Former Square Enix exec on why Final Fantasy sales don’t meet expectations and chances of recouping insane AAA budgets

[John Elden Ring]

​

Navok noted that if a game costs $100 million to make over five years, it has to beat what the company could have returned investing a similar amount in the stock market over the same period. “For the 5 years prior to Feb 2024, the stock market averaged a rate of return of 14.5%. Investing that $100m in the stock market would net you a return of $201m, so this is our ROI baseline,” he explained.


Besides production budgets, there are also marketing costs, platform fees, and other factors such as discounts to take into account.

“Assume marketing expenses at $50m, and assume that you’re not going to get $49 [after 30% platform fees] but rather an average closer to $40 given discounts, returns and other aspects,” Novak noted. “Now let’s say in that first month you sold 3m copies with $40 net received (we will ignore the recoup). You need to surpass $254m to make expectations. (That’s $100m + $101m in ROI baseline + $50m in marketing).”

 

[Zzero]

For those who don't want to click and haven't heard of him, here's his twitter bio:

"CEO, Genvid. Previously 社長付 (President's Office) and Director of Business at Square Enix Holdings, reported to CEO."

 

[ethomaz]

Square Enix expected the sales to grow to meet expectations but instead the sales declined.

That is the biggest issue they are facing with FF franchise right now.

BTW he explain how GAAS games (like Fortnite) are taking the time of gamers not allowing them to buy new game experiences.

I totally understand it (because Destiny took all my playing time for more than 2 years with over 2000 hours of playtime) and why Sony is trying to diversify with GAAS games.

He points the industry is growing in revenue but that is due GAAS games… single player games are either stagnant or declining in revenue.

 

[ethomaz]

Maybe one of the better explanation about FF sales decline I read…

To that end, FF as a brand cannot simply get smaller, be made better, be made cheaper, and still be FF. And frankly speaking, the lesson from my prior thread isn’t being learned in responses that say FF specifically should be smaller or cheaper.

Cost is not the problem, sale price and market size are the problem. We need to admit that a larger portion of players today prefer service games and are voting with their wallets and time, playing titles like Genshin Impact instead.