Square Enix’s 250% profit increase carried by Final Fantasy 14 as sales of PC and console games drop
Square Enix released their financial results for the first quarter of the fiscal year (April 1 to June 30, 2024) on August 6. Although overall sales declined (down by 18% year-on-year), Square Enix reported a significant increase in operating profit (up 250.1% year-on-year). This dramatic increase was partially thanks to Square Enix’s streamlining efforts, and the strong performance of Final Fantasy XIV.
The decrease in game sales for Square Enix in quarter 1 is not surprising when you consider that quarter 1 of the previous year saw the release of both Final Fantasy Pixel Remaster (April 2023) and Final Fantasy XVI (June 2023), both of which sold well. In contrast, the main releases in 2024’s quarter 1 were Kingdom Hearts -HD 1.5+2.5 ReMIX- (a remaster of the first 6 Kingdom Hearts titles on Steam) and SaGa Emerald Beyond, a new multi-platform entry in the SaGa RPG series. The impact of Final Fantasy VII Rebirth (which was released on February 29) is not directly mentioned in the Q1 results presentation.
Although total sales of so-called HD games (PC and console titles) were down, the overall operating income for Square Enix’s digital entertainment sector alone increased by 7 billion yen compared to the first quarter of the previous year. This was greatly influenced by the strong performance of Final Fantasy XIV- the MMO with impressive longevity. In quarter 1, FFXIV’s net sales amounted to 12.5 billion yen (up 1.5 billion yen YoY), and operating income was 6.6 billion yen (up 2.2 yen YoY). The latest expansion pack for Final Fantasy XIV, Dawntrail, was released on July 2, and is likely to help continue the MMO’s profitability into quarter 2. Other factors that aided Square’s operating profit increase were decreased advertising costs and lower development cost amortization compared to Q1 of the previous year.
As for Square Enix’s mobile and PC browser-based games, sales were down to 18.9 billion yen (a decrease of 3.4 billion YoY) but operating income was up to 3 billion yen (an increase of 0.5 billion YoY). According to the report, sales of existing titles remain weak, but Square Enix has optimized their running costs. The company has also cut back on its mobile titles, shutting down F2P games like Dissidia Final Fantasy: Opera Omnia and NieR Reincarnation, among others (Related article).
Square Enix experienced a 70% drop in profits last fiscal year. Back in May, Square Enix revealed their “quality over quantity” 3-year business plan (March 2025 to March 2027), which aims to develop a smaller number of games, with a focus on aggressively pursuing multi-platform releases (Related article). Evidence of this move towards streamlining can already be seen in the increased operating profit for quarter 1 of the current fiscal year.
