Does Not Compute: Square Enix Sells Millions, Fires President

Sometimes the video game industry just refuses to make any sort of goddamn sense.

Case in point: Square Enix noted “weak sales” of some of its releases for the last fiscal year as reasons for firing their president and “restructuring.” Now, normally the words “restructuring” means a lot of peons will lose their jobs for the failings of their bosses but nowhere in the story does it say they will lay people off. This happens all the time in the video game industry, especially since the global economy took a massive dump on itself in 2008 (thanks Wall Street!).

However, I note this story because it highlights something that just makes no good goddamn sense. The president of the company gets fired for the “weak sales” of multiple titles – that part makes perfect sense. It’s good to see someone held accountable for failure. The part that doesn’t make sense is the numbers. You see, the three titles highlighted by Squeenix as having weak sales all sold… well, they sold pretty fucking well, actually. Sleeping Dogs, by every indication a well-made game, sold over 1.75 million units. Hitman: Absolution sold 3.6 million and Tomb Raider, despite having early trailers that made even traditionally misogynistic gamers a bit squidgy, sold 3.4 million units.

Those aren’t failures. Those are not weak sales. I’d wager most video game developers (not publishers, mind you) would give body parts to get sales that high, especially a developer creating a brand new IP like the guys who made Sleeping Dogs. All three games got decent critical reviews and sold very well. Yet those sales are considered so weak that a man loses his job over them and the company loses over $100 million because of them.

How fucked up is your company and by extension, the industry itself when that many units can be moved and the company still doesn’t make money? What exactly has the money been spent on? Another big-time publisher, the continually inept and thoroughly evil Electronic Arts (EA) has stated recently that most of their franchises would need to shift FIVE MILLION COPIES to break even.

FIVE… FUCKING… MILLION. This list of the top-selling video games of all time tells you that a game with those kinds of sales numbers would automatically be among the best-selling video games EVER. As in all-time historical bests. So how would a company that puts out so many games in one year expect that every single one would have all-time record sales or else the company would lose money on them?

They couldn’t because they wouldn’t. Even if you didn’t exhibit the kind of willful incompetence that Electronics Arts has shown in the past three months (hi, Sim City fans!), one still could not reasonably expect that every game a publisher puts out is going to be a hit, much less an all-time record seller. It is statistically impossible.

So I ask the question again: how fucked up is the industry that the players with the most money have such insane business practices that they must have record sales on every title to break even? I guarantee you the developers aren’t getting the money. Most are happy to make enough money to pay all their staff and make another game. It isn’t the game retailers because we’ve seen over the last few years that Gamestop’s profit doesn’t come from new game sales so much as secondhand used game sales. So where is that money going? I don’t have an answer though I suspect like much of the business world these days, there’s a good bit of “bonus money” that’s getting doled around to everyone not actually involved in the making of the game. People like the soon-to-be ex-CEO of EA, John Riccitiello, who likely leaves a floundering company with millions of dollars in severance pay and stock options to feather his nest for generations. Even executive greed though can’t really account for just how spectacularly bad their dollars and cents are to be drowning in losses on games that generate as much revenue as a 1.7 million unit seller should.

Is it any wonder developers are now flocking to funding sources like Kickstarter to avoid the money pit that publishers represent? If the accounting is so bad on projects with so much money on the line, imagine how dodgy the accounting must be when it comes time to pay out royalties to developers. And when the big pubs use incredibly dodgy reviews scores from Metacritic.com to determine whether a developer should get the full royalties on the games they produce, the big publisher accounting starts smelling pretty fishy.

In short, this industry is a corrupt house of man-children getting taken advantage of by slick assholes in suits who run off with golden parachutes after depriving developers of hard-earned royalties and investors of dividends. Unfortunately, the alternative funding sources like Kickstarter are now getting abused by assholes with more money than goddamn sense or game design skills to fund their vanity projects while indie developers continue to go begging.

So congratulations Electronics Arts and Square Enix for money-spinning successful video games into huge ass losses. I don’t have a solution, but I sure do see a problem.

March 26, 2013 at 3:19 pm | Video Games | No comment

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