Square Enix Sales Declined in Last Fiscal Year, Report Shows

Square Enix shared its Consolidated Financial Resultsfor the Fiscal Year Ended March 31, 2023 going over its sales. According to the official document, the company saw a decrease in net sales from games released compared to the previous fiscal year. On the other hand, merchandise sales increased greatly. In addition, the company showed more interest in investing in AI, blockchain, and cloud-based projects.

In the earnings report, Square Enix stated that the net sales in High-Definition (HD) game releases decreased between April 1, 2022 and March 31, 2023, compared to the same period in the previous report. For context, some of the games released this last fiscal year were Crisis Core -Final Fantasy VII- Reunion, Forspoken, and Octopath Traveller II.

The MMO segment also saw a decrease in net sales, which Square Enix pointed out could have been caused due to the lack of a new expansion for Final Fantasy XIV. As for the sales decline in games for smart devices and PC browsers, the company only said it was because existing titles showed weak performance. All of these areas summed up a decrease of 12.2% compared to the prior fiscal year.

Other areas such as book publication and merchandising, saw a sales increase of 0.5% and 11.9% each, respectively. However, there was a decline in operating income also for both areas with a decrease of 4.8% and 6.5% each. This could have been caused due to higher production costs, advertising expenses, and changes in expected income from the various products.

In response to these findings, Square Enix made a call to action to prioritize establishing a stable recurring income. In that sense, the company explained the strategy to date has been to focus on income through MMO, arcade, mobile games, and book publishing, so as to invest the earnings on the development of HD games. Hence, the new approach for a broader expansion will include “aggressive research and development efforts and investment” in AI, cloud, and blockchain games, stated the company.

This news follows previous statements by current Square Enix president Yosuke Matsuda that blockchain games are planned to come in the fiscal year 2024. As a reminder, Matsuda will give his seat in June 2023 to Takashi Kiryu, who has not commented publicly yet about NFTs or blockchain plans.