Square Enix Holdings 2Q FY2021/3 Financial Results Briefing

Square Enix Holdings reported strong financial growth for the first half of the fiscal year ending March 31, 2021, driven primarily by robust performance in its Digital Entertainment segment. The company achieved net sales of ¥172.7 billion, an increase of ¥52 billion year-over-year, and operating income of ¥31.6 billion, up by ¥15.7 billion. This growth was supported by successful console releases, including Final Fantasy VII Remake, and strong contributions from mobile titles such as Dragon Quest Walk and Dragon Quest Tact.

The Digital Entertainment segment served as the primary engine for these results, with net sales reaching ¥142.4 billion. While the HD Games sub-segment benefited from major releases, it also faced challenges, specifically with Marvel’s Avengers, which underperformed relative to expectations and incurred significant development cost amortization and marketing expenses. Conversely, the MMO sub-segment maintained profitability through growth in paying subscribers, and the Publication segment saw substantial gains in both digital and print formats. The Amusement segment, however, struggled due to COVID-19-related facility closures, resulting in an operating loss of ¥1.6 billion.

Looking ahead, the company maintains a positive outlook for the full fiscal year, forecasting net sales of ¥290 billion and operating income of ¥40 billion. Management intends to mitigate the inherent volatility of HD game development by leveraging recurring income from mobile and MMO titles. To address rising development costs for next-generation consoles, the company plans to optimize resources through automation and procedural content generation. Despite the challenges of creating new intellectual property in a competitive market, the company remains committed to this strategy as a core driver for long-term growth.