Having expected to break even for the six months ending September 2012, publisher Square Enix now predicts a 5.4bn loss for the period.
The main culprit for this is slower than anticipated sales of free-roaming action title Sleeping Dogs, which has failed to replicate its UK success overseas.
The game topped the charts in the UK and continues to perform at retail, but it's a different story in the US where its 300,000 unit sales are lower than the publisher had hoped.
The company admitted that sales of a major HD game title have been growing at a slower pace than expected”. Arcade sales in Japan were also described as sluggish” whilst a delay to a social game service also contributed.
In other Square Enix news, the company has admitted that it does not intend to reinstate its Japanese Official Merchandise store following the hack that took place last week.