Square Enix Holdings Financial Results: Six-Month Period Ended September 30, 2022

Square Enix Holdings reported financial results for the first half of the fiscal year ending March 31, 2023, reflecting a period of structural transition and portfolio realignment. The company recorded net sales of ¥163.3 billion and operating income of ¥26.0 billion, both representing year-over-year declines. Conversely, ordinary income rose to ¥45.1 billion and profit attributable to owners of the parent increased to ¥39.4 billion, largely bolstered by foreign exchange gains and the divestiture of select overseas studios and intellectual property.

Performance across business segments was mixed. The Digital Entertainment segment, the company’s primary revenue driver, saw declines in both net sales and operating income within its HD Games sub-segment due to lower earnings from new titles compared to the previous year. While the MMO sub-segment benefited from increased subscriber numbers for Final Fantasy XIV, the Games for Smart Devices/PC Browser sub-segment struggled to offset weakness in existing titles. In contrast, the Amusement segment experienced significant growth, with sales exceeding pre-pandemic levels, while the Publication and Merchandising segments also reported year-over-year gains.

Management is currently prioritizing a medium-term strategy focused on strengthening the company's intellectual property ecosystem, optimizing business structures, and expanding into new domains, specifically blockchain entertainment and cloud-based services. Despite these strategic shifts, the company refrained from providing full-year financial forecasts for the fiscal year ending March 31, 2023. This decision stems from ongoing uncertainties regarding the costs associated with recent divestitures, global supply chain disruptions affecting game releases, foreign currency volatility, and unpredictable macroeconomic consumption trends. Nevertheless, the company maintains its objective of achieving year-over-year growth in sales and profits through the release of multiple new titles in the second half of the fiscal year.