Square Enix slashes forecasts as game divisions underperform

Japanese publisher Square Enix has cut its profit forecast for the full year by over 40 per cent and dropped its revenue forecast by eight per cent, citing missed targets in its online, offline and mobile game divisions as the cause.

Only the company's media divisions - encompassing the print publishing division responsible for the hugely successful Fullmetal Alchemist manga and the movie division which created Final Fantasy VII: Advent Children - will hit their targets for the year.

The company's net income figure has been slashed from 17.5 billion Yen (121 million Euro) to 10 billion Yen (69 million Euro), in the face of overall revenues falling from 136 billion Yen (941 million Euro) to 125 billion Yen (865 million Euro).

The failure of the offline games division to hit its targets is particularly surprising, given that both Kingdom Hearts II and Final Fantasy XII have performed exceptionally strongly for the company, but may have been affected by the delays to the release of those titles.

However, in the online game sector, Square Enix has seen disappointing performance for new titles in the marketplace, and has so far failed to emulate the success of Final Fantasy XI - a game which, the company says, continues to perform steadily.

Adding to the company's problems, the mobile division - which, along with the online division, has been targeted as a key growth area by Square Enix - also failed to hit its targets, as did recently acquired Japanese publisher Taito.

What this means for the company in terms of its planning remains unclear, as for now it has announced nothing more than a change to its financial forecasts. Any policy changes are unlikely to become known until the figures are officially announced in the coming months.