Personally, I think the games sold fine; it was the internal expectations that were completely out of whack.
But Eidos Montreal founder Stephane D'Astous says in fact, Square Enix just doesn't know how to sell their games. Perhaps this is why he left the studio he created; remember that Square Enix now owns Eidos Montreal.
In a new Polygon interview , D'Astous said that Square Enix has some really great games, but they just just don't know how to generate high sales for those titles:
"We are in a situation that we have great games that could have sold more. They need to attack that very, very seriously. Last year was supposed to be a home-run season, but we didn't hit a single home run; maybe a double or a triple, but they weren't home runs."
Hitman: Absolution and Tomb Raider managed to sell about 3.5 million copies each, and Sleeping Dogs sold 1.75 million. However, all failed to reach the internal targets and then, Square Enix president Yoichi Wada resigned after the company posted "extraordinary losses." D'Astous also attacked Square Enix's lack of structure:
"The lack of leadership, lack of courage, and the lack of communication were so evident, that I wasn't able to conduct my job correctly. I realized that our differences were irreconcilable, and that the best decision was unfortunately to part ways."
Yeah, well, we could've told you that. Just look at the last decade, or pretty much ever since Squaresoft merged with Enix. It didn't start out too badly but this past generation has been a disaster. The worst part is that they do put out some really awesome games; Deus Ex: Human Revolution is another one. But those aren't internally developed and what is internally developed either takes seven million years to complete or ends up disappointing everyone. Talk about a "lack of communication…"
Short version? They're messed up.