Square Enix Annual Report 2022

Square Enix’s 2022 fiscal year was defined by record-breaking financial performance and a major strategic pivot toward long-term technological transformation. For the period ending March 31, 2022, the company achieved net sales of ¥365.3 billion, representing a 9.8% increase, while profit attributable to owners of the parent surged by 89.3% to ¥51.0 billion. This growth was primarily driven by the Digital Entertainment segment, which generated ¥279.7 billion, supported by the enduring popularity of major intellectual properties like the Dragon Quest and Kingdom Hearts series.

To sustain this momentum, the company is actively restructuring its portfolio to address rising development costs and volatility in the global market. A central component of this strategy is the $300 million divestiture of select Western studios, including Crystal Dynamics and Eidos Interactive, to the Embracer Group. This move is intended to optimize capital allocation, allowing the company to concentrate resources on high-growth emerging technologies, specifically blockchain, artificial intelligence, and cloud-based gaming. By prioritizing recurring revenue streams from MMOs and mobile titles, the company aims to mitigate the risks associated with large-scale HD game development.

Beyond financial and operational shifts, the company maintains a robust commitment to corporate governance and sustainability. Following its transition to the Tokyo Stock Exchange Prime Market, the organization has strengthened its oversight through an independent Audit & Supervisory Committee and a Remuneration & Nomination Committee. Furthermore, the company is pursuing environmental goals, including a target for net-zero CO2 emissions by 2030, while fostering a flexible, inclusive work environment for its staff. Through these integrated efforts in technology, governance, and human capital, the company seeks to secure its position as a leader in the evolving global digital entertainment landscape.