Square Enix's income has dropped 61 percent year-over-year, with Hajime Tabata's Luminous Productions being partially held responsible
Square Enix released its financial results for the six-month period ending September 30, 2018 – and the Japanese company does not look well. Net sales decreased 15 percent year-over-year, while operating income decreased 61 percent year-over-year to £ 10 billion (£ 67.5 million) compared to £ 25 billion (£ 173 million) for the same period last year ,
It appears that Luminous Productions, Hajime Tabata's in-house studio, launched in March of this year, was responsible for this loss. The Financial Report states that Square Enix has "decided to conduct a thorough review of the business strategy of a wholly owned subsidiary, Luminous Productions." He continued, "This decision resulted in an extraordinary loss of ¥ 3,733 million [£25m], (…) These factors led to a profit of ¥ 8,639 million attributable to the owners of the parent company [£57.9m] (a decrease of 50.7% compared to the previous financial year). "
Following the release of this financial report, Square Enix announced that the upcoming DLC of Final Fantasy XV due to launch in 2019 should be canceled. Hajime Tabata resigned from Square Enix and Luminous Productions. In a statement, Tabata said, "I gained so much experience with my time at Square Enix. Every title I could participate in means a lot to me. However, Final Fantasy XV sets itself apart from this group, as it was a special project for me, in which I entered into an all-in project. He added, "In terms of my next effort and the near future, I have a project that I really would like to solidify as my next challenge to Final Fantasy XV. That's why I decided to leave my current position and start my own business to achieve my goal. "
Back to the financial results of Square Enix, all segments have decreased: console games, titles for "smart devices and PC browsers" and MMORPG are all listed below the expectations of the company. In terms of digital revenue, earnings were down 18.9 percent year-over-year, while operating income in this segment declined 50.9 percent year-on-year.
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