Square Enix to create “Cloud-centric games”, and no, that doesn’t mean more Final Fantasy 7 Remake

It’s End of Year financials season with games companies reporting just how much money they have squeezed out of us. Sony had a record year and now details from Square Enix’s financials are emerging.

In the short term they are looking at expanding their online services, so expect more games with a long lifetime with regularly updated DLC or games passes. Further out they are looking at a “shift to the cloud” and will be investing in cloud distribution and “cloud-centric games”, whatever they may be.

Cloud gaming has the potential to change distribution as streaming accelerates the shift away from traditional disks to more digital sales and evolves business models, including by giving rise to more  subscription-based services. It could additionally spur growth in the gaming market as a whole by making it possible to provide content to emerging regions where game consoles have not been prevalent. Cloud gaming will meanwhile dictate that the industry devise gaming experiences unique to the cloud environment and develop cloud-native games.

Like Sony they are delaying their in depth forecasts for the next financial year until they can work out the impact of COVID-19. Square Enix make some profit from arcades which are still popular in the East but many of these have been closed due to the pandemic.

The potential for the worldwide coronavirus pandemic to slow the global economy by disrupting production, distribution, and consumption is a concern. Risks to the Group’s business domains include a pullback in content demand, impact to the manufacturing and distribution processes for packaged products, and diminished sales from amusement facility operations. Such developments could have a serious impact on the Group’s consolidated earnings and financial conditions.

Management has determined that the uncertainty regarding the scope and degree of any such impact impedes the formulation of full-year earnings forecasts at present. As such, the Group refrains from setting consolidated forecasts for the fiscal year ending March 31, 2021

Also like Sony, overall sales were down compared to last year but that was because the previous year was so strong.

Net sales nonetheless declined versus the previous fiscal year, which had seen the release of multiple major new titles. In addition, weak additional sales of titles released in the previous fiscal year and the booking of impairment losses related to the content production account resulted in an operating loss of the HD Games sub-segment.

However, expansion packs for Final Fantasy XIV and Dragon Quest X saw a rise in digital profits as did the companies publishing arm which includes the MANGA UP! comic app.

Oh, and don’t worry there is bound to be more Final Fantasy VII Remake as it sold 3.5 million copies in just three days. If you have got the game you may like to read our guide on how to beat Final Fantasy VII Remake on Hard.

Source: Square Enix / Twitter

 

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