Square Enix Holdings: Results Briefing for the Fiscal Year Ended March 31, 2009

Square Enix concluded the fiscal year ending March 31, 2009, with net sales of 135.7 billion yen and a net income of 6.3 billion yen. Despite facing inventory evaluation losses, these financial results aligned with management forecasts. The company is currently undergoing a significant structural transformation, highlighted by the acquisition of Eidos Ltd. and a reorganization of business segments to better align with a digital-first, online-oriented strategy. This shift aims to facilitate global expansion and improve operational efficiency across diverse device and media outlets.

The core strategic focus centers on globalizing the games segment by integrating Eidos’s development expertise to penetrate international markets more effectively. Simultaneously, the amusement segment is mitigating risk by reducing fixed assets and prioritizing the development of cost-effective, high-return arcade hardware. These efforts are complemented by a pivot in the mobile division toward smartphone platforms, which bypasses the technical limitations of previous porting methods. Furthermore, the company is diversifying its revenue streams by expanding its merchandising segment through the licensing of prominent third-party intellectual properties, including Disney and Peanuts.

Looking toward the 2010 fiscal year, the company anticipates record income growth. This optimism is driven by a robust pipeline of major franchise releases and the anticipated synergies resulting from the full integration of the Eidos business. By balancing the high production costs associated with its successful animation-to-game adaptation cycle with a more streamlined global framework, the company is positioning itself to capitalize on evolving consumer behaviors and the increasing demand for community-oriented digital entertainment.