Square Enix Announces Declining Financial Results & Strategy to Strengthen Development & Blockchain

Square Enix announced its financial results and they're down across the board. The house of Final Fantasy also spelled out its plans to bolster its game development capability and accelerate its blockchain game business.😶


Published: May 12, 2023 6:53 AM /

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Square Enix Logo

Today Square Enix announced its financial results for the full fiscal year between April 2022 and March 2023. 

Net sales for the whole company were 343,267 million yen (down 6.0% year-on-year) while operating income was 44,331 million yen (down 25.2% year-on-year). 

Speaking of the Digital Entertainment business, which includes video games, sales were 245,548 million yen (down 12.2% year-on-year) and operating income was 41,253 million yen (down 30.0% year-on-year). 

HD Games did not manage to generate the same level of earnings compared to the previous year despite the release of Forspoken, Crisis Core: Final Fantasy VII Reunion, Octopath Traveler II, and more. 

The MMO business did not have a new expansion for Final Fantasy XIV, so sales were naturally lower. The smartphone games business saw weak performance of existing titles. 

That being said, the company expects things to improve considerably during the current fiscal year (between April 2023 and March 2024) and forecasts sales between 400 and 500 billion yen and operating income between 60 and 75 billion yen.

The strategy going forward in the Digital Entertainment business focuses on strengthening in‐house development resources and enhancing global publishing as follows:

  • Consolidate group resources on major projects, through Luminous Productions merger etc.
  • Achieve optimal allocation of internal development resources with focus on AAA titles
  • Overhaul structure for developing smart device games by realigning internal organization
  • Step up hiring of engineers and other development talent (to develop not only HD and smart device games but also content for future cross‐platform offerings)
  • Bring talented external development resources into the Group (consider M&A, creating new studios, taking minority stakes)

Square Enix also intends to double down on its blockchain entertainment plans with the following initiatives to accelerate its development capability in the field:

  • Being a pioneer is key to achieving overwhelming success
  • Release titles to validate business models and monetize simultaneously (Organic)
  • Continue to pursue investments globally (Inorganic)
  • Explore business structure/earnings potential of NFT business
    • Shi‐San‐Sei Million Arthur
      • Issue NFTs, release game content
  • Explore businesses leveraging public blockchains
    • SYMBIOGENESIS (In development)
      • Our first sales of NFT collectible art featuring new IP
  • Investment selection policy
    • Prioritize strategic returns to the entire business and select companies capable of providing a stronger commitment as a business partner
    • Minimize downside risk by taking minority stakes; primarily select start‐ups, placing focus on gaining insight into/exploring the domain
  • Diversification of Investment Vehicle
    • Considering establishing a Corporate Venture Capital (CVC) unit
  • Preparing to establish an overseas entity
    • Create a Web3 business

If you'd like to compare these results with historical data, you can check out our dedicated article on the first nine months of the fiscal year, based on data published by Square Enix in February.

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More Info About This Game
Learn more about Forspoken
Game Page Forspoken
Developer
Luminous
Publisher
Square Enix
Platforms
PC, PlayStation 5
Release Date
January 24, 2023 (Calendar)
Genre
Action RPG
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