Square Enix has confirmed a number of in-development projects have been scrapped, costing the studio £112million.
The news came via a Notification of Recognition of Extraordinary Losses that Square Enix shared with shareholders earlier this week, while the projects were abandoned in March at the end of the last financial year.
According to the notice, Square Enix’s board of directors made the decision “in light of the myriad changes” that are currently underway in the world of gaming, with the company hoping to “revise their approach to development of games with the intention of being more selective and focused on the allocation of development resources.”
They also added that the £112million of losses might increase “given various inherent uncertainties”.
Square Enix hasn’t confirmed which projects have been affected by this decision. Back in November, president Takashi Kiryu revealed that he wanted the studio to become less reliant on games like Dragon Quest and Final Fantasy (via Eurogamer).
“The tastes of customers in the gaming market have diversified, and customers have come to enjoy content from a variety of genres. The market is increasingly polarised between blockbuster and indie titles, but I feel that we have developed many titles that fall somewhere in the middle. I want to make clearer distinctions going forward,” he added.
The news follows reports that Final Fantasy 7: Rebirth has underperformed, selling just half of Final Fantasy 7: Remake. “I wouldn’t expect this to have a significant impact on the scope of the third game at this point, but it could lead to Square Enix reconsidering its approach to how it handles direct sequels that are reliant on a prior prior base buying the new title,” analyst Daniel Ahmad told Inverse.
The past week has seen studios like Flaming Fowl and People Can Fly cancel in-development projects due to the “lack of funding” in gaming while Grand Theft Auto publisher Take-Two also confirmed it had laid off hundreds of members of staff and cancelled a number of games.
In January, Microsoft confirmed it was set to lay off 1900 members of staff who work across Xbox and the newly acquired Activision Blizzard while Riot Games laid off over 500 members of staff and cancelled development on all League Of Legends spin-off titles. The following month Disco Elysium developer ZA/UM cut a quarter of its staff.
In other news, Microsoft has confirmed a Xbox Games Showcase will take place next month, alongside a mysterious Direct.