Square Enix's Q1 profits rise 68% to $72m despite sales decline
Digital Entertainment net sales fell 29%, with sales of new titles dropping 18%
Square Enix released its financial earnings for the three months ended June 30, 2024, reporting a significant decrease in net sales compared to the previous fiscal quarter.
The publisher attributed the drop in its Digital Entertainment revenue – which encompasses its video games business – to a decline in sales of new titles in Q1 2025, including SaGa: Emerald Beyond and the Steam launch of the HD remastered collection of Kingdom Hearts.
The numbers
- Net sales: ¥69.9 billion ($477 million), down 18.4% year-on-year
- Profit: ¥10.6 billion ($72.3 million), up 68.6% year-on-year
- Digital Entertainment net sales: ¥43.9 billion ($299 million), down 29.6% year-on-year
The highlights
Square Enix's HD games subsection generated ¥12.3 billion ($83.8 million) in net sales compared to the ¥29 billion ($197 million) generated during the same period last year. Final Fantasy 16 and Final Fantasy Pixel Remaster were released during this time which bumped its revenue significantly.
However, it did note that the HD games sub-segment "turned profitable on lower development cost amortisation and advertising expenses" compared to Q1 last year.
Net sales also declined in the mobile and PC browser sub-segment "mainly due to the weak sales of existing titles", but the publisher noted an increase in profits "due to the optimisation of operational expenses."
As for its MMO sub-segment, net sales and profits rose compared to the same period during the previous fiscal year.
Elsewhere, Square Enix's amusement segment experienced a 13.9% rise in net sales to $103 million as a result of a "year-on-year increase in same-store sales."
Looking ahead, the company saw no changes in its forecast for the full year, which were announced during its financial report on May 13.
Square Enix also announced a round of layoffs as part of restructuring in May, which affected an unknown number of staff in its publishing, IT, and indie divisions within America and Europe.
This was due to a disappointing financial year in which many of the publisher's titles "failed to live up to profit expectations, especially outsourced titles and some AAA titles."