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Slow sales of Sleeping Dogs, others to drive $67M loss at Square Enix
Slow sales of  Sleeping Dogs , others to drive $67M loss at Square Enix
October 30, 2012 | By Frank Cifaldi




Unexpectedly slow sales of games including Sleeping Dogs drove publisher Square Enix to forecast a loss of nearly $70 million, according to the company.

On Tuesday, the publisher revised its profit forecasts for the six months ending September 30. Initially the company expected to break even for the period, but now it's projecting a 5.4 billion yen loss, or $67.8 million.

Sleeping Dogs, released on August 14, is an open-world action-adventure that was rescued by the publisher after being canceled by rival Activision (where it was set to be the third title in its True Crime franchise).

The game sold under 300,000 units in the United States in its debut month before quietly dropping off of the top 10 charts in September (exact sales numbers are not available). It was a hit in the UK, where it debuted at number one in its weekly charts, but apparently this wasn't enough to meet Square Enix's projections for the game.

Sleeping Dogs isn't entirely to blame: the company also says that sales of its arcade games in Japan from subsidiary Taito have been "sluggish," and that it was forced to delay the launch of its social games service.

Japan's Square Enix is also the owner of former video game publisher Eidos Interactive. Major upcoming releases include November's Hitman: Absolution and 2013's Tomb Raider.


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Comments


Pablo Simbana
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I'm ready to give squareenix my money... if they only released the type-0 localized, that game is worth 60$ easily

Simon Weisgerber
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Just didn't have the margin. PSP title of that scope fully localized? Was bound to get canned...

Pablo Simbana
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@Simon: Probably you're right, the game is huge and is such a shame, I wouldn't mind if they translated the text and left the japanese voices (never been a fan of dubbed games anyway), corpse party did it so why not squareenix u_u' plus if they release it on the store people on the vita can play it as well

Nuttachai Tipprasert
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I read from Kotaku some months ago about the reason why localized games need to be dubbed. A girl from XSeed wrote that it's a necessarily to dub the game, otherwise, some game store will not put them on the shelves. Corpse Party was a very niche game in very niche genre. The game doesn't need to appeal mass market, so, having no shelve space wasn't affected the sale that much. This problem might not be the case in the future when most of the games will be sold exclusively on digital stores.

Eric Adams
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This is a bit of a bummer/shocker. Considering (IMHO) the fresh take on sandbox action/adventure that game provided, the fun and campy experience, strong VO cast and its release in August...I expected much better sales. The console game space is a very, scary place these days. If gamers won't support an original IP in a slow release month...what will they support? Props to Square on taking this chance. Sad there won't be a sequel.

Harlan Sumgui
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agree 100%. I really hope Dishonored with it's critical reception and Xcom, with its take on tbs don't disappoint. $60 games employee a lot of people.

Justin Petersen
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Calling Sleeping Dogs a new IP is a bit of a stretch. The game was announced in 2009 as "True Crime: Hong Kong" (which would have made it the third game in the series), but after SquareEnix acquired the publishing rights, the title was changed since SquareEnix didn't have the rights to True Crime. Like Dark Souls, it's a new IP only in the technical sense for legal reasons.

Paolo Adriano
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@Justin Petersen: Even before True Crime: Hong Kong, it was its own thing called Black Lotus.

Alex Covic
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I think, I do speak business lingo, but would question the logic behind: "slow sales ... cost over $67M" - "slow sales of games including Sleeping Dogs may have cost publisher Square Enix [money]"

The predictions were off. They missed their estimates.

Projecting an estimate (win or loss) and "costing" money are two different things?

It only "costs" you money, when you are actively losing money - not when you are not making ENOUGH money?

(Or is my English that much off? It was the 5th language I had to learn, so I am really asking.)

Kris Graft
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"Cost" wasn't the clearest there. "Loss" (as in profit vs. loss) is probably the better word, so we updated it for clarity. Also, with these forecast revisions, you can typically expect them to be accurate, even though they're technically still "estimates."

Cordero W
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They still need to get their fifteenth Mercedez Benz.

Zirani Jean-Sylvestre
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It's hard to say if they are wining or losing money as we don't know what was the total budget. According to vgchartz, it sold a million without taking into account the steam sales. I presume they were making a sales estimate of 2 million.

