The Japanese company has canceled several of its development projects, which has had a financial impact on Square Enix’s bottom line, and as a result the publisher is being more selective about what it develops and careful about what it spends its development budget on.

In a statement, Square Enix announced that Square Enix Holdings Co., Ltd. expects to record extraordinary losses related to abandonment losses associated with its content production account on its books for the fiscal year ending March 2024. At the meeting convened on March 27, 2024, the Board of Directors of Square Enix decided to revise the Group’s approach to the development of high-definition (HD) games in light of the myriad changes in the environment surrounding the Group, with the intention of being more selective and focused in the allocation of development resources.

As a result of a close examination of the Group’s development pipeline in line with this revised approach, the Company expects to record a loss on content abandonment of approximately ¥22.1 billion (~$140 million) in its books for the fiscal year ending March 2024. Square Enix is carefully reviewing its consolidated forecasts for the fiscal year ending March 2024 to assess the potential impact of the above or other factors. If it becomes necessary to revise its forecasts, the company will announce such revisions promptly.

So what happened was that there were projects that were for consoles, PC (which is what the HD category covers), and they stopped them after they were all finished. The Japanese company wants to publish fewer but better quality games, which is understandable, but it would not be logical for them to concentrate only on the bigger IPs (Final Fantasy, Dragon Quest, Star Ocean…), because they have more than that.

They could be focusing on older IPs that are not being used today, but it is also possible that this is what the losses are related to. But there are also ActRaider, Chrono, Front Mission, Just Cause, Kane & Lynch IPs that the company hasn’t touched much (Left Alive in the case of Front Mission can’t be considered as such…). We’ll see what they do.

Source: Gematsu, Square Enix