Square Enix's stock has dropped 30% since its peak earlier this year, erasing nearly $2 billion from the company's market value.
The share price of the Japanese publisher reached its highest point this year in the days leading up to the release of Final Fantasy 16 in June, but it closed on Wednesday at its lowest level since May 2022.
The decrease comes after sales of the PS5 game reportedly became small of the company's high expectations.
However, it follows the underwhelming performance of other big budget releases such as 2020's live service flop Marvel's Avengers, whose support will be discontinued this month, and Forspoken, the debut game from Square Enix's Luminous Productions studio, which launched to "lacklustre" sales, according to the company.
Anonymous employees and contractors claimed Square Enix is having problems with the organization's game development structure and quality control in a Bloomberg article analyzing the company's recent downturn, and analysts expressed concern about its longer-term prospects.
Michael Prefontaine, a Tokyo-based game developer and player who has worked on Marvel's Avengers, Forspoken, and The DioField Chroniclel, said that flooding the market with unfinished, subpar, or untested games is a bad idea. "Without adequate oversight, the company overstretched itself on too many titles."
According to current and former Square Enix workers, one of the reasons for these problems is Square Enix's choice to give individual producers an excessive amount of control over the scope and direction of projects. Additionally, they claimed that poor team organization and documentation had a negative impact on games.
According to Macquarie Capital Securities Japan analyst Yijia Zhai, "We continue to be concerned with the company's game development structure and game quality control, which could limit the longer-term performance."
In addition to two pieces of paid DLC, Square Enix earlier this month revealed that Final Fantasy 16 is being developed for the PC.