Square Enix has disclosed a decline in profits, despite an upswing in sales attributed to their latest Final Fantasy releases. Their financial report for April to September 2023 reveals a 33% drop in operating income and a 42% decrease in ordinary income. Although net sales saw a 5.3% increase compared to the previous year, lower profits were experienced due to the weakened Japanese yen.
The company highlighted the robust performance of Final Fantasy XVI, stating that sales were "extremely strong," although they didn't reach the highest expectations. Additionally, sales in the MMO segment decreased in comparison to the previous year, even after the extraordinary success of the Endwalker expansion.
It is anticipated that sales for Final Fantasy XIV, Square Enix's most profitable game, may dip this year as the next expansion, Dawntrail, is not slated for release until 2024. This development is expected to give a significant boost to the financials of the next fiscal year, especially with the game's launch on Xbox consoles.
Furthermore, Square Enix has high hopes for the release of Final Fantasy VII Rebirth on February 29, 2024. This is anticipated to play a pivotal role in boosting sales towards the end of the financial year. Additionally, a PC release of Final Fantasy XVI (along with DLC) is on the horizon for the following year.
Despite the launches of Dragon Quest Champions and Final Fantasy VII Ever Crisis in June and September respectively, the sales for mobile games declined. This led to the conclusion that these new releases were unable to compensate for the underperformance of existing titles in the mobile gaming segment.
In summary, net sales for games increased to 122 million yen (up 4.2%), but operating income saw a significant drop to 15.5 million yen (down 36.9%). Although the total company net sales for the full financial year are projected to rise by nearly 5% compared to the previous year, profits are expected to be 21.9% lower.
The company is looking to the future with a focus on creating new intellectual properties and attracting development resources to maintain their competitive edge in both the consumer and smart device game markets.
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