palladiamors

Best I can figure is that think it's worth the risk. They are weakening the goose but potentially fattening the calf. The idea being that XIV has a dedicated base so they can afford to pull some Legos out from that tower to put into another one.

The problem is, this worked at first. Shadowbringers was still a success and personal feelings aside, so was Endwalker. So they kept pulling more food out of the gooses box and giving it to the calf. Now the gooses getting thin and the calf is dying because they gave it bird feed.

I think my analogy got away from me.

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Probably more like:

They take food away from the goose to fatten the calf, but unfortunately some idiot farmhand ran over the calf in the tractor. Instead of firing the farmhand, though, they just keep buying new calves, which keep getting run over. We're now on calf #10 and the goose is severely malnourished.

I just finished the msq and the raid series. My language is set to Japanese. Game is as great as ever.

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Originally Posted by SimplicityG

I just finished the msq and the raid series. My language is set to Japanese. Game is as great as ever.

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Let's not pretend the complaints about DT boil down to just voice acting. Hell, I thought the voice over was fine and I still thought the MSQ was an absolute garbage fire.

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Originally Posted by PercibelTheren

I don't understand what they're doing. FFXIV is their golden goose and seemingly has been for a long time. I would expect them to be trying to make it the shiniest, most successful game they can in order to rake in the biggest profits they can. Instead, this golden goose is slowly being starved while resources are put into failed projects, NFTs and other stupid stuff. Why? What am I missing?

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I worked at another game company that did this pre-pandemic. Our CEO went as hard as he could with blockchain projects despite having 0 longterm plans for profitability utilizing them. We suspect he planned on getting dudebros onboard to invest because "blockchain bro" and "crypto bro" and trying to figure out monetization later. We had multiple very successful mobile games which were each pulling in over $1m revenue daily and all that money was being dumped into failed crypto projects. To keep the projects going, he pretty much demanded players be milked for every last cent they had, causing them to eventually all quit within a few short months. The stupid blockchain stuff didn't stop until he was finally ousted by the board, but by then the damage had been done.

As far as Square goes, my guess is that they have some people in management that initially directed the company towards NFTs and other stupid projects and are so heavily invested in them, they refuse to change course because it would be their heads/jobs on the chopping block. So they'd rather run the ship onto the reefs, get canned and (probably) get some sort of golden parachute.

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Originally Posted by SimplicityG

I just finished the msq and the raid series. My language is set to Japanese. Game is as great as ever.

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money speaks louder than words

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Originally Posted by BabyYoda

money speaks louder than words

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Sad but true. Though to be fair, I think most (if not all) companies/corporation's preferred method of communication is Credit Card.

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Originally Posted by PercibelTheren

What am I missing?

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You're missing that modern corporations love shiny trends and hate money.

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Originally Posted by NegativeS

I'll take Blizzard back at this point, please god I beg you give me an MMO dev who cares about their game.

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Can't do that, apparently developing MMOs comes with a propensity of shooting oneself in the foot. :(

To be fair, it's older data prior to DT release though. Still, it's nice to see a segment breakdown, they are kinda skimping on it in many versions of the statements.

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Originally Posted by PercibelTheren

I don't understand what they're doing. FFXIV is their golden goose and seemingly has been for a long time. I would expect them to be trying to make it the shiniest, most successful game they can in order to rake in the biggest profits they can. Instead, this golden goose is slowly being starved while resources are put into failed projects, NFTs and other stupid stuff. Why? What am I missing?

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I think there is an element that people often not consider and that's hubris.

FF14 is old money now, and no matter how successful it is, it's not the baby or brain child of the leadership any more. Every time a new leadership come in, they all desperate want to put their own mark, their own stamp, their own project on the legacy. And a lot of time this means swept aside anything that was before them, regardless of how much sense it would make. And you see this happen pretty much everywhere.

If you compare this to say ... Hoyoverse. The games are basically the CEOs (they have co CEO) brain child, so they all lock in and push hard. Genshin and Honka's event you have the CEOs and leadership team get on stage to address the fan themselves. Comparing to that ... when was the last time you see anyone from SE's leadership team beside a tired Yoshi dress up for the event. And tbh, I think even Yoshi himself probably not interest in the game any more. He's getting a point where I feel he wants his own legacy now. FF14 is a game that he saved, but he wasn't the one conceived it, wouldn't suprise if deep down he wants to work on a new MMO that he personally create.


What we see with FF14 is when a child, despite being very successful, is not the parent's favorite.

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Originally Posted by Raven2014

I think there is an element that people often not consider and that's hubris.

