Square Enix has been having a bit of trouble as of late, which has resulted in a net income of -$148.4 million for the fiscal year which ended on the 31st of March, 2011. However, back in 2009 when they purchased a beleaguered Eidos, things were starting to look up for the company. They were expanding their opportunities while continuing to grow their existing properties and it culminated in releases such as Batman: Arkham Asylum, Final Fantasy XIII and Just Cause 2. It also saw their first increase in net income for a considerable amount of time. But, given Square Enix's rather frank admissions about their own quality, and the cancellation of so many unannounced products, without Eidos things would be so much worse. It could even be argued that Eidos is a primary factor in what's holding them together right now.
Since the Eidos takeover, there has been ten releases on both the PS3 and Xbox 360. Five of those releases are Eidos titles: Mini Ninjas, Batman: Arkham Asylum, Just Cause 2, Kane & Lynch 2: Dog Days and Tomb Raider Trilogy Pack. It doesn't seem too bad, until you consider that only one of remaining titles was made by Square Enix - Final Fantasy XIII. And the other titles are only subjectively good, with Star Ocean: The Last Hope International, Nier, Front Mission Evolved and MindJack. Supreme Commander 2 is the only one that received universal praise.
Those five titles don't just match Square Enix in terms of capacity, they've also contributed a lot of sales for the company. Their combined total is just shy of 9 million units, whereas the remaining titles contributed around 8 million (around 6.5 of which was from Final Fantasy XIII).
You can also look at the upcoming high profile releases to see how much Square Enix is utilising Eidos. You've got Deus Ex: Human Revolution, Tomb Raider, Hitman: Absolution and Thief IV, although that's never been formally announced. Elsewhere, from other parts of Square Enix, you have Final Fantasy XIII-2, Dungeon Siege III, Kingdom Hearts: Dream Drop Distance and Final Fantasy Type-0. Final Fantasy Versus XIII and Dragon Quest X are of course also in existence, but we've seen and heard very little about either of them. There's also no real indication about when they'll come out.
So out of the eight, or even ten, high profile upcoming releases, four are from Eidos. It's not difficult to see three of those four being the best selling either, especially in the West. Kingdom Hearts: Dream Drop Distance is unlikely to touch them and Dungeon Siege III/Final Fantasy Type-0 are loose cannons. Final Fantasy XIII-2 is the only sure fire hit for Square Enix outside of Eidos, but it's unlikely to sell anywhere near as well as Final Fantasy XIII did. The first Final Fantasy title in a generation is always the best selling, and the last sequel (Final Fantasy X-2), didn't perform as strongly as Final Fantasy X.
How could this have happened, though? At the time of the move, Square Enix were still considered to be a premier Japanese publisher and many people thought Square Enix were buying Eidos to strengthen their offering - so they could go for both Japanese audiences and Western ones. However, it looks as though the move was actually to mask their impending deficiencies. Yoichi Wada even noted that they anticipated their internal development to decline in quality - it's just declined more than expected.
There surely is nothing wrong with relying on Eidos. After all, they have some top quality games waiting in the wings and that's why they were bought in the first place. However, if Square Enix wish to assure their fans that things are alright, perhaps they should start focussing on their own internal studios and development. The company is called Square Enix, not Eidos, and generally when a company buys another, the subsidiary remains that, the subsidiary. It doesn't become the premium property. Saying that they will expand their social offerings and app development does little to reassure anyone, although if they need to do that to keep afloat it shouldn't be seen as a bad thing. But we'll be focussing more on that issue in the next of our articles which will look at what exactly is going wrong with Square Enix at the moment.
It should also be noted that Square Enix has put a bit of a focus on handhelds, but again, we will cater to that in another upcoming article.