Square Enix Holdings 1Q FY2020/3 Financial Results Briefing

Square Enix Holdings reported strong financial results for the first quarter of the fiscal year ending March 31, 2020, characterized by significant year-over-year growth in both net sales and operating income. The company achieved net sales of ¥53.3 billion, an increase of 19.1%, and operating income of ¥7.1 billion, an 85.8% rise. These results were driven by robust performance across multiple business segments, particularly within Digital Entertainment, which benefited from increased subscriber numbers for the MMO title Final Fantasy XIV and strong sales of existing smart device games like Romancing SaGa Re;universe.

The company implemented a notable change in accounting policy starting in the first quarter of fiscal year 2020, shifting from a one-month lag in revenue recognition for digital content to same-month recognition. This adjustment was designed to better align financial reporting with actual economic conditions. While this change necessitated a retroactive adjustment to the prior year’s figures, the underlying operational performance remained positive, supported by growth in the Publication and Merchandising segments. The Publication segment, in particular, outperformed initial expectations due to the success of digital manga platforms such as Manga UP!.

Looking forward, the company is prioritizing a rich content pipeline, evidenced by a content production account that grew to ¥58.1 billion. Management is focused on developing titles for next-generation consoles and expanding the reach of HD games through multiplatform strategies and localized digital releases. Despite a lack of major new HD game launches during the first quarter, the company maintains a positive outlook for the remainder of the fiscal year, supported by upcoming releases and continued investment in its intellectual property portfolio.