Square Enix admitted today that it is "struggling" to recover from the huge losses that it posted earlier in the current fiscal year -- although the company forecasts a swing to profits before the fiscal year is up.
The publisher previously suffered heavy losses due to unexpectedly slow sales of games including Sleeping Dogs. Now the company says that "the increasingly difficult condition of the world-wide console game market" means that it is finding it hard to recover.
A number of the company's smartphone and browser games, such as Sengoku Ixa and Final Fantasy Brigade, are helping to balance out this console game decline, while MMORPG Dragon Quest X is showing steady progress, says Square Enix.
However, as the company moves into the final fiscal 2013 quarter, it's putting its faith in a number of high-profile console titles. Dragon Quest VII for Nintendo 3DS is due for release in Japan this week, while the Tomb Raider reboot is releasing in North America and Europe in March across multiple platforms.
The publisher also has Kingdom Hearts HD 1.5 Remix and Final Fantasy XI expansion Seekers of Adoulin releasing in March to help bump up its full fiscal figures.
For the nine months ending December 31, 2012, Square Enix's Digital Entertainment division (which mainly consists of its games business) posted revenues of 57.8 billion yen ($622.6 million), up 7.7 percent year-over-year, and operating losses of 392 million yen ($4.2 million), compared to operating income of 12.4 billion yen ($133.5 million) year-over-year.
Overall, the company recorded revenue of 102.8 billion yen ($1.1 billion), up 7.4 percent year-over-year, and losses of 5.7 billion yen ($61.9 million), compared to profits of 5.0 billion yen ($54.0 million) year-over-year.
And for the full fiscal year, Square Enix expects to make 150 billion yen ($1.6 billion) in revenue, up 17.3 percent year-over-year, and profits of 3.5 billion yen ($37.7 million), down 42.2 percent year-over-year.