FF14 is old money now, and no matter how successful it is, it's not the baby or brain child of the leadership any more. Every time a new leadership come in, they all desperate want to put their own mark, their own stamp, their own project on the legacy. And a lot of time this means swept aside anything that was before them, regardless of how much sense it would make. And you see this happen pretty much everywhere.

If you compare this to say ... Hoyoverse. The games are basically the CEOs (they have co CEO) brain child, so they all lock in and push hard. Genshin and Honka's event you have the CEOs and leadership team get on stage to address the fan themselves. Comparing to that ... when was the last time you see anyone from SE's leadership team beside a tired Yoshi dress up for the event. And tbh, I think even Yoshi himself probably not interest in the game any more. He's getting a point where I feel he wants his own legacy now. FF14 is a game that he saved, but he wasn't the one conceived it, wouldn't suprise if deep down he wants to work on a new MMO that he personally create.


What we see with FF14 is when a child, despite being very successful, is not the parent's favorite.

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FFXIV to SE is like Wuk lamat to WoL.. never liked by their parents

This is for the year ending March 2024. DT wasn't even released yet.

Incoming mog shop items to counterbalance lol

It doesnt account for DT. It accounts for the lull period before DT. Basically it shows Endwalker's post game failures which DT aims to not repeat. Ultimately this year will be a success for them due to DT. Its the financial statement after next that we want to see because that will determine how good DT was.

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Originally Posted by Derio

It doesnt account for DT. It accounts for the lull period before DT. Basically it shows Endwalker's post game failures which DT aims to not repeat. Ultimately this year will be a success for them due to DT. Its the financial statement after next that we want to see because that will determine how good DT was.

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Loss of revenue during content lulls is common for all expansions, even popular ones. I think I reviewed the financials in the past and XIV made more $$$ during the EW years than any expansion prior.

As others have said, the financial statement posted by OP showing that SE’s MMO income is down covers April 2023 - March 2024 and so has nothing to do with DT. The quote mentioning DT just says that SE is expecting DT to create a “stable trend” (read: reverse the decrease) in profits.

In fact, SE’s latest quarterly financial report covering April - June 2024 reports their MMO segment posted a ¥1.5b/US $10.5m increase in sales and ¥2.2b/US $15.4m increase in profits. Presumably from DT preorders and returners resubbing in anticipation of the new expansion.

Source:
https://www.hd.square-enix.com/eng/i...25q1slides.pdf

https://www.pcgamer.com/games/mmo/fi...ix-profitable/

The key financial reports to look at will be the next ones: July - September 2024 to see how well DT launch actually went, and October - December 2024 moving forward to see how sustained those sales and profits are.

Sadly, the even bigger question is how is SE spending all those profits? I would hope back into FFXIV or towards development of their next big MMO. I’m no businessman, but I would think (re)investing into what you’re good at and makes you the most profits would be a no brainer decision. But nobody really knows outside of SE.

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Originally Posted by PercibelTheren

I don't understand what they're doing. FFXIV is their golden goose and seemingly has been for a long time. I would expect them to be trying to make it the shiniest, most successful game they can in order to rake in the biggest profits they can. Instead, this golden goose is slowly being starved while resources are put into failed projects, NFTs and other stupid stuff. Why? What am I missing?

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They are moving on from this game and planning to gut it for profits. It's really obvious.

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Originally Posted by Uncle_Jafar

They are moving on from this game and planning to gut it for profits. It's really obvious.

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No, they're seriously not. With the new server infrastructure upgrade and the graphic engine upgrade they did for DT, the obvious thing is they do want to commit for another 10 years. The last time you see something like this happen in WoW was when they decided to can WoW 2 and stay with original WoW.


What most of us are discussing isn't about SE is abandoning FF14 because they're not doing that. We're frustrated at the fact that instead of using the profit to take the game to the next level, they seems to happy to just do enough to maintain the status quo, which is a problem because after 10 years it does feel the game is reaching a stagnant point if it doesn't have a major breakout soon.

Honestly thats one of the biggest problems for MMOs, WoW would be so much approachable if they just restarted the game with a WoW 2 or a WoW ARR honestly the snapshotting and 2013 awkwardness in the game is getting more noticable day by day, I hope a new FFMMO will happen eventually.

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Originally Posted by Raven2014

No, they're seriously not. With the new server infrastructure upgrade and the graphic engine upgrade they did for DT, the obvious thing is they do want to commit for another 10 years. The last time you see something like this happen in WoW was when they decided to can WoW 2 and stay with original WoW.

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While I agree it does not look to me like SE is moving on at all, it wouldn't be the first time I've seen an MMO get a bit of a graphics overhaul and whatnot only to find out not long after that it all really was done to milk the very last drop of money and good will out of a very loyal customer base. That game in particular was plagued by monetary mismanagement from the get-go, though, and never was able to make much money; FFXIV is not the kind of game that can be torched to the ground like that. If SE does do that to FFXIV, it will be self-destructive to an absurd degree. The suits at SE would get better PR setting their own office on fire while running out of the burning building holding bags of yen.

