Square Enix has lost nearly $2bn in market value since Final Fantasy 16’s release

Square Enix’s stock has fallen 30% from its peak this year, wiping almost $2 billion off the company’s market value.

The Japanese publisher’s share price reached its highest point this year in the days running up to Final Fantasy 16’s release in June, but it closed on Wednesday at its lowest level since May 2022.

The slump comes after sales of the PS5 game reportedly failed to meet the high end of the company’s expectations.

But it also follows the disappointing performances of other big budget releases like 2020’s live service flop Marvel’s Avengers, support for which will end this month, and Forspoken, the debut game from Square Enix’s Luminous Productions studio, which launched to “lacklustre” sales, according to the company.

In a Bloomberg article analysing Square Enix’s recent downturn, anonymous employees and contractors claimed the company is suffering from issues with its game development structure and quality control, while analysts expressed concerns about its longer-term prospects.

“Flooding the market with unfinished, bad or untested games is a bad move,” Tokyo-based developer and gamer Michael Prefontaine said, referencing Marvel’s Avengers, Forspoken and The DioField Chronicl. “The company has overstretched itself on too many titles without proper oversight.”

Current and former Square Enix employees reportedly claimed one of the causes of such issues is Square Enix’s decision to give individual producers too much control over the scope and direction of projects. They also said games have suffered from inadequate documentation and team structure.

“We remain concerned with the company’s game development structure and game quality control, which could limit the longer term performance,” said Macquarie Capital Securities Japan analyst Yijia Zhai.

Earlier this month Square Enix announced that a PC version of Final Fantasy 16 is in development, in addition to two pieces of paid DLC.