FinancialSquare Enix
Square Enix Annual Report FY2009
1 Jul 200960 pages~164 min full read
Square Enix acquired Eidos Ltd. for £84.3 million in 2008 to integrate Western intellectual properties like Tomb Raider and Hitman into its portfolio as part of a globalization strategy.
Fiscal year 2009 performance saw net sales decline 8.0% to ¥135,693 million and net income drop 31.1% to ¥6,333 million, impacted by arcade segment contraction and inventory valuation losses of ¥5,368 million.
On October 1, 2008, the company transitioned to a holding company structure, Square Enix Holdings Co., Ltd., to better manage its diverse gaming, mobile, and publishing operations.
Despite financial declines, the company maintained a strong liquidity position with ¥111.9 billion in cash and a net asset ratio of 69.1%, supporting a dividend of ¥30.00 per share.
Management set a 2010 net sales target of ¥180,000 million, focusing on media convergence and network-compliant entertainment to transition into a diversified global provider of digital content.
The company’s capital base broadened significantly between 2004 and 2009, characterized by an increase in institutional and foreign investment.
Square Enix faced a challenging fiscal year ending March 31, 2009, characterized by a global economic downturn and shifting consumer preferences. Net sales fell 8.0% to ¥135,693 million, while net income dropped 31.1% to ¥6,333 million. This decline was largely driven by a contraction in the amusement arcade segment and lower offline game sales, further exacerbated by a ¥5,368 million loss on inventory valuation and significant foreign exchange losses. Despite these headwinds, the organization maintained a strong liquidity position with ¥111.9 billion in cash and a net asset ratio of 69.1%, allowing for a consistent dividend of ¥30.00 per share.
To counter domestic stagnation and a Japan-centric export model, the company underwent a major structural and strategic transformation. On October 1, 2008, it transitioned to a pure holding company structure, Square Enix Holdings Co., Ltd., to better manage its diverse gaming, mobile, and publishing operations. Central to its globalization strategy was the £84.3 million acquisition of Eidos Ltd., which integrated major Western intellectual properties like Tomb Raider and Hitman into the portfolio. This move aims to establish a truly global enterprise by leveraging Western market presence alongside traditional RPG strengths.
Looking forward, management has set a 2010 net sales target of ¥180,000 million, focusing on media convergence and network-compliant entertainment. While the 2009 period saw increased capital expenditures and rising unfunded retirement obligations, the shift toward institutional and foreign investment—which rose significantly between 2004 and 2009—reflects a broadening capital base. By aligning with new Japanese accounting standards and consolidating its international footprint, the group intends to transition from a traditional publisher into a diversified global provider of digital content and community management.
