Square Enix has reported a massive $33 million loss for the period ending September 30th.
The substantial drop appears to stem from a restructuring effort at new studio Luminous Productions, which seems to have shifted focus to develop large, high-budget triple-A games.
Luminous was set up earlier this year, with key talent from Final Fantasy XV heading up the new studio. Itâ€™s not clear exactly how much has changed, as the studio was founded with the claim that it would be developing triple-A titles.
Additionally, net sales dropped 15 per cent year-over-year to $1.08 billion, while profits were slashed in half down to $76.4 million. Operating income fell 61 per cent to $88.5 million, with ordinary income falling 43.6 per cent to $132.8 million.
Square Enix failed to comment on performance regarding itâ€™s two big-ticket releases for the six-month period – Nintendo Switch-exclusive Octopath Traveller and Shadow of the Tomb Raider.
Game releases come under Digital Entertainment in Square Enixâ€™ results. Net sales in that side of the publisherâ€™s business fell 18.9 per cent year-over-year to $732.5 million. Digital Entertainment operating income halved to $115.4 million.
That drop was also attributed to poor mobile and browser game performance, and a reduction in licensing income.
But Square Enix is somewhat hopeful for the remainder of the year, predicting net sales to increase by 7.8 per cent to $2.39 billion.
With older titles performing below expectations, Square Enix plans to rebuild its development and operation team for mobile and PC browser games and focus on select new games going forwards.