Square Enix Holdings 3Q FY2020/3 Financial Results Briefing

Square Enix Holdings reported strong financial growth for the first three quarters of the fiscal year ending March 31, 2020. The company achieved net sales of ¥189.7 billion, an increase of ¥8.1 billion year-over-year, and operating income of ¥27.7 billion, representing a significant gain of ¥15.4 billion. This performance was driven by robust results in the Digital Entertainment segment, specifically within the MMO and smart device sub-segments, alongside notable growth in the Publication and Merchandising divisions.

The Digital Entertainment segment, the company’s primary revenue driver, saw operating income rise to ¥29.5 billion. While the HD Games sub-segment faced challenges due to a difficult year-over-year comparison with previous major releases, the MMO sub-segment benefited from the release of expansion packs for Final Fantasy XIV and Dragon Quest X. Additionally, the smart device sector saw strong contributions from titles such as Romancing SaGa Re;univerSe and Dragon Quest Walk. The Publication segment also performed well, bolstered by increased digital and print sales, while the Amusement segment maintained steady operating income despite a lack of major new machine launches.

Despite exceeding initial operating income plans for the first three quarters, management opted to maintain its existing consolidated earnings guidance for the full fiscal year. This cautious outlook stems from market uncertainties surrounding the upcoming 2020 holiday season, specifically the impact of next-generation console launches and shifting release schedules for competitor AAA titles. The company intends to continue its selective approach to mobile game development while leveraging backward compatibility to support both current and next-generation consoles for upcoming titles.