Square Enix warns of "extraordinary" ¥12bn loss

Final Fantasy publisher Square Enix has issued a warning that tomorrow it will reveal losses in the region of ¥12 billion ($148m / £90.6m) for the full financial year.

That's a massive revision on the ¥1 billion profit it expected only last February.

The company blamed the cancellation of digital projects in development for approximately ¥4.5 billion of the loss, as it "tightened selection standards."

"Under a rapidly changing operating environment and more prudent estimates of future cash flows, the Company plans to write down goodwill (approximately ¥8.8 billion)," read the statement. "Further, as a result of introducing a tightened selection standard regarding title lineup to strengthen the revenue base of the Company's digital entertainment segment, project development cancellation and related losses (approximately ¥4.5 billion) are expected."

A further 0.6 billion was blamed on the recent earthquake and tsunami in Japan and the resulting closures and restoration of amusement facilities.

Sales are expected to only drop a small amount, from ¥130 billion to ¥125 billion. But the ¥12 billion loss is a huge drop for the 2011 fiscal year, compared to ¥9.5 billion profit recorded in 2010.