Square Enix share price drops nearly 16% following underwhelming financial results

Square Enix‘s share price has dropped by nearly 16% following its FY2024 financial results on Monday.

When the Tokyo Stock Exchange closed on Monday the company’s share price was sitting at ¥6,268. As soon as the market opened again today, this plummeted and at the time of writing now sits at ¥5,268, a drop of 15.95%.

The drop in price appears to show shareholder unease at recent financial results, and what’s planning in the next couple of years.

Square Enix president Takashi Kiryu reportedly told analysts that sales of Final Fantasy 7 Rebirth, Final Fantasy 16 and Foamstars all fell short of their expected revenue and profit.

As a result, the publisher expects to earn an operating income of ¥40 billion ($255 million) this financial year, instead of analyst estimates of ¥57 billion ($364 million).

It also stated during its latest financial report that profits were down nearly 70% from the previous year, partly due to “the recognition of ¥22,087 million ($141 million) in losses on disposal of content as an extraordinary loss”.

Explaining this further, it said it hadcancelled a number of unannounced game projects because they don’t fit with its new strategy, specifically its new approach to how HD games are developed.

Its new strategy includes plans to “aggressively pursue a multiplatform strategy” which makes AAA games multiplatform going forward, and a revamp of its internal development process to “bring more capabilities in-house” instead of outsourcing to third parties.

VGC also reported on Monday that the company is set to make a number of layoffs as part of ongoing company restructuring.

Kiryu reportedly told staff at an internal meeting on Monday that both the company’s American and European arms would be hit with layoffs, which will happen over the course of the next month.