Summary
- Final Fantasy 16 sold over 3 million units in its first week, exceeding most game sales, but isn't yet as profitable as some expected due development cost expensing.
- Square Enix believes the game and PS5 have performed well, but hinted at increased support for Xbox platforms in the future.
- Square Enix's stock price dropped in Japan due to lower operating profit, as the cost of developing Final Fantasy 16 have been expensed entirely in the company's first quarter. Profits from the game expected to solely rise from here on out.
Final Fantasy 16 and Square Enix's method of handling of the game's development costs have impacted the company's operating profits, according to President Takashi Kiryu. That isn't to say that Final Fantasy 16 didn't sell well, however. Kiryu was simply being direct regarding a complicated financial situation at Square Enix as part of a recent earnings report. Nevertheless, the comment has prompted a conversation regarding the cost of developing major games in franchises like Final Fantasy and what's best for developers' futures.
The release date of Final Fantasy 16 was on June 22, so financial reporting regarding the action game's sales is coming just over a month after launch. That's a relatively short amount of time but still offers a look at the game's long-term success. Exact sales numbers for Square Enix are not available, but the company did confirm that Final Fantasy 16 sold over 3 million units in the game's first week of release.
In the most recent Square Enix earnings report Takashi Kiryu was forced to explain why the company's operating profit dropped 79%, from ¥14.4 billion to just ¥3.0 billion. The answer is that Square Enix expensed the full cost of Final Fantasy 16's development in its first financial quarter. All future sales are expected to be profits, but in the meantime, the development costs of the game have had an impact on the company's numbers.
Square Enix considers the sales of Final Fantasy 16 to still be within reasonable expectations, regardless. While the company had a positive response to PS5 sales thus far, Square Enix hinted at future increased support for Xbox platforms this past week. Any potential future ports to other consoles or the PC will likely help to further increase the company's profits.
It's difficult to make any assumptions about the situation. Final Fantasy 16 is undeniably a success. But it was also a very expensive game to make, and is exclusive to a single console. If the PS5 had as many players as the Nintendo Switch, if it had launched on PC at the same time, or if there was a PS4 version, there may have been enough initial sales to prevent the operating profit drop, or at least reduce it.
Due to the situation at hand, Square Enix's stock price dropped significantly in Japan. Square Enix is said to have promised changes going forward, including less investment in mid-sized games and more in AAA releases. What that means for Final Fantasy and other Square Enix projects, however, is unclear.
Final Fantasy 16 is available now on PS5.
Source: Eurogamer, Twitter (David Gibson)