Square Enix Holdings Results Briefing: Six-Month Period Ended September 30, 2010

The Square Enix Holdings results briefing for the six-month period ended September 30, 2010, outlines the company’s financial performance and strategic progress during a challenging fiscal environment. Consolidated net sales reached ¥68,056 million, with operating income of ¥5,712 million. While sales fell below initial forecasts due to a slower release schedule for new titles, operating income exceeded expectations, bolstered by profitable carryover sales from major titles released in the prior fiscal year and strong performance in the publication segment. The company reported a net income of ¥1,723 million, impacted by foreign exchange losses and specific accounting adjustments.

The company’s strategic focus remains centered on three pillars: globalization, a transition to network-centric business models, and the strengthening of intellectual property. Globalization efforts include a strategic partnership with Shanda Games to enter the Chinese online gaming market and the appointment of new leadership for the U.S. subsidiary. In the network-centric space, the company is navigating the launch of Final Fantasy XIV, acknowledging that initial customer reception fell short of expectations and committing to significant updates to regain user trust. Conversely, browser-based titles like Sengoku IXA and community services like Nicotto Town have demonstrated successful growth.

Regarding intellectual property, the company is actively re-evaluating its portfolio, utilizing reboots and derivative titles to revitalize existing franchises while simultaneously experimenting with new brands. Despite the mixed performance of recent releases, the company maintains its full-year forecasts for the fiscal year ending March 31, 2011, projecting net sales of ¥160,000 million and operating income of ¥20,000 million. The company continues to prioritize the stabilization of its network services and the execution of its global development pipeline to drive future growth.