Square Enix Deploying “Aggressive” Multiplatform Strategy Following 70% Profit Drop

Square Enix is planning their next move following a disappointing financial year that saw profits decline nearly 70% and has rolled out a three-year plan with an “aggressive multiplatform” strategy.

The fiscal year ended March 31st, 2024 and the numbers fell far short of expectations, forcing the company to deploy new strategies that they are hope will help them achieve “stable profit generation” in its digital entertainment segment by 2027.

Here is a breakdown of the numbers, via GamesIndustry.biz:

The numbers

• Net sales: ¥356 billion ($2.28 billion, up 3.8% year-on-year from ¥343 billion)
• Digital entertainment sales: ¥248 billion ($1.59 billion, up 2.6% YoY from ¥245 billion)
• Operating income: ¥32.5 billion ($208 million, down 26.6% YoY from ¥44.3 billion)
• Profit attributable to owners of parent: ¥15 billion ($96.2 million, down 69.7% YoY from ¥49.2 billion)

“Operating income, ordinary income, and profit attributable to owners of the parent for the fiscal year ended March 31, 2024 were below the company’s forecasts primarily due to weaker HD games sales than expected in the Digital Entertainment segment and to the recognition of valuation and abandonment losses associated with its content production account following a close examination of the company’s development pipeline,” Square Enix said in its financial report.

The company added that its journey to “better profitability in HD game development” has been “incomplete” and added that – “[We] launched many titles but some failed to live up to profit expectations, especially outsourced titles and some AAA titles.”

The company went on to point out a slowdown in SD games, along with gaps in its management infrastructure, and “cannibalization of our new titles due to the launch schedule’s overlap.”

Their brand new, three-year strategy called called “Square Enix Reboots, and Awakens”, is aimed at addressing a number of these issues and Square Enix aims to enhance their overall productivity and release more titles more regularly by “optimizing [their] development footprint” and retiring its “business unit-based organisational design.”