Square Enix says that sales of the new IP have been lackluster.
A girl with her back to the camera looks towards a domed building in the distance.

Square Enix flatly admitted that many of the studio's recent game releases underperformed in sales. Square Enix's Outline of Results Briefing held on February 3, 2023 shared some preliminary financial results for Q1-Q3 of the current fiscal year, which ends on March 31, 2023. The main focus was on the most recent quarter which ran from October 2022 through December 2022. This briefing was held just one week after the release of Forspoken.

The outline covers several topics, with at least one section dedicated to how several "small and mid-sized titles" failed to meet sales expectations. The following is a statement from still-current Square Enix president Yosuke Matsuda.

Net sales declined YoY in the HD Games sub-segment, partly because the release of major titles a year earlier had created a challenging YoY hurdle, but also because many of the new small and mid-sized titles we launched this year did not perform as well as we had expected.
Matsuda is set to leave as Square Enix president next summer with Takashi Kiryu set to take on the role.

Beyond the vague "small and mid-sized titles" moniker, specific titles were not mentioned. However, RPGsite.net includes a list of titles released in the October-December 2022 window that could fit the bill. Those titles include: The DioField Chronicle, Star Ocean The Divine Force, Harvestella, Tactics Ogre: Reborn, Dragon Quest Treasures, Crisis Core -Final Fantasy VII- Reunion, and Valkyrie Elysium.

The outline later talks about an underperforming AAA release from Square Enix. That title is none other than Forspoken. Here is what Matsuda had to say about the Luminous Productions developed title.

Reviews of “FORSPOKEN,” which we released on January 24, 2023, have been challenging. However, the game has also received positive feedback on its action features, including its parkour and combat capabilities, so it has yielded results that will lead to improvement of our development capabilities of other games in the future. That said, its sales have been lackluster, and while the performance of new titles with February and March release dates will be the ultimate determinant, we see considerable downside risk to our FY2023/3 earnings.
Since this briefing was held in early February, Square Enix has already decided the fate of Luminous Productions. Luminous Productions staff have already started to be absorbed back into Square Enix. Forspoken was the studio's first, and only, release.

The briefing from Square Enix concludes with a note from the company where they hope fans "look forward to the blockchain games (they) plan to launch in FY2023/4 and thereafter."