Square Enix Holdings reported a significant increase in profits for the first quarter of the fiscal year ending March 2025, despite a notable decline in sales. The company posted sales of 69.915 billion yen (US$491.2 million), down 18.4% from the same period last year. However, operating profit soared by 250.1% to 10.844 billion yen (US$76.2 million), while ordinary profit increased 66.7% to 15.297 billion yen (US$107.4 million), and net profit rose 68.6% to 10.62 billion yen (US$74.5 million).
The rise in profits was attributed to stronger performance in the company’s core gaming segments, particularly in massively multiplayer online role-playing games (MMOs) and smartphone games. The decline in new HD game releases reduced the costs associated with development and advertising, contributing significantly to profitability.
In the digital entertainment sector, despite a 29.6% decrease in revenue to 43.905 billion yen (US$308.6 million), operating profit surged by 255.9%. This was due to decreased amortization costs and advertising expenditures compared to the previous year. Meanwhile, the amusement and publishing businesses showed year-on-year growth, with sales rising by 13.9% and 15.8%, respectively.
Looking ahead, Square Enix forecasts a 13% decline in annual sales to 310 billion yen (US$2.2 billion) but anticipates a 22.9% increase in operating profit to 40 billion yen (US$281 million) for the fiscal year ending March 2025. The company aims to capitalize on its existing portfolio while optimizing costs to maintain profitability.
