Square Enix Holdings Results Briefing: Six-Month Period Ended September 30, 2011

Square Enix Holdings reported financial results for the six-month period ending September 30, 2011, demonstrating performance in line with revised forecasts. The company achieved net sales of ¥57,516 million, operating income of ¥7,391 million, and net income of ¥3,704 million. While results were generally above initial projections, the company maintained a conservative outlook for the second half of the fiscal year, opting not to revise its full-year forecasts. Financial performance was bolstered by the strong release of Deus Ex: Human Revolution and growth in web and smartphone content, though results were tempered by foreign exchange losses due to the appreciation of the Japanese yen.

The company’s strategic focus centers on three pillars: globalization, a transition to a network-centric business model, and the strengthening of proprietary intellectual properties. To support these goals, Square Enix is expanding its presence in emerging markets and enhancing operations in North America and Europe. The network-centric strategy emphasizes the development of social games, the expansion of massively multiplayer online titles like Dragon Quest X and Final Fantasy XIV, and the implementation of post-launch downloadable content to extend the lifecycle and profitability of packaged games.

Management noted that the industry is shifting away from a reliance on initial unit sales toward models that incorporate ongoing digital revenue. Consequently, the company has implemented rigorous quality control standards, resulting in the cancellation of projects that fail to meet strict benchmarks. Despite these challenges, leadership expressed confidence that ongoing structural reforms and the development of ten major intellectual properties will position the group for future growth, even as the full financial impact of these initiatives is expected to materialize in subsequent fiscal years.