So, yeah, they're not doing that. They are very possibly not giving FFXIV as much love as it should, and very probably got some dumb ideas about what to finance next, but there is no way they're planning to torch it for insurance money.

Trying to read the document... Three main paragraphs talk about game sales

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The HD Games sub-segment booked net sales of ¥99.2
billion (up ¥20.7 billion YoY) and an operating loss of ¥8.1
billion (loss widened ¥4 billion YoY). Despite the release of
“FOAMSTARS” and “FINAL FANTASY VII REBIRTH” in Q4,
initial sales were not as strong as expected, in addition to
which an impairment was made to the content production
account, resulting in the operating loss.

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The MMO sub-segment booked net sales of ¥47.3 billion
(down ¥6.0 billion YoY) and operating income of ¥19.3 billion
(down ¥9.8 billion) amid a lull in releases ahead of the launch
of the “FINAL FANTASY XIV: Dawntrail” expansion pack

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The Games for Smart Devices/PC Browser sub-segment
posted net sales of ¥101.5 billion (down ¥12.1 billion YoY)
and operating income of ¥14.2 billion (down ¥2.0 billion).
Although multiple new titles were released in FY2024/3, they
were unable to offset the decline in earnings from existing
titles that have aged.
The Digital Entertainment segment sold 26.32 million units
(up 3.88 million YoY). The increase in downloads across all
regions was especially good news, and we will continue
our efforts to strengthen digital sales of both new and
catalog titles

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Everything is earning them less, and sales are down quite a bit.

And they aren't working on releasing any big sellers and some of the few they have coming are being hit with censorship which is kind of a turnoff...

I stopped once I saw it was dated May 13th.

Good job baiting people.

All I'm saying is: If FF XVI didn't exist, we ALL know this expansion would've been better. If they continue on this trend, then it's not hard to see the beginning of the end here.

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Originally Posted by SimplicityG

I just finished the msq and the raid series. My language is set to Japanese. Game is as great as ever.

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Sure play msq in english, and like the other comment said. If this is your answer u missed the entire point of DT complaints are pretending to ignore thus you fall into group who are helping the games destruction.

To name some of issues: story / pacing / jobs / raid tunning / pictomancer / mch / bugs / DDos / graphic overhaul / broken models / pvp busted ps4 / etc. Im sure we can compile more but honestly thats just naming a few issues. 7.0 has been a mess.

ARCADIAN IS FUN THO, MUSIC IS GREAT, DIFFICULTY IS AMAZING

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Originally Posted by Zakuyia

Sure play msq in english, and like the other comment said. If this is your answer u missed the entire point of DT complaints are pretending to ignore thus you fall into group who are helping the games destruction.

To name some of issues: story / pacing / jobs / raid tunning / pictomancer / mch / bugs / DDos / graphic overhaul / broken models / pvp busted ps4 / etc. Im sure we can compile more but honestly thats just naming a few issues. 7.0 has been a mess.

ARCADIAN IS FUN THO, MUSIC IS GREAT, DIFFICULTY IS AMAZING

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All the side content in DT so far has been much better than the MSQ... As much as complaining about wuk seems overboard, she is just a terrible character all around... Yaana in her 5 minutes of screentime in the Arcadion storyline has shown more emotion and given more reason to care about her than wuk did in like 10 hours of MSQ...

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Originally Posted by CaptainLagbeard

All the side content in DT so far has been much better than the MSQ... As much as complaining about wuk seems overboard, she is just a terrible character all around... Yaana in her 5 minutes of screentime in the Arcadion storyline has shown more emotion and given more reason to care about her than wuk did in like 10 hours of MSQ...

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Yeah prolly main reason Im staying on DT, the side content is looking decent and hefty, as it stands; usual Raids, 24m, Ults, Relic(mentioned falling back to a HW esque grind), Shade's Triangle, Cosmic Exploration, Variant/Criterion, and recently mentioned 24m Savage. Gotta see if they do rewards proper, but yeah its mosly side content im looking to this time around...

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Originally Posted by Jojoya

I stopped once I saw it was dated May 13th.

Good job baiting people.

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Yeah they almost got me.

While the financial report IS From march 2024, it doesn't change the fact that Square is currently fucking themselves over recently. You might go "FF16 and FF7 remake did great!" but then you see Square president himself said FF16 and FF7 remake part 2 were below expectations.

