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Tomb Raider must sell between five and ten million copies in order to be successful, independent analyst Billy Pidgeon has told investors.
“Square Enix’s franchises are well established and require ever-higher production budgets to match and surpass past performance. The latest Hitman and Tomb Raider sold in the three million unit range and got Metacritic ratings above 8. Those numbers would rate as successful for JRPGs that earn more from vendors as exclusives and have manageable budgets,” explained Pidgeon.
“But for games with development budgets approaching $100 million to be truly profitable, ratings have to be above 8.5 and sales need to be in the five to ten million unit range.”
The problem runs deeper than just these two titles, however, with Pidgeon pointing to a catalogue of IPs which are single-player focussed.
“The AAA market is extremely competitive,” he said. “Most of Square Enix’s franchises are single player games, which are less popular than multiplayer. Square Enix has been a leader in that sector, but now faces stronger competition from multiple publishers, both large and small, including Bethesda, Capcom, Xseed, Atlus and Level 5.”
And whilst the publisher has invested in the online space, it has achieved only middling success.
“On the positive side, the company has made investments in online, social and mobile games including free-to-play games,” said Pidgeon.
“Some of these have done well in Korea, which is a very competitive and mature market, but Square Enix’s micro-transaction-based role playing and collectible card games haven’t performed well in Japan or in the West.”
Yesterday Square Enix warned investors of a dramatic reduction in its sales forecast, which is now expected to be a net loss of ¥13 billion ($138m/£91m).
Source: GamesIndustry.biz
