May 11, 2017 | by John
Square Enix Withdraws from IO Interactive (Update)

UPDATE: In the original story, I wrote that Square Enix lost 43 million last fiscal year from IO underperforming. Instead, Square loses 43 million by withdrawing from IO, but will most likely recoup that (and then some) by selling the developer.

ORIGINAL STORY:

IO Interactive, the developers of VGCC’s #2 GOTY Hitman, seemed to be doing pretty well. However, things are not as they seem, as Square Enix, IO’s parent company, has decided to cut ties and move on from the developer.

In a “Notice of Booking of Extraordinary Loss“, Square Enix points out just how deep in the hole IO had made them.

To maximize player satisfaction as well as market potential going forward, we are focusing our resources and energies on key franchises and studios. As a result, the Company has regrettably decided to withdraw from the business of IO INTERACTIVE A/S, a wholly‐owned subsidiary and a Danish corporation, as of March 31, 2017. This decision has resulted in booking of the extraordinary loss amounting to 4,898 million yen, including disposition of the content production account related to the business and impairment loss of intangible assets, in the financial results for the fiscal year ended March 31, 2017.

As a result of this the Company started discussions with potential new investors and is currently in negotiations to secure this investment. Whilst there can be no guarantees that the negotiations will be concluded successfully, they are being explored since this is in the best interests of our shareholders, the studio and the industry as a whole.

In short, IO has cost Square Enix about 43 million US dollars in the last fiscal year alone, and Square has decided to search for potential investors to pick up the reigns for IO. It’s good to see that Square didn’t just let IO crash and burn, but after the success of Hitman and the seeming inevitability of a season two of content for the game, it’s shocking to see how far in the red Square Enix was after the game came out. It’s also hard to tell where the future of Hitman itself will go, but we’ll see how it shakes out. Hopefully everyone lands on their feet!

John

John Michonski is Video Game Choo Choo's Editor in Chief. He's a fun man who likes to do good.

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