On the other hand, the sales were somehow predictable. It's very hard to rock the house with a new IP when the catalog is full of big name franchise. Few games manage to do that but they are exceptional.

Jeremy Reaban
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Don't take VGChartz seriously.

Harlan Sumgui
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yeah, look at the npd #s.

WILLIAM TAYLOR
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Say what you will, but stuff like this is why Bobby Kotick will be around for a while. Gamers were hemming and hawing up a storm because he said this game would tank and he got rid of it. Someone else picks up and, surprise surprise, the game tanks.

Call of Duty, Blizzard, and Skylanders making billions. Activision is carefully avoiding clunkers that rival companies don't have the good sense to avoid. He's going to be running things for a while.

Sorin Sandru
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This is to be expecte. Like every new IP it's going to sell less than expected. If you take a look at completly new franchises or reboots of older games then you can easily see that the sales aren't superb. It's a verry known fact that new games will only appeal to the core gamer and eventually spread by word to their friends. So when the next game comes out their friends will buy it and sales will increase.

Personally i think Activision did the wrong thing and not keeping this game. It's a great game and it brings some freschnes to the currently stale AAA market.

David Navarro
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Still a shame, though. The game is excellent.

Jim Speir
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The only reason their game isn't selling is because it is waaayyy overpriced for what it is. Square Enix have mad e alot of good games before but to expect gamers to pay 29.99 for a game which wasn't highly acclaimed compared to other things on the steam site in any case (Borderlands 2 , the Killing Floor Hillbilly Hell event , Counter Strike Global Offensive etc) they didn't stand a chance. If there is no push for a promotion during a games initiation , they rarely get much recognition unless they are a big franchise game (COD is the big example there). If this game had left the 30 range and entered the 15 - 20 range , the uptake would be far greater , but for a game which is just not known about and looks way too much like True Crime (because it IS true crime) , a nearly 10 year old franchise , its an absurd amount of money.

Give us another Just Cause with a new Rodriguez and I will buy it though!

Interesting note is that Just Cause 2 was recently featured in the steam sale son the front page no less!

Richard Ellicott
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sleeping dogs was 2.50 on steam.... that's how desperate they where to make us play it


so no i think it's likely because it's another bloody gta clone

Michael Joseph
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If Sleeping Dogs were a movie, it would be straight to DVD.

Alan Rimkeit
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Oh for the love of the Video Gaming Gods, just re-make Final Fantasy 7. Does SE not like money? Are they dumb? I don't care if it is retreading old ground. They want cash? Give us a remake of FF7 made in the newest FF game engine for the next PlayStation and X-Box. This will make them tons of cash. It should have happened for this gen of consoles but the next one is good enough.

Ramon Carroll
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I'd pay a queen's dowry for an FF7 remake.

Having said that, I think I remember SQE once stating during an interview (I think it was on Kotaku?) that a release of an FF7 remake would essentially mean that the FF series is finished, so it could only be done once they feel that they no longer have any new ground to tread.

A W
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Live and let die.... Remaking FF7 would not be the same, would just add more, and not be accepted by hardcore fans. Best they leave it as it is.

Alan Rimkeit
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It would not be accepted? Yeah right. It would sell like chocolate dipped hot cakes.

Ramon Carroll
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If those "hardcore" fans are anything like me, then they will purchase the game no matter what. The original holds a special place in my heart.

For people to reject it, the previews, interviews, and demos would have to be absolutely horrible. Otherwise, the brand is strong enough to carry itself. I'm not saying its the perfect game, because its not, it's full of flaws. It would break even, in the very least.

Ramon Carroll
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I really hope that this doesn't translate to more layoffs....

Cordero W
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"They didn't make as much money as we wanted even though people still bought it, so we're laying you guys off for doing a bad job."

I can see this happening.

John Peabody
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This story annoys me. It's as if gamasutra have just gone to vgchartz and blamed sleeping dogs for squares losses this quarter. If they had contacted square the would have found out that sleeping dogs sold beyond their expectations. Vgchartz does not represent actual sales numbers correctly and doesn't record steam sales either. Next time gamasutra, before you go blaming a game and giving it bad press get your facts straight.

Greg Quinn
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This game was absolutely awesome, I enjoyed it far more than any GTA.
A lot of people didn't know about this game, I think that's a problem with their marketing department.

But GTA V has some big shoes to fill.

Ramon Carroll
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(changed my mind. deleted)


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