Square Enix Holdings Financial Results: Fiscal Year Ended March 31, 2010

Square Enix Holdings achieved record-high operating and recurring income for the fiscal year ending March 31, 2010, propelled by the robust commercial performance of major titles such as Dragon Quest IX, Final Fantasy XIII, and the distribution of Batman: Arkham Asylum. Despite these financial milestones, the company initiated a comprehensive asset re-examination, leading to substantial charges related to goodwill amortization and inventory valuation. These actions reflect a strategic pivot from post-merger integration toward addressing earnings plateaus and preparing for a fundamental transformation of the corporate business model.

The company’s mid-term growth strategy centers on three pillars: aggressive globalization, a transition toward a network-centric service model, and the fortification of core intellectual properties. To facilitate this shift, management has executed significant organizational restructuring, including the integration of Eidos, strategic headcount adjustments, and balance sheet optimization. These efforts are designed to establish a foundation for expansion into emerging markets and to shift the focus of the business toward recurring revenue streams derived from community management and digital services.

Looking ahead to the fiscal year ending March 2011, the company anticipates a period of contraction, forecasting net sales of ¥160 billion and operating income of ¥20 billion. This projected decline is attributed to the intensive costs associated with the ongoing business transformation. By prioritizing the scaling of existing franchises and the development of new, globally oriented intellectual properties, the organization aims to move past this transitional phase and establish a sustainable, network-driven growth trajectory within the international gaming landscape.