Deus Ex boosts Square Enix's half-year forecast [update: official results posted]

Square Enix issued a change to its most recent six-month forecast of earnings, now that it's had the benefit of actually experiencing those six months (April-September 2011). That has a tendency to make predictions a bit more accurate.

The revision is a slight increase in net sales, from ¥56 billion ($718 million) to ¥57 billion ($730 million), and a whopping 146.7% increase in net income. These increases come thanks to the success of Deus Ex: Human Revolution and "increased billing revenue" from web, social, and mobile games.

Thanks to the unusually strong yen, Square Enix had the misfortune of marking an additional "foreign exchange loss" of ¥2.1 billion ($27 million). That's a lot of money to just have disappear.

Update: Square has posted its official results and the predictions, unsurprisingly, were right on the money. Net sales reached ¥57.5 billion and net income of ¥3.7 billion ($47.4 million).

Reader Comments (12)

"Thanks to the unusually strong yen, Square Enix had the misfortune of marking an additional "foreign exchange loss" of ¥2.1 billion ($27 million). That's a lot of money to just have disappear."

Can someone explain this to me? I've seen this thing been said before, but I don't understand why having a strong currency makes you LOSE money... isn't having a strong currency a good thing?

@tmujir955 From my understanding (so take it with a grain of salt) since the Yen is so high when an American purchases one of their games the profit is worth less Yen which, in turn, decreases that profit.

@tmujir955

It's because when they sell things in US dollars, for example, they need to convert it to their local currency (which I'm guessing is ¥) for financial reporting purposes. Selling something for $60 US is worth less and less as long as it takes more dollars to buy one yen (AKA when the Yen appreciates in value or the US dollar drops in value).

@whatkey
Right. The solution would be to sell the game for more here, to match the inflation of the dollar.

that's why I think next gen games will be at least $65. Sucks but with the dollar being so weak these days companies are going to have to make money somehow.

@tmujir955 Don't forget all these forcasts were probably made BEFORE the Yen surged in value, making it look like a loss.

That hasn't actually lost money, only lost money according to their predicted profits.

@mrantimatter

Hopefully they can learn to cut costs so they don't have to raise prices. But we all know they would most likely cut costs AND increase prices citing economic turmoil. All it does it just add to the piracy fire. The VG industry as a whole needs to rethink the business model.

@tmujir955

This problem exists for companies whose dominant sales channels are in other currencies.

Japanese companies who sell to the American market spend most of their costs (predominantly labor, real estate, taxes, etc) in Yen, which is increasing in value. They then sell their product in USD, which is falling in value, so it converts back to less and less Yen over time. This problem doesn't exist so much for a Japanese company selling to a Japanese audience or an American company selling to an American audience, because the costs and revenue are both in the same currency.

The opposite is also true. When the Yen is weak against the dollar, Japanese companies make more money from US sales because of the conversion.

@sweetbrother Tomb Raider could be huge, shame we probably won't see Thief 4 until 2013 though.

Put out more Deus Ex, less Final Fantasy.

Success.

@KungFuChaosNinja

Don't tempt them, we might get a completely linear Deus Ex with automatic battles #_#

In other words, there's finally been a stellar title with Square-Enix's name on the cover, this generation... where as most everything else has ranged from mediocre to crap. I hope Square sees this and gives Eidos more support, less restraints, etc. Especially due to Eidos being a superior developer compared to present-day SE.

I, for one, would love to see a DX4, in the near future, rather than a FFXIII-3. =/

Deus Ex: Human Revolution

Deus Ex boosts Square Enix's half-year forecast [update: official results posted]

Reader Comments (12)

Posted: Nov 2nd 2011 10:49AM tmujir955 said

Posted: Nov 2nd 2011 11:03AM dancrane212 said

Posted: Nov 2nd 2011 11:06AM whatkey said

Posted: Nov 2nd 2011 11:22AM mrantimatter said

Posted: Nov 2nd 2011 11:38AM hami83 said

Posted: Nov 2nd 2011 11:40AM whatkey said

Posted: Nov 2nd 2011 1:57PM Courtney said

Posted: Nov 2nd 2011 11:09AM whatkey said

Posted: Nov 2nd 2011 11:12AM Oddgirl said

Posted: Nov 2nd 2011 12:12PM KungFuChaosNinja said

Posted: Nov 2nd 2011 12:20PM oxfordfishsalon said

Posted: Nov 2nd 2011 5:21PM UnverifiedUser said

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