Square Enix Plans to Aggressively Pursue Multiplatform Strategy

Square Enix has revealed in a Financial Results report, that it will now “aggressively pursue a multiplatform strategy that includes Nintendo platforms, PlayStation, Xbox, and PCs. Especially, in regards to major franchises and AAA titles including catalog titles, it will build an environment where more customers can enjoy our titles.” This could mean that the strict PlayStation-first exclusivity for new Final Fantasy games could take a backseat, however, no more details were provided in this report regarding this.

Under the title of “(2) Diversify earnings opportunities by strengthening customer contact points” the report states, “the Group will strive to maximize the acquisition of new users when launching a title and that of recurring users after starting management of game operation.”

For the financial year ending March 31, 2024, Square Enix has shared the following:

“Net sales and operating income in the Digital Entertainment segment totaled ¥248,109 million (an increase of 1.0% from the prior fiscal year), and ¥25,468 million (a decrease of 38.3% from the prior fiscal year), respectively.”

 In the HD (High-Definition) sub-segment, consolidated net sales for the fiscal year ended March 31, 2024 increased compared with the previous fiscal year due to the release of titles including “FINAL FANTASY XVI,” “FINAL FANTASY PIXEL REMASTER,” “DRAGON QUEST MONSTERS: The Dark Prince,” and “FINAL FANTASY VII REBIRTH.” However, operating losses grew due to higher development cost amortization and advertising expenses, as well as higher content valuation losses versus the previous fiscal year.

In the MMO (Massively Multiplayer Online) Game sub-segment, net sales and profits declined compared with the previous year.

In the Games for Smart Devices/PC Browser sub-segment, net sales and profits declined compared with the previous fiscal year as the June 2023 launch of “Dragon Quest Champions” and the September 2023 launch of “FINAL FANTASY VII EVER CRISIS” were unable to compensate for factors including weak performances by existing titles.

Square Enix Reboots and Awakens

Under Management Strategy, it’s revealed that Square Enix has formulated a new medium-term business plan (covering the fiscal year ending March 31, 2025, through the fiscal year ending March 31, 2027) entitled “Square Enix Reboots and Awakens – 3-years of Foundation-Laying for Long-term Growth –.”

Part of the plan is to shift from quantity to quality as its medium- to long-term philosophy.

The report continues, “To that end, it will first work to establish the optimal portfolio, striking a balance between a “product-out” approach that reflects the imaginations of its employees to the utmost, and a “market-in” approach that leverages customers’ voices and data to inform development efforts. It will strive for a regular launch cadence, focusing its development efforts and investments on titles with substantial potential to be loved by customers for years.”

Some more details were provided regarding the losses incurred by the company.

Profit attributable to owners of the parent amounted to ¥14,912 million (a decrease of 69.7% from the prior fiscal year), partly due to the recognition of ¥22,087 million in losses on disposal of content as an extraordinary loss.

These losses stemmed from the termination of development efforts for some key pieces of content in the Digital Entertainment segment. A project-by-project review of continued development feasibility found these particular efforts to be incompatible with the Group’s revised approach to the development of high-definition (HD) games, which reflects such objectives as multiplatform development and the strengthening of internal development capabilities.

While Square Enix is having a challenging year in business, this might just put the company on the right track to success and more profit. What do you think of this new strategy? If you’re curious to see all the details, you can check out the entire report here.