Square Enix Holdings: Reference Materials for the Three-Month Period Ended June 30, 2018

Square Enix Holdings’ financial results for the first quarter of the fiscal year ending March 31, 2019, reflect a period of year-over-year decline across most business segments. The company reported net sales of 45.4 billion yen and an operating income of 4.2 billion yen for the three-month period ending June 30, 2018. These figures represent a significant decrease from the 57.0 billion yen in net sales and 12.8 billion yen in operating income recorded during the same period in the previous fiscal year.

The Digital Entertainment segment, which serves as the primary revenue driver, experienced a notable downturn, with net sales falling to 32.4 billion yen from 44.1 billion yen in the prior year. This decline is attributed to the absence of new major game launches in the high-definition (HD) category, the lack of expansion disk releases for massively multiplayer online (MMO) titles, and underperforming smart device and PC browser games. Furthermore, the company faced a difficult year-over-year comparison due to the absence of one-time licensing fee payments that bolstered results in the previous year.

Conversely, the Amusement segment showed resilience, with net sales increasing slightly to 9.4 billion yen, supported by stable facility operations despite a lack of new machine launches. The Publication segment also saw growth in net sales, driven by strong performance in digital formats, which offset a decline in print media sales. Overall, the company’s consolidated balance sheet remained stable, with total assets of 244.7 billion yen as of June 30, 2018. Management maintains a cautious outlook, focusing on future title pipelines and operational refinements to improve performance throughout the remainder of the fiscal year.