Square Enix's newly released financial report confirms that Final Fantasy 7 Rebirth sales and Final Fantasy 16 are lower than expected: 'Profits did not meet our expectation'

Square Enix President Takashi Kiryu revealed today that Final Fantasy 7 Rebirth, and Final Fantasy 16 had not sold as many copies of the games as the company hoped. "We released a number of new titles, including major games such as 'Final Fantasy 16 and 'Final Fantasy 7 Rebirth', but profits did not meet expectations," Kiryu stated.

The financial results for Final Fantasy 16 were first released on May 13, 2024. This was months before the PC release yesterday. It's safe to say that this will boost sales. Final Fantasy 7 Rebirth's PC release is still not confirmed. Kiryu noted that MMO profits had dropped, but attributed this to "a lull before the launch of 'Final Fantasy 14 Dawntrail' extension pack," which was released in June.

Square Enix's declining profits were reported in May after the financial results had been delivered to investors, but now that the financial report has been published, we can see Kiryu's exact words.

Kiryu blamed Square Enix's strategic failures for the decreased profitability of their games throughout its financial report. Square Enix's publishing policy has essentially forced its new releases into a sales competition with its own games. Kiryu stated that "we did not manage our titles portfolio across the entire company as well as we should have," which resulted in lost opportunities due to cannibalization.

There are a lot of big budget Final Fantasy games competing for attention. This includes a three-part Final Fantasy 7 Remake, the continued Final Fantasy 14 Expansions, and Final Fantasy 16. These have to compete against all the other RPGs Square Enix regularly publishes, such as Visions of Mana, and remasters such as the upcoming Dragon Quest HD-2D remasters. Square Enix has a lot of RPGs, which is great for us. But it's good for Square Enix if customers buy all the games in their catalogue.

Square Enix’s “new multiplatform business strategies” were also included in the report, which we had covered when it was first announced back in May. This plan, which includes initiatives "designed to win over PC users," also involves downsizing the studio portfolio and its workforce. The May 2024 business plan was revealed alongside layoffs in US and EU Square Enix office following the sale of Crystal Dynamics to Embracer and Eidos Montreal in 2022.

Kiryu stated that Square Enix also undergoes internal restructuring in Japan in an effort to counter what he called the "siloization of the company's developers." Kiryu explained that a reorganization took place on April 1, 2024, which created a flat structure to increase opportunities for discovering untapped talent within the company's existing employee pool. It also aimed to promote greater dialogue between development and publishing functions. In a Q&A session at the end, he provided more details on that reorganization. He said studios would no longer "pursue development efforts completely independent of one another." We have instead established a regular forum where the heads of each studio and myself, as president, can discuss the titles we plan to produce and the status of ongoing project, human resource allocation and other topics.