Square Enix stock price drops following reports of Final Fantasy XVI’s underperformance

Square Enix's share price dropped nearly 15% following the release of the publisher's most recent earnings report, which claimed that Final Fantasy XVI did not meet the company's expectations.

The details:

• On August 4, the publisher released its earnings report for the second quarter of 2023, revealing that while overall revenue increased by 14% year on year, profit dropped by 65%. The company's share price was 6,366 yen at the Tokyo Stock Exchange's closing time on Friday, but when it reopened on August 7, it dropped and mostly remained at 5,566 yen, even dropping to a low of 5,457 yen at one point.
• This is the lowest Square Enix stock price has been since May 2022, according to Bloomberg, and it is the company's worst drop in a single day in the last three years.
• In a post-earnings call (via Bloomberg’s sources), company president Takashi Kiryu reportedly placed some of the blame on FF16 sales, stating that they "did not meet the high end of the company's expectations." Kiryu also stated that the "slow adoption" of the PlayStation 5 hampered sales of the game, as FF16 is currently locked behind a six-month exclusivity agreement with Sony, and that he believes more units will be shifted as players upgrade from previous generation consoles.
• Square Enix previously denied rumors of the game's poor performance, claiming that they were "strong" despite selling three million copies in the first week, compared to five million for FF15. Its exclusivity was once again cited as a solid reason for the lower sales figures, and with a PC port confirmed for the future, as well as the possibility of the game coming to Xbox, it's thought that the game could be a slow burner when it comes to shifting copies.

More gaming news:

• Modern Warfare 3's reveal date, key art, and new weapons have been leaked online. Activision previously confirmed that the game's reveal would take place inside Warzone, although it did not share when. According to the newly shared key art, it will apparently be held on August 17 as a limited-time event.
• Yuka Kitamura, composer for Elden Ring and Bloodborne, has announced her departure from developer FromSoftware, which she joined in 2014. Kitamura, who began contributing music to the studio's releases with Armored Core: Verdict Day, will now work as a freelancer.