Square Enix Profits Fall Despite Blockbuster Titles Launching

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Square Enix Profits Fall Despite Blockbuster Titles Launching

May 13, 2019

By: Robert N. Adams

 
 

Square Enix profits have gone down over the last year despite a number of blockbuster releases like Kingdom Hearts III and Shadow of the Tomb Raider. While they've certainly maintained a steady income of revenue (and beat last year's numbers by almost 7%), the increased cost of launching games combined with lackluster mobile games performance has led to a situation where they've made less of a profit overall.

GamesIndustry.biz reports that the fiscal year ending 2019 has seen Square Enix profits decline overall despite the otherwise healthy performance from their games. While their annual revenue of ¥204.59 billion ($1.87 billion) represents a 6.9% increase over the previous year, the increased cost of launching games caused the operating profit to fall by 33.1% to ¥29.06 billion ($266 million).

Several strong releases helped increase their revenue over the previous year. Kingdom Hearts IIIShadow of the Tomb RaiderJust Cause 4, and Octopath Traveller all performed splendidly in worldwide markets. Unfortunately, it also cost more money to get these games out the door. Square Enix profits were also negatively impacted by lower-than-expected performance from their mobile, browser, and MMORPG titles out on the market today.

A press release from Square Enix has some more details on their financials for last year. The amusements section of their business (think pachinko machines and the like) also had a similarly tumultuous year. Net sales rose as compared to the previous Fiscal Year, but operating income fell in this category as well. Square Enix largely attributes the decline due to the need for them to replace machines that were getting a little old.

 
 

Square Enix, meanwhile, has committed to streamlining their operations and lowering the cost of getting new games developed. Current employees need not worry too much; the Japanese-based developer added that they are not planning on any layoffs in order to cut costs.

Despite this unfortunate news, Square Enix may have a stronger performance this year thanks to the launch of some hotly-anticipated titles. We may very well be getting our hands on the Final Fantasy 7 remake before the end of this fiscal year in March 2020, although it might not be exactly what fans wanted.

What do you think of the decline in Square Enix profits over the last year? Do you think the company can recover and streamline their costs? Let us know in the comments below!

A photograph of Robert N Adams
Senior Writer

I've had a controller in my hand since I was 4 and I haven't stopped gaming since. CCGs, Tabletop Games, Pen & Paper RPGs - I've tried a whole bunch of stuff over the years and I'm always looking to try more!

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