Square Enix Holdings Co., Ltd. experienced a challenging fiscal year ending March 31, 2024, with a sharp decline in key financial metrics. The company’s latest financial results reveal a 69.7% drop in profits attributable to owners, which fell to ¥14,912 million from the previous year’s ¥49,264 million. This decline is part of a broader context where both operating income and ordinary income fell by 26.6% and 24.1%, respectively.
Despite an increase in net sales by 3.8% to ¥356,344 million, Square Enix faced significant losses due to unsuccessful development projects in the Digital Entertainment segment. These projects were discontinued as they did not align with the company’s revamped strategy focusing on multiplatform development and enhancing internal capabilities.
The Tokyo-based gaming giant is not just navigating through financial turbulence but is also setting the stage for recovery. Under the leadership of President Takashi Kiryu, Square Enix is shifting its development strategy from quantity to quality. The company plans to enhance productivity by optimizing its development footprint and focusing on titles that deliver unique experiences, aiming to boost profitability in the long term.
Looking ahead, Square Enix is diversifying its earnings opportunities across its business segments, including Digital Entertainment, Amusement, Publication, and Merchandising. The company is particularly hopeful about its Amusement segment, which saw a 43.2% increase in operating income, and its Merchandising segment, where sales surged by 20.8%.
As Square Enix adapts to the evolving market demands for digital entertainment, it remains committed to its medium-term business plan, targeting a robust earnings base and sustainable growth. The firm is also enhancing shareholder value through a prudent capital allocation strategy, balancing growth investments and shareholder returns. With these strategic pivots, Square Enix aims to navigate its current challenges and emerge stronger in the competitive gaming industry.
