Square Enix FY2006 Results Briefing

Square Enix’s fiscal year 2006 results, ending March 31, 2007, reflect a period of successful operational restructuring and strong international performance. The company reported consolidated net sales of ¥163,472 million and an operating income of ¥25,916 million, achieving a record post-merger recurring income of ¥26,241 million. Key drivers included robust overseas sales of major titles like Final Fantasy XII and Kingdom Hearts II, alongside strong domestic performance for handheld gaming devices. The company also completed significant restructuring of its Taito Corporation subsidiary, which involved closing unprofitable arcades, withdrawing from non-core businesses, and streamlining personnel to ensure a healthier asset structure.

The company’s strategy for the fiscal year ending March 31, 2008, focuses on maintaining steady growth while addressing the challenges of a shifting global market. Projections for the upcoming year estimate operating income at ¥21 billion, with a continued emphasis on self-publishing in North American and European markets to capture a larger share of the global industry. Management identified the expansion of international operations and the development of common game engines as critical pillars for future competitiveness. By leveraging its proprietary intellectual property across multiple media formats, the company aims to move toward a long-term recurring income target of ¥50 billion.

Financial health remains a priority, evidenced by a strong balance sheet with ¥99,852 million in cash and deposits. The company intends to utilize these funds to build a more robust business structure capable of generating consistent earnings. While the domestic market for traditional gaming remains stable, the company is actively diversifying its portfolio through online games, mobile content, and publication segments to mitigate risks and capitalize on cross-media opportunities.