The latest earnings report for Square-Enix has been released for the period ending on June 30th, 2023, and it’s good news for the company in terms of a general increase in net sales – but the bad news (and the far more important figure) is profit dropping 66% year-over-year. This might seem a bit odd given the increase in sales, but it’s how things have shaken out for this quarter, even with Final Fantasy XVI launching at the very tail end of the report period.
On the investor call following the release, Square-Enix President Takashi Kiryu admitted that XVI fell short of expectations; one analyst told investors that the “Final Fantasy franchise’s profitability is weakening and improvements will take time.” The stock fell enough on the news to wipe out the gains made over the last year.
In the MMO space (which is most relevant to our interests) revenue dropped 22% year-over-year, which is attributed to slowing sales for Dragon Quest X and Final Fantasy XIV. The report itself indicates nothing about ongoing subscription revenue for these titles specifically; it’s also worth noting that FFXIV has only just had its next expansion pack announced at the end of last month. So it was not a great quarter for Square-Enix, although the company has not altered its overall predictions.