Square Enix report: profit fell by a quarter, the annual circulation of games exceeded 26 million copies
Square Enix has published a report for the fiscal year ended March 31, 2024.
Final Fantasy VII Remake
Key figures
- Square Enix's net sales amounted to 356.3 billion yen ($2.3 billion). Compared to last year, they increased by 3.8%.
- The company's operating profit is 32.5 billion yen ($209 million). This is 26.6% less than a year ago.
- Mobile and browser games brought Square Enix 101.5 billion yen ($651 million), HD games - 99.2 billion yen ($637 million), and MMO — 47.3 billion yen ($304 million).
- During the year, Square Enix sold 26.32 million copies of games. An increase of 3.88 million copies in annual terms. Most of the copies were in North America and Europe — 16.39 million. The company sold 6.63 million copies of the games in its native Japan.
- In the report, Square Enix recalled that it had recently canceled a number of games. At the end of April, the company reported that it had cost it 22.1 billion yen ($142 million). It is still not specified which games have been canceled.
- For the current fiscal year, which ends on March 31, 2025, Square Enix forecasts a 13% drop in net sales. According to her calculations, they will drop to 310 billion yen (2 billion). But operating profit should grow by 22.9% to 40 billion yen ($257 million).
- On March 31, 2024, Square Enix had 4,770 employees. Compared to last year, the company's staff increased by 58 people.
New business strategy
Square Enix has also unveiled a new medium-term business strategy for three years. The company hopes to use it to improve its financial situation.
Square Enix's new business strategy stands on four pillars:
1. Increase productivity by optimizing the scale of game development. The company will reduce the number of games produced, but raise their quality. She will try to regularly make games that will delight users for years, including creating new IP addresses. Square Enix will also abandon a business structure with several divisions in favor of a project structure.;
2. diversification of earnings through increasing points of contact with customers. The company will switch to an "aggressive" multiplatform strategy. It will actively release HD games on PC, PlayStation, Xbox and Nintendo Switch, and mobile games will appear more often on PC. She intends to sell licenses to other companies and develop her IP in all media formats (movies, TV series, etc.);
3. Launching initiatives to strengthen stability. Square Enix will restructure its foreign divisions and strengthen collaboration between employees in Japan and abroad. It will make the personnel structure more flat, making it easier to move up the career ladder;
4. Finding a balance in the allocation of capital between income for shareholders and investments in growth. Square Enix will spend 100 billion yen ($642 million) on strategic investments over three years. In particular, it will allocate 20 billion yen ($128 million) for share repurchase.
