Progress Report on the Medium-Term Business Plan (FY2025/3-FY2027/3)

Key insights

7 takeaways

01
Square Enix is shifting its Digital Entertainment strategy from quantity to quality by reorganizing into a Creative Studio structure and consolidating overseas development resources into Japan.See it on page 9
02
The company is executing a multi-platform strategy for major titles, with upcoming releases including 'Dragon Quest I & II HD-2D Remake' in June 2026 and 'Final Fantasy Tactics - The Ivalice Chronicles' in January 2027.See it on page 10
03
Structural reforms of overseas operations are projected to generate annual cost savings of over ¥3.0 billion starting in FY2027/3, supported by a new global marketing and data analytics organization.See it on page 13
04
Catalog title sales have shown consistent growth, rising from 14.66 million units in FY2024/3 to 19.10 million units in FY2026/3.See it on page 12
05
The Group has allocated ¥80–100 billion for strategic investments, including M&A, AI integration, and data marketing, while targeting a total shareholder payout ratio of 50.0% for FY2027/3.See it on page 22
06
Publication segment growth is being driven by global fan base expansion and video adaptations, with overseas sales in this segment increasing from ¥2.148 billion in FY2024/3 to ¥2.912 billion in FY2026/3.See it on page 15
07
Amusement business expansion is focused on diversifying formats in Japan and scaling overseas franchise stores, which grew from ¥109 million in sales in FY2024/3 to ¥1.496 billion in FY2026/3.See it on page 16

Summary

The Square Enix medium-term business plan for the fiscal years 2025 through 2027 outlines a comprehensive three-year "reboot" strategy designed to maximize corporate value through the cultivation and expansion of intellectual property. The core thesis centers on shifting from a volume-based approach to a quality-focused development model, optimizing the company’s development footprint, and diversifying earnings through strengthened customer touchpoints across gaming, publishing, merchandising, and amusement segments.

Key findings indicate that the company is successfully executing structural reforms, particularly within the Digital Entertainment segment, where it has transitioned to a Creative Studio structure and consolidated overseas resources. These efforts, combined with a multi-platform release strategy for major titles and growth in licensing revenue, have contributed to steady profit growth. Operating profit rose from 32.5 billion JPY in FY2024/3 to 54.7 billion JPY in FY2026/3, with an operating margin of 18.4% in the latter period. The company has also prioritized capital allocation, earmarking 80 to 100 billion JPY for strategic investments in AI, data infrastructure, and M&A, while maintaining a commitment to shareholder returns through dividends.

The scope of this plan is global, covering the company’s diverse portfolio of HD games, mobile content, MMOs, publications, and amusement facilities. Methodologically, the strategy relies on a "market-in" approach, utilizing data analytics and internal AI-driven process improvements to enhance productivity. Looking toward the fiscal year ending March 2027, the company aims to solidify its leaner, more resilient business foundation, targeting a 15% consolidated operating margin and an ROE of at least 10% to prepare for a subsequent phase of long-term growth.