Square Enix Revises Earnings Forecasts For Major Loss

[Jamel-Irief]

If SE can push out an expansion at that time with Ishgard, a few more regions, new jobs, chocobos and airships that will get people excited even more. I wouldn't be surprised if the PS3 version is released by Christmas.

I have the same feeling. I don't know anything, but it just seems like the dev team already has some content ready but are holding it back, just to release it all at once and say "Here, look at all this massive content - now go subscribe to our game!"

Not a negative thing at all. An expansion/major content patch with Ishgard, new races, chocobos or WHATEVER they have up their sleeve will make me go subscribe immediately.

[Seirra_Lanzce]

This thread is pointless. From a business point of view, SE is not dead nor the Project is dead. if it's dead, its already been AXE long time ago. Can't you see that?

[Nuru]

Its not too bad of a loss. They had to revise their Earning "Expectation" because they had to either cancel or take more time in development for other games that they had planned to release. This has nothing to do with FFXIV. They could be earning some money off of our subscriptions, but its almost as if FFXIV was a single player game, which we purchase once, and we keep it.

If they really needed the money, they'd have charged us since the end of our one month free trial. I'm sure they've learned that working on too many projects at once can only hurt them in the long run.

Also, I don't think this topic should be discussed here.

[Elkwood]

Well uneducated people once again are causing a pointless panic on the forums, so I will give you an accountants look at Square and thier recent finacial release. (12million yen loss.)

This problem is 4 fold on the forums atm:

Big Number Syndrom
Currency Conversion
Not knowing what the accounting terms even mean
People forgetting that gaming only makes up about 70% of squares yearly income.


Well I am gona break this down because atm people are panicing saying how the F2P status of FFXIV is costing them millions and what not, so I will give you an indept break down of what is going on in SE.

Currently SE has reported a 12,000,000 Yen Loss This is a wooping unrecoverable $148,800.00 loss.... yes less then 1/4th of a million dollar company which average 1.6billion in sales (USD) a year... AkA < 1/100th of a percent in total revenue...

To bring this into perspective think of your salary say you make $50,000 USD a year to put it into perspective you Spent $4.25 more then your total years salary.

Now that is bad, but considering SE has 106,000,000,000 (Yea this number is not a typo) Yen in cash or cash equivalents. That is $1,314,400,000.00 (USD) in spendable or quickly convertable cash. So if they do not improve square Enix will only last another 8,833 years before they are forced to declare bankruptcy.

Losses are caused by several factors.

Write down of Goodwill

goodwill is the amount a company pays in excess of another companys worth it is illegal to recognize internally generated GW.

Earth Quake Dmg (Square owns several theme parks)

Delayed and Canceled Projects which where expected to be sold before year end. (Squares Fiscal Year is not Dec it is March 31st)

Now I am going to go over the things above and the mass panic being spread on the forums.

1) Goodwill: This is fairly simple to figure out it is Purchase price - the bought companys net worth. The excess spent is goodwill. Meaning it is generated in the purchase of companys for more then their worth. Square has been absorbing company's left and right.

People are screaming the Falure of FFXIV and FFXIII has caused 8.8 billion in loss of Goodwill.... Well although I do not know what games/companys caused it (square did not disclose it), according to IGAAP, International generally accepted accounting principles (accounting law), It is illegal to recognize internally generated Goodwill, Final Fantasy has been a product of Square since day 1 (internally generated) so it was never bought or sold making FF Goodwill impossible.

2) People look at Square as a gaming company but they are much much more then that. They are an entertainment company, with the gaming department as a division of the company. Much like how Gaming is a segment of Microsoft. Sqaure is reporting extrodiany dmg to many of thier theme parks, and building damaged by the earth quake and tsunami. Also with the Play Station network down they have estimated a loss on sales from the PSN. This also included the month of lost revenue of XI which with the current sub count is about 2 fold the lost when converting to USD.

Extraordinary loss is a loss that is not occurred in normal operations, it has to be both infrequent and unusual in nature, and not in control on management.

3) Delayed and canceled project. A big one come into mind, Dues Ex (sp?) this is a major title which was postponed again to further refine the game this pushed it out of this fiscal year for square. Meaning they lost that estimated revenue. Which previously was estimated at around 2million units (64million dollars USD). They also delayed the release of 3 other online games, 2 PSP games.

The People screaming the loss in profit from XIV are forgetting that was taken into account before Christmas in the first reduction and was not included again.

Yea the total backrupting FFXIII the game that sold 6.7million copys and made square ~200 billion yen profit.

**Credit for this post belongs to Xatsh Vei as he is an accountant and posted this on our LS forums

[Dega]

Well uneducated people once again are causing a pointless panic on the forums, so I will give you an accountants look at Square and thier recent finacial release. (12million yen loss.)

This problem is 4 fold on the forums atm:

Big Number Syndrom
Currency Conversion
Not knowing what the accounting terms even mean
People forgetting that gaming only makes up about 70% of squares yearly income.


Well I am gona break this down because atm people are panicing saying how the F2P status of FFXIV is costing them millions and what not, so I will give you an indept break down of what is going on in SE.

Currently SE has reported a 12,000,000 Yen Loss This is a wooping unrecoverable $148,800.00 loss.... yes less then 1/4th of a million dollar company which average 1.6billion in sales (USD) a year... AkA < 1/100th of a percent in total revenue...

Elkwood..

12,000 million yen not 12 million yen so the loss is 148million not 148 thousand. So much for all that stuff you just said..

[Elkwood]

Elkwood..

12,000 million yen not 12 million yen so the loss is 148million not 148 thousand. So much for all that stuff you just said..

No the math is right that's 12,000,000 yen when you convert it

[SuzakuCMX]

Elkwood..

12,000 million yen not 12 million yen so the loss is 148million not 148 thousand. So much for all that stuff you just said..

Twelve-thousand million. Really?

Not even sure if that is 1 million x 12 thousand or one million + 12,000 in front of it? Gonna assume the first.

12,000,000,000? 12 billion yen?

[Dega]

Yep.

"Square Enix announced revised earnings expectations today. The company says that it will incur a net loss of 12,000 million yen"

[SuzakuCMX]

Yep.

"Square Enix announced revised earnings expectations today. The company says that it will incur a net loss of 12,000 million yen"

Still not sure what it is D:

[Elkwood]

Yea Im getting 120 million as well so im trying to get Xatsh to explain it since this is way beyond me