Square Enix Annual Report 2021

Square Enix achieved record financial performance during the fiscal year ending March 31, 2021, demonstrating resilience despite the global disruptions caused by the COVID-19 pandemic. Consolidated net sales rose 27.6% to ¥332.5 billion, while operating income increased 44.2% to ¥47.2 billion. This growth was primarily driven by the Digital Entertainment, Publication, and Merchandising segments, which successfully leveraged intellectual property and accelerated a transition toward digital distribution. While the Amusement segment faced operating losses due to mandatory facility closures, the company maintained a strong liquidity position with ¥144.1 billion in cash and equivalents, supporting a strategy of sustained investment in large-scale content development and recurring revenue models.

The company’s strategic focus centers on balancing a diversified portfolio of AAA titles and smaller projects with recurring income streams from MMOs and mobile gaming. Management has established ambitious medium-term targets of ¥400–500 billion in net sales and ¥60–75 billion in operating income, to be achieved through geographic expansion, cloud-based sales channels, and global talent acquisition. To mitigate industry volatility and rising development costs, the firm maintains a conservative financial approach, utilizing hedging strategies and rigorous oversight of content production accounts.

Corporate governance remains a cornerstone of the organization, characterized by an Audit and Supervisory Committee composed entirely of independent outside directors. This structure, supported by a Remuneration and Nomination Committee, ensures transparency in executive compensation and operational execution. Furthermore, the company is increasingly integrating environmental, social, and governance initiatives into its core operations, emphasizing digital distribution to reduce environmental impact and implementing flexible work policies to foster sustainable growth. Through these measures, the company aims to enhance long-term corporate value while maintaining a shareholder-focused dividend policy.