Square Enix’s Q1 profits rise 68% to $72m despite sales decline

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 game business, to a decline in sales of new titles in the first quarter of 2025, including SaGa: Emerald Beyond and the Steam release of the Kingdom Hearts HD remastered collection.

The numbers

  • Net sales: ¥69.9 billion (US$477 million), down 18.4% year-on-year
  • Revenue: ¥10.6 billion (US$72.3 million), an increase of 68.6% year-on-year
  • Digital entertainment net sales: ¥43.9 billion (US$299 million), down 29.6% year-on-year

The interesting aspects

Square Enix’s HD games subdivision 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, significantly boosting its revenue.

However, he noted that the HD gaming sub-segment “turned profitable thanks to lower amortization of development costs and advertising expenses” compared to the first quarter of last year.

Net sales also declined in the mobile and PC browser subsegments “primarily due to weak sales of existing titles,” but the publisher noted an increase in profits “due to optimization of operating expenses.”

Regarding its MMO sub-segment, net sales and profits increased compared to the same period of the previous fiscal year.

Meanwhile, Square Enix's entertainment segment saw net sales rise 13.9% to $103 million as a result of a “year-over-year increase in same-store sales.”

Looking ahead, the company does not anticipate any changes to its full-year guidance, which was announced during its financial report on May 13.

Square Enix also announced a round of layoffs as part of a restructuring in May, affecting an unknown number of staff across its publishing, IT and indie divisions in the US and Europe.

This was due to a disappointing financial year in which many of the publisher's titles “failed to live up to earnings expectations, especially outsourced titles and some AAA titles.”

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