Square Enix has released its latest financial report, covering its most recent fiscal quarter, reporting an 18.4% decrease in overall net sales of its games on a year-over-year basis, despite the presence of a high-profile title like Final Fantasy VII Rebirth, whose sales have evidently not recovered from the previous quarter.
Considering that sales in the same period in 2023 were not exactly exceptional, it is clear that the Japanese publisher must review some choices. For comparison, in the same quarter of 2023, Final Fantasy 16 and Final Fantasy Pixel Remasters were released.
Profits, but no sales
Despite the decline in sales, Square Enix still turned a profit, thanks to lower amortization of development costs and advertising expenses. The MMO segment also saw an increase in sales and profits compared to last year. The data does not include the July release of Dawntrail, the new expansion for Final Fantasy 14, which will be included in the next quarter’s report.
Mobile games also fell, “due to weak sales of existing titles.” No names were given, but it is safe to assume that the free-to-play Final Fantasy VII Ever Crisis was also a disappointment. Despite this, profits increased thanks to the optimization of operating expenses.
In short, sales have been bad, but the reorganization efforts are somehow rewarding the company. In particular, it seems that the axe dropped by president Takashi Kiryu on some projects, which saved Square Enix about 120 million euros, was an effective solution, at least in the short term. The publisher has also laid off staff in its foreign offices, producing further savings.
In short, games are selling poorly, but layoffs and cuts to ongoing projects still manage to generate profits. That said, Square Enix must find a way to sell more games again, because it certainly can’t cut back forever.
