5 Reasons Square Enix Is Facing Financial Ruin

I used to work for an English school in Japan that wanted to publish its own book series. The teaching staff reviewed it and took note of its countless errors, nonsensical lessons, and even instances of Oxford Press plagiarism. "Miyuki," we urged the owner in a meeting, "We have to delay publishing until next semester so that we can fix this." These books were beyond awful. The lady, seeing only visions of dancing money, sent the books to be published in their current form, allowing no teacher intervention. It didn't take long for customers to notice how bad they were and begin complaining, fulfilling the prophecies of the teachers.

Sadly, Square Enix has been demonstrating this same stubbornness and disregard for quality assurance lately, and this year, it's going to end up costing them $150 million in losses. For every The World Ends With You, there's a Last Remnant or an Infinite Undiscovery. Let's take a look at the main reasons for this.

Financial Fantasy Bore-teen

Final Fantasy XIV was, as admitted by the company's numerous public apologies, a rush job. Hang on. This is a serious business crime in my book. I'll let a company slide on cutting some corners once in a while — it's a human thing to do, and every single person in the world does it at work, at some point. Don't lie, this includes me and you.

But me not putting a cover sheet on my TPS Report can't compare to the failings of Final Fantasy XIV. These were not just corners that were cut; they were slashes right down the middle, veritable axe chops to the chest of what could have and should have been a solid MMO. Yeah, yeah, haters gonna hate Final Fantasy XI, but heck, as someone who used to play MMORPGs as a job, it was one I actually enjoyed and came back to once in a while. I even might be playing it right now if I weren't so busy bitching about other games online.

FFXIV spent months being unplayable and is still operating for free due to the overwhelming amount of ass packed into Eorzea. I'm not alone when I declare that my anaconda don't want none unless you got fun, hon'. Right now, most people are not sprung on FFXIV, for good reason.

Now, where that comes into play here is that people are not as mindless as Square Enix apparently expected them to be. I can see how, in that position, executives might have wanted to launch in September regardless of how obviously incomplete it was, fully confident that the Final Fantasy name would sell itself. They're right – the franchise has had a way of selling itself this last decade or so, but not when there's a subscription fee involved. People bailed out on the game and reviewers slaughtered it, leading not only to sales below expectations, but the PS3 version also got indefinitely delayed, and they lost that precious, precious subscription money that is vital to the success of all large-scale MMORPGs. Running a full-fledged MMO for nine months costs a ton of money, and when you're not getting the subscription fees you were banking on, well, here comes trouble.

Bored of Arcana

But the rabite hole goes deeper than Final Fantasy XIV. Remember Lord of Arcana? Me neither. Monster Hunter has been enjoying phenomenal success, and Square Enix wanted a piece of Capcom's pie. But Lord of Arcana was an unoriginal, unpolished, un-fun experience. Why? Well, like a certain Square Enix property would urge us, let's look upon the heart.

The Monster Hunter team is getting stuff done and letting their creative juices flow, of course wanting to make some bank but also wanting to deliver an awesome game. Lord of Arcana, however, was made by some people wanting to do whatever Monster Hunter was doing, because they crunched some numbers and figured out someone was gettin' rich off it. A Monster Hunter clone can be made with success; Namco Bandai did it with God Eater, which has tremendous Japanese sales and ended up getting comic and action figure spinoffs.

Namco Bandai saw what Capcom was doing and tried to do it better (whether they did is purely subjective, but hey), and for that, they got rewarded with a successful and well-liked franchise. Namco Bandai saw a great game and said, "I'll bet we could make something people would love." Square Enix, however, saw that game and said, "I'll bet we could make something people would buy." That kind of business gets noticed.

It's not delivery, it's… nothing.

The above is not to say there's some sort of crime in wanting to make money — far from it. The whole point of any business is to make money. In order to stay in operation, they must find the most efficient way to make the most dough. But the finance end of things has sadly become this company's only focus, rather than just its primary one. There's nothing wrong with wanting to make money, but your products start to suffer when that's all you're working for.

It's bad news for everyone, however, when your products start to look like obvious cash-ins rather than something you honestly believe your fans will enjoy.

Square Enix being business and sort-of artists, I fully encourage exploring some new ideas and being creative. No matter what, you gotta find some time to try new things and do what you really want to do rather than what everyone else thinks you should do. At the same time, the universe requires balance. Do some one-off projects, have your fun, but you have to give people at least something that they're asking for.

I won't spend a lot of time on this point because it's one of the most obvious; but seriously, how many phone calls, emails, press conference questions, and open letters does Square Enix need to receive before someone makes Kingdom Hearts III or HD remakes of Final Fantasy V through IX? Who does that? What other business knows the overwhelming majority of its customers wants a certain thing and then just sits idly by? Businesses that are losing 150 million dollars this year, that's who.

Cha-Ching'dom Hearts

Eventually, the masses will even start to notice the downward trend with Kingdom Hearts. For some reason that I can't understand, people still flocked to buy Kingdom Hearts Re: Coded, a cellphone-to-DS port. While every game has its fans, this one isn't held in super high regard by series loyalists, and with it, Square Enix is only tarnishing its brands. Kingdom Hearts started as highly touted, full-scale, epic action RPGs and lately haven't been anywhere near the big screen that made them famous.

Now hey, Birth by Sleep was a great game and all, but I consider it a diamond in the rough of KH portables that have overall served only to damage the Kingdom Hearts name. Chain of Memories and 358/2 Days, on the other hand, have been more polarizing. Those kinds of games are nice for the sales right now, but they'll be paying a price in gamers' confidence in the series.

Moreover, why would the company not put Birth by Sleep on the PSN? These days, such is the action of someone who just hates making money. If you want to make the retail copies sell out first, OK, fine, do it like six months later but come on man, get yourself a broader reach while getting paid in the process. Heck, I'm even saying this as a guy who even prefers physical media.

CURSES XIII

What's even worse for Square Enix in the midst of all this money squandering is that now, they've put themselves in a position that when the long-awaited saviors of Versus XIII and Final Fantasy Type 0 arrive, they actually won't be huge boosts, simply because of the "long-awaited" part. Programmers ain't working for free, and the longer this drags on, the bigger debt the company needs to pay off in order for a game to be profitable. If Final Fantasy Versus XIII sells 15 times what the average game sells, that might sound great initially, until you realize, oh yeah, it also has technical specs that cost a lot more, requires a bigger staff, and will end up having been in development for several years longer. That takes a mighty big chunk out of the profits.

In Final Fantasy VII: Advent Children, Tifa mocks Cloud's procrastination by chiding, "Dilly dally, shilly shally." Linguists are still unsure of exactly what the hell that means, but my gut tells me there's some hidden Square Enix business philosophy in there: a lot of talk, not a lot of delivery. Games are not free to develop, and the longer they drag on, the more they cost. If it's a matter of quality, I can respect that, but dude, half of Final Fantasy XIII's story was in an encyclopedia that the player was expected to just hang out and read for hours.

That's what happens after five years of development? Five years of seeing screenshots and hearing about how Final Fantasy XIII was going to be the single greatest thing to ever happen to the world… and the story is in an encyclopedia? Swap out whatever development time and money went into the embarrassingly bad Kingdom Hearts DS games and that Chain of Memories PS2 remake and heck, we might have a release date on Kingdom Hearts III by now — a game that series' fans are begging for. This business is not child's cake, but it's not rocket surgery either. Square Enix's biggest releases are coming farther farther apart than ever before, and delivering less of what made the company famous to begin with. There's a price for that.