Profit growth driven by strong HD Game sales and cost optimisation, though platform holder forecasts 10.5% dip in operating income for FY27
Square Enix has reported financial results for the year ending March 31, 2026, noting a decline in net sales due to reduced revenues from MMOs and games for smart devices and PC browsers.
However, operating income and profit increased, supported by strong sales of new HD Games titles such as Final Fantasy Tactics – The Ivalice Chronicles, Dragon Quest 1 & 2 HD-2D Remake, and Dragon Quest 7 Reimagined.
The company also updated its three-year plan, first announced in 2024, highlighting ongoing efforts to “strengthen its development structure and title management framework.”
Here’s what you need to know:
The numbers
- Net sales: ¥297.6 billion ($1.8 billion, down 8.3% year-on-year)
- Digital entertainment sales: ¥172.8 billion ($1.08 billion, down 16.3％ year-on-year)
- Operating income: ¥54.7 billion ($344.9 million, up 34.9% year-on-year)
- Profit attributable to owners of parent: ¥29.6 billion ($186.6 million, up 21.3% year-on-year)
The highlights
Although digital entertainment sales declined by 16.3% year over year, operating income rose 28% to ¥43.3 billion ($273 million).
Square Enix attributed this growth to steady sales of new titles and increased catalogue title sales compared to the previous fiscal year.
According to its three-year plan, catalogue sales rose from 16.84 million to 19.10 million units after promotional efforts to “maximise the impact of its multi-platform strategy across both new and catalogue titles.”
Overall, the company sold 26.68 million units, up from 25.45 million the previous year.
Square Enix attributed the decline in net sales to reduced revenues in its MMO and Games for Smart Devices and PC Browsers sub-segments, which fell 26% and 27%, respectively.
Operating income for MMOs also decreased 31%, which Square Enix linked to the launch of Final Fantasy 14: Dawntrail in the previous year.
For Smart Devices and PC, operating income increased 64% to ¥14 billion ($88.3 million) due to “improved profitability through diversification of payment methods and optimisation of operating costs.”
The future
Square Enix reported improvements to its overall operating structure by implementing strategies from its three-year medium-term business plan.
This included reviewing its medium- to long-term portfolio through “selection and concentration” and shifting focus from quantity to quality.
The company also noted that “steady progress is being made in establishing a framework that enables regular new launch titles for major IP.”
During the past fiscal year, Square Enix replaced its former division structure in Japan with a new Creative Studio structure.
The company streamlined overseas studios and consolidated resources in Japan. It executed structural reforms of its overseas operations and optimising SG&A expenses, which are projected to result in annual cost reductions of over ¥3 billion ($18.9 million) starting from FY2027.
It also introduced a company-wide progress management process for all major titles, fostering collaboration between management and studios.
Looking ahead, Square Enix forecasts flat net sales of ¥298 billion ($1.8 billion) and a 10.5% decrease in operating income to ¥49 billion ($309.2 million).
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