Yesterday Square Enix reported a 76.6% drop in profits from this time last year. In the current fiscal year, the company has had only two million-selling titles, Dragon Quest Monsters: Joker 2, which was released only in Japan, and Kane & Lynch 2, which of course is an Eidos property. It's almost certain that the disastrous and ill-conceived launch of Final Fantasy XIV has a lot to do with the company's steep financial decline. All this should lead longtime JRPG fans to wonder whether the one-time leaders of the genre have lost the magic.
There are some changes that, at least from the outside, appear both essential and easy. Kill Final Fantasy XIV, admit it was a mistake, and move on. Stop milking Kingdom Hearts before it becomes as meaningless as Final Fantasy has become. Re-evaluate whether re-releasing your back catalog on every imaginable platform is actually profitable.
But those are all just stabilizing measures. What Square Enix really needs is something fresh and new that will capture imaginations in the same way that Kingdom Hearts did. But given its current financial peril, it can't just try to make another Kingdom Hearts, i.e. a big-budget epic bolstered by one of the most expensive licenses on the market. Instead, it needs to take a small project and turn it into a hit.
Of course that's not much different from saying they need to make lightning strike with pinpoint accuracy. But there are at least some guidelines they could keep in mind. Look to emerging platforms like iOS and Android. Take a chance on young, untested talent rather than giving a stalwart like Nomura final say in creative matters. Don't put so much faith in well-worn genres, or at least the purest examples of those genres. There are lots of clones out there these days, and people aren't going to buy one more because it has Square Enix's name on it.
As a long-time Final Fantasy fan myself, I want to see Square Enix succeed. But I want to see them do it like the revolutionary company they once were--not the benighted old guys they seem to have become.