Responding to the presentation on X (Twitter), Jacob Nakov — who previously served as director of business at Square Enix Holdings — observed that the deck’s core complaints, namely “weak sales” and “elevated development costs,” mirror arguments he made in 2024 about FF16: that the game’s commercial performance fell short of expectations and its production expenses were too high relative to sales.
In a May 2024 thread, Nakov argued there’s a persistent misconception that Square Enix sets unrealistically high sales targets and then criticizes titles for failing to meet those targets. He said that perspective was inaccurate during his tenure and is unlikely to be accurate now.
Nakov also explained the business calculus: if a game costs $100 million and takes five years to make, its returns must be weighed against what the same capital might have earned if invested elsewhere. Factoring in marketing, platform fees, and discounts changes the break-even point substantially. Using his example: assuming $50 million in marketing and an average net of $40 per copy after discounts, a game that sells 3 million copies would generate about $120 million — well short of the roughly $254 million needed to cover the original cost, a baseline return, and marketing.
It remains to be seen whether 3D Investment’s presentation will influence Square Enix’s strategy. In a message to other shareholders published via Business Wire, 3D Investment Partners asked investors to read the presentation and share candid feedback on the company’s strategy, capital allocation, portfolio, governance, and growth opportunities so those views can be conveyed to the Square Enix Holdings board.
A former Square Enix executive has said the company would “love” to make more games from creators like Yoko Taro, but added that, setting aside the handful of profitable Nier titles, the audience for such projects is often too small to justify their high production costs.
Source: gamesradar.com
