Square Enix Financial Results Briefing: Fiscal Year Ended March 31, 2023

Square Enix Holdings reported a decline in financial performance for the fiscal year ended March 31, 2023. The company recorded net consolidated sales of ¥343.2 billion and operating income of ¥44.3 billion, representing year-over-year decreases of ¥22.0 billion and ¥14.9 billion, respectively. These results were primarily driven by underperforming titles in the Digital Entertainment segment, specifically within the HD Games and Games for Smart Devices/PC Browser sub-segments, as well as a lack of new expansion packs for the company’s MMO offerings.

The company’s business segments showed mixed results. While the Digital Entertainment segment faced significant headwinds, the Amusement segment saw growth in both sales and profits due to strong same-store performance. The Publication segment maintained steady sales, though profitability was impacted by rising costs for printing paper and increased advertising expenditures. The Merchandising segment experienced higher net sales from character merchandise, yet saw a decline in operating income due to shifts in the sales mix.

To address these challenges, management is prioritizing the consolidation of development resources, including the merger of Luminous Productions into Square Enix Co., Ltd., to improve efficiency and focus on high-potential AAA titles. The company is also shifting its publishing strategy toward a more market-oriented approach and expanding into new domains such as blockchain and AI. Despite the recent downturn, the company has established medium-term earnings targets of ¥400–500 billion in net sales and ¥60–75 billion in operating income. For the upcoming fiscal year, the company forecasts net sales of ¥360 billion and operating income of ¥55 billion, reflecting ongoing investments in personnel and development infrastructure.