Square Enix's H1 sales get a 5% bump as profits plummet

Sign up for the GI Daily here to get the biggest news straight to your inbox

Final Fantasy creator Square Enix released its financial earnings for the six months ended September 30, 2023.

The numbers

• Net sales: ¥172 billion ($1.1 billion), up 5% year-on-year
• Profit: ¥16.6 billion ($110 million), down 58% year-on-year
• Digital Entertainment net sales: ¥122 billion ($810 million), up 4% year-on-year

The highlights

Square Enix's Digital Entertainment division is broken down into HD Games, MMO, and mobile/PC browser sub-segments.

- HD Games

The HD Games subsection generated ¥43.7 billion ($290 million) in net sales, an increase of 49% compared to last year.

The revenue bump was attributed to the releases of new Final Fantasy game offerings, which included Final Fantasy Pixel Master – the retro release had sold three million units as of September.

But Square Enix's biggest HD Games release of the period was Final Fantasy 16, which released on June 22. The AAA RPG sold three million copies in just a few days.

In August, Square Enix president Takashi Kiryu said in a post-earnings call that Final Fantasy 16 did not meet sales expectations. The executive reportedly said that the slow adoption of Sony's PlayStation 5 console played a factor in the RPG's sales performance. This led investors to question publisher's strategy, with the company losing almost $2 billion in value as a result.

Square Enix's HD segment also saw the multiplatform release of Infinity Strash: Dragon Quest - The Adventure of Dai on September 28.

- Mobile/PC browser

Mobile/PC browser games amassed ¥54 billion ($358 million) for Square Enix during H1 FY2024, a decrease of 7% year-over-year.

The segment saw two releases, with the launch of Dragon Quest Champions on June 13 and Final Fantasy 7: Ever Crisis on September 7. The mobile Final Fantasy offering reached two million downloads a day after its release.

Square Enix has 18 games identified as "major operating titles" for the division.

- MMO

During the quarter, Square Enix MMOs made ¥24 billion ($159 million) in revenue, representing a drop of 16% year-over-year.

Square Enix said the segment's performance was due to decreasing sales for Final Fantasy 14 and Dragon Quest 10.

- Looking ahead

The publisher's earnings revealed that it sold 12.17 million games during the six months, down 29% year-on-year.

In its forecast, Square Enix continued to project its net sales of ¥360 billion ($2.4 billion) for the fiscal year ending in March 2024, representing a 5% rise year-on-year.

The firm noted that it will be formulating a new medium-term business plan in May 2024. Among the topics that it identified is the need to diversify its earnings sources and increase productivity.

Regarding new releases, the firm released Star Ocean: The Second Story R back on November 2. Meanwhile, Dragon Quest Monsters: The Dark Prince is poised to launch on December 1 and Final Fantasy 7 Rebirth, the second remake installment, is planned to launch on February 29, 2024.

In July, the company revealed that Final Fantasy 14 will come to Xbox in Spring 2024. It also announced last week that the MMO will receive a new expansion pack, Dawntrail, in the summer of 2024.

Sign up for the GI Daily here to get the biggest news straight to your inbox