Square Enix has apparently canceled the Xbox 360 exclusive title, Gun Loco. The news first arrived via the company’s Japanese web site, but we have still have been unable to find out why the publisher has decided to deep six the title.

Gun Loco was described as an gun and run action shooter where “Survival is essential, but escape is the only thing that matters,” according to the trailer released for the title. The news is a blow to the Xbox 360 platform, as the title was an Xbox 360 exclusive that was slated for release this year.

The news is puzzling, but a source suggests that it could be related to the recent 77 percent fall in profits in the first nine months in fiscal 2010. This has led to a fall in earnings that the company has suggested is being caused by not only the economy, but ever increasing competition among companies for the player dollars and the ever higher rising costs of title development. It could be that this isn’t the last title that we will see Square Enix cancel, as the company tries to invest in the titles that have the best chance for a significant return on investment.

Square Enix has not exactly been quiet as of late, with the company announcing that they would like to set up a second Canadian studio in the months ahead with a new development team to fill the studio at some point next year. It is far too early to speculate what title this studio might be working on, but it has been suggested that it could be a new franchise.