Square Enix Holdings forecasts a sharp 13.7% revenue decline to ¥280 billion ($1.8 billion) for fiscal 2026, signaling the financial cost of its ambitious three-year restructuring that prioritizes fewer, higher-quality games over volume.
The Japanese gaming giant, struggling after disappointing sales of major titles including Final Fantasy XVI and Final Fantasy VII Rebirth, expects operating profit to edge up just 1% to ¥41 billion ($263 million) despite the revenue slide. Net profit is projected to rise 17.6% to ¥28.7 billion ($184 million), reflecting cost-cutting measures that have slashed development spending by nearly half since 2022.
Square Enix unveiled its “Reboot and Awakens” strategy in May, abandoning its previous business unit structure in favor of centralized game development management. The company has canceled several in-development titles to redirect resources toward what it considers more promising projects.
The strategy represents a significant pivot for a publisher that has faced mounting pressure from investors. Square Enix shares plummeted more than 10% in November following mixed quarterly results, wiping hundreds of millions from its market capitalization.
Central to the restructuring is a shift toward multiplatform releases, ending the company’s strategy of console-exclusive launches. This approach has already shown results, with PC sales revenue increasing approximately 15-20% in the Digital Entertainment segment.
The company is establishing a new research and development division focused on artificial intelligence tools, though it remains unclear how this technology will differentiate Square Enix in an increasingly competitive market. Notably absent from the new strategy are any references to blockchain technology or NFTs, which the company heavily promoted in previous years.
Square Enix plans to allocate up to ¥100 billion ($642 million) for strategic investments over the next three years, including share buybacks, as it attempts to restore investor confidence in a business that has consistently missed financial targets under its previous strategic plan.
