Square Enix Holdings released their Consolidated Financial Results for the first quarter (April-June) of the 2024 financial year. The release of Final Fantasy XVI on June 22, 2023 increased sales for Square Enix, but profits decreased due to the burden of recovering development costs, and the weakness of existing titles. [Thanks, 4Gamer!]
According to the financial results, sales for Q1 2023 reached ¥85,669 million yen, resulting in a 14.4% increase compared to Q1 2022. Meanwhile, Operating and Ordinary income saw a drastic decrease. Operating Income turned ¥3,097 million yen, a decrease of 78.5% year-over-year, while Ordinary Income saw a decrease of 65.0% year-over-year, with ¥9,178 million yen earned.
Looking at different segments, the Digital Entertainment business reported higher sales but lower profits, while sale of HD games increased due to the release of Final Fantasy XVI, and the console release of the Final Fantasy Pixel Remaster games. Revenue for MMOs, smartphone, and PC browser content also decreased, with mobile game Dragon Quest Champions failing to make up for existing titles.
During the financial results presentation, Square Enix cited recouping development costs as the reason behind profits declining in the Digital Entertainment business during the first financial quarter of 2023. Compared to Q1 2022, the Amusement business reported higher sales and profits; sluggish sales of digital and paper media translated into a decrease in sales and profits for the Publishing business; the Merchandising business reported higher sales and profits due to strong sales of character goods for the company’s leading IPs.
Square Enix’s last financial report showed that the company had seen a decrease in sales for the totality of the previous fiscal year 2023, while showing a great increase in sales of merchandise.
