Square Enix embarking on "aggressive multiplatform strategy" as profits drop 70%
Square Enix has released its financials for the fiscal year ended March 31, 2024, with the results largely below what it had previously forecasted.
As a result, the firm is set to implement a brand new strategy going forward, hoping to achieve "stable profit generation" in its digital entertainment segment by 2027.
Square Enix's digital entertainment sales were ever so slightly up, mainly thanks to its HD Games sub-segment, the firm said. The solid performances of Final Fantasy 16, Final Fantasy Pixel Remaster, Dragon Quest Monsters: The Dark Prince, and Final Fantasy 7 Rebirth saw HD Games sales increase to ¥99.2 billion ($636 million) versus ¥78.5 billion ($503 million) the previous fiscal year.
However, the firm's MMO and Games for Smart Devices/PC Browsers sub-segments both declined year-on-year (11% and 10%, respectively), with the latter in particular seeing new releases underperforming and unable to compensate for weak performances from Square's back catalogue.
The operating losses across its digital entertainment segment were due to higher development cost amortisation and advertising expenses, it continued, as well as "higher content valuation losses versus the previous fiscal year."
Square Enix's results for the year were largely below what it had previously forecasted (for instance, it expected an operating income reaching ¥55 billion and it did ¥32 billion). Back in April, the company had warned investors that its results for the year would be taking a hit due to cancelled projects.
"Operating income, ordinary income, and profit attributable to owners of the parent for the fiscal year ended March 31, 2024 were below the company’s forecasts primarily due to weaker HD games sales than expected in the Digital Entertainment segment and to the recognition of valuation and abandonment losses associated with its content production account following a close examination of the company’s development pipeline," the company said in its financial report.
As a result of this
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