Square Enix’s income is down 61 per cent year-on-year, with Hajime Tabata’s Luminous Productions being partly blamed

Square Enix released its financial results for the six month period that ended on September 30th 2018 – and it’s not looking bright for the Japanese firm. Net sales were down 15 per cent compared to the same period last year, while operating income plunged 61 per cent year-on-year to ¥10bn (£67.5m) compared to last year’s ¥25bn (£173m).

It seems that Luminous Productions, Hajime Tabata’s in-house studio launched in March this year, was partly responsible for this loss. The financial report said that Square Enix “ had decided to undertake an in-depth review of the business strategy for a wholly-owned subsidiary Luminous Productions.” It continued: “This decision has resulted in the booking of an extraordinary loss amounting to ¥3,733 million [£25m]. (...) These factors resulted in profit attributable to owners of parent of ¥8,639 million [£57.9m] (a decrease of 50.7% from the prior fiscal year).”

Following the release of this financial report, Square Enix announced that Final Fantasy XV’s upcoming DLC, due to launch throughout 2019, was being cancelled, with Hajime Tabata resigning from Square Enix and Luminous Productions. In a statement, Tabata said: “I was able to gain so much experience with my time at Square Enix. Every title I was able to be a part of means a lot to me. However, Final Fantasy XV stood out from that group as it was a special project for me which I went all-in on.” He added: “In regards to my next endeavors and near future, I have a project that I truly wish to solidify as my next challenge after Final Fantasy XV. For that reason, I have decided to leave my current position and start my own business in order to achieve my goal.”

Going back to Square Enix’s financial results, all segments have decreased: console games, “smart devices and PC browser” titles and MMORPG are all listed by the firm as having performed below expectations. In terms of digital sales, results were down 18.9 per cent year-on-year, with the operating income for this segment being down 50.9 per cent year-on-year. 

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