Square Enix is taking the route many have before them when posting net losses of late. Essentially, if they are failing to make money on the console front, they say that it's the market's problem and not theirs. Square is reportedly down ¥5.7 billion for last year, though they predict a profit by the end of the fiscal year (likely due to iOS games, most of which will likely get bastardized over the years by these same companies).
Blaming the market itself rather than their own high budgets and poor quality of games is one of the biggest copouts in the industry right now. Game quality has sunk at many top studios, but more importantly, these studios keep inflating their own budgets to make games. This is especially true on visual fidelity, where a large chunk of the money is siphoned to. Even with games like Dishonored showing that you don't need those big budgets to create compelling games that sell, some companies still have it all backwards. Sure, extensive visual fidelity is important for some titles, but realistically an amazing experience can trump so many other flaws visually.
As an example, does anyone think Pokemon X and Y are not going to sell just because they look like early alpha Nintendo 64 games? Of course not, because the quality of the experience of the game itself trumps anything the visuals may lave wanting. Quality games continue to sell and move in the market while big budget gorgeous shit fests continue to sink. Fact is, developers need to notice these trends and correct them instead of pointing fingers at everyone else.