Square Enix's H1 sales dip to $1.1 billion, but profits up

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Square Enix has released its results for the first half of its financial year, showing a slight decline in sales but an overall improvement in profit.

For the six months ended September 30th, Square Enix reports net sales of ¥163.4 billion ($1.1 billion) and profit attributable to owners of parent at ¥39.5 billion ($269.9 million).

The numbers

Overall results

• Net sales: ¥163.4 billion ($1.1 billion, down 3.3% year-on-year)
• Operating income: ¥26 billion ($177.6 million, down 10.6%)
• Ordinary income: ¥45.1 billion ($308.1 million, up 43.5%)
• Profit attributable to owners of parent: ¥39.5 billion ($269.9 million, up 71.7%)

Digital Entertainment

• Net Sales: ¥117.1 billion ($800 million, down 9.5%)
• HD games: ¥29.4 billion ($200.8 million, down 29.6%)
• Mobile/PC: ¥59 billion ($403 million, down 5%)
• MMO: ¥28.6 billion ($195.4 million, down 3.1%)
• Operating income: ¥24.5 ($167.4 million, down 16.7%)

The highlights

The big releases from Square Enix's Digital Entertainment segment, which handles its video games business, included Dragon Quest X and Live A Live, but these titles earned less than the new launches from the same period last year – most notably, Outriders and Nier Replicant.

As a result, the division's sales dropped to ¥117.1 billion ($800 million), down 9.5% from the first half of FY 2022 which was already suffering comparisons from the launch of Final Fantasy 7 Remake the year before.

The decline in HD game sales was buffered by a rise in net sales for MMOs, thanks primarily to the rise in paying subscribers for Final Fantasy 14.

Meanwhile, the mobile and browser division saw sales decline year-on-year after the August debut of Fullmetal Alchemist Mobile failed to compensate for the weak performance of previously released titles.

Net sales and operating income for the publisher's Amusement, Publication and Merchandising divisions all rose, but not enough to prevent overall decline.

In its consolidated results, Square Enix reported that the conclusion of a contract to "divest select overseas studios and intellectual property" contributed to the 72% year-on-year rise in profits.

This is likely a reference to the publisher's sale of Crystal Dynamics, Eidos Montreal and Square Enix Montreal to Embracer Group for $300 million.