One such article here: https://www.gamesradar.com/games/fin...ctations-line/

You also have to remember Square threw a bunch of games in the garbage months ago, along with having lots of live service stuff games die barely a year or two after making and releasing them. Remember FOAMSTARS? I bet you didn't even know that game existed. A Splatoon rip-off 4 v 4 shooter that is heavily monetized that Square Enix released 8 months ago is already being brought down from 30 bucks to free-to-play because it flopped that badly.

Square of course does have some big-ish hitters on the horizon in the future: Dragon Quest 12 is being made, Kingdom Hearts 4 is going to rake them in millions, FF7 Remake part 3 is obviously being worked on, and probably FF17 also most likely being discussed. But the here and now is they are NOT doing that good and they know it.

And it's probably safe to assume FF14 is absolutely nowhere on Square's radar of things to put a ton of money back into probably because they know that some fans are hardcore enough to where they WILL keep paying and playing no matter what. They also probably just don't have any money to spare to anything else since they keep wasting it on dumb shit that they really shouldn't like more live service flops and blockchains and NFTs.

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Originally Posted by ZXN

While the financial report IS From march 2024, it doesn't change the fact that Square is currently fucking themselves over recently. You might go "FF16 and FF7 remake did great!" but then you see Square president himself said FF16 and FF7 remake part 2 were below expectations.

One such article here: https://www.gamesradar.com/games/fin...ctations-line/

You also have to remember Square threw a bunch of games in the garbage months ago, along with having lots of live service stuff games die barely a year or two after making and releasing them. Remember FOAMSTARS? I bet you didn't even know that game existed. A Splatoon rip-off 4 v 4 shooter that is heavily monetized that Square Enix released 8 months ago is already being brought down from 30 bucks to free-to-play because it flopped that badly.

Square of course does have some big-ish hitters on the horizon in the future: Dragon Quest 12 is being made, Kingdom Hearts 4 is going to rake them in millions, FF7 Remake part 3 is obviously being worked on, and probably FF17 also most likely being discussed. But the here and now is they are NOT doing that good and they know it.

And it's probably safe to assume FF14 is absolutely nowhere on Square's radar of things to put a ton of money back into probably because they know that some fans are hardcore enough to where they WILL keep paying and playing no matter what. They also probably just don't have any money to spare to anything else since they keep wasting it on dumb shit that they really shouldn't like more live service flops and blockchains and NFTs.

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Rebirth was never going to do well and whatever they call the third game will do even worse. Just look back at how sequels to main games have always sold. Yes, I'm aware that Rebirth isn't a sequel, but it's seen as and being treated as one.

Also I have zero sympathy for Squenix. They had the entire corner of the JRPG market then they decided to squander it. One non-MMO Dragon Quest game in sixteen years and they decided to make mainline Final Fantasy into a crappy Devil May Cry clone with terrible writing. If I wanted to play an action game I would, I love Devil May Cry and enjoy similar games. All they did was ruin a perfectly good series in pursuit of the wider audience.

You then have bad taste in writing.
More power to you I guess.

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Originally Posted by NegativeS

Probably more like:

They take food away from the goose to fatten the calf, but unfortunately some idiot farmhand ran over the calf in the tractor. Instead of firing the farmhand, though, they just keep buying new calves, which keep getting run over. We're now on calf #10 and the goose is severely malnourished.

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Difficult to fire the farmhand when they are in top manager positions unfortunately. The problem here is never the dev worker on the ground, the problem is always a management problem.

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Originally Posted by Raven2014

What we see with FF14 is when a child, despite being very successful, is not the parent's favorite.

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Tbf that is every Final Fantasy not numbered VII.

You can clearly see what game is the favorite of SE. FF14 always gave me the feeling of being successful DESPITE SE indifference towards it.

I agree with most of your points. Another one though:
It’s pretty natural to not bet everything on one product because if that breaks away chaos ensures.

To me it seems SE is desperately trying to make a new successful IP for a while now to have a solid second leg to stand on and they throw everything they have at achieving that goal.
If 16 had been successful it probably would have been milked to starvation.

FF14 sells anyway so why should they do more than necessary?
Even “all the new content” is not here yet (and who knows how good it will be or if it will just be copied assets like Eureka Orthos was).
The expansion itself is as barebones as any other if you are not a raider or someone who levels all jobs.

And later on with Wicked thunder with the little context they give you and this being but intensified on her savage fight with the mirrors at the sides with literally 3 pictures that rotate but give you so much more.

Simple a demostration of show, don't tell, and i love it they showing they can do so much with so little

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Originally Posted by ZXN

And it's probably safe to assume FF14 is absolutely nowhere on Square's radar of things to put a ton of money back into probably because they know that some fans are hardcore enough to where they WILL keep paying and playing no matter what.

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Correct

https://i.imgur.com/Jt0UCwD.png