For the first six months of fiscal 2023, ending 9/30/22, Square Enix Holdings (9684.T-JP: Tokyo) reported a 3.3% decline in net sales and an 11% drop in operating income.
Analysis
The results for Square Enix were mixed but not that bad. In May, Square sold Eidos, Crystal Dynamics, and the related IP and studios to Embracer Group. The goal was to focus more on blockchain games. The bigger issue is that Square Enix did not benefit from the favorable currency valuation of the U.S. dollar versus the Japanese yen. There is some concern the company may lose penetration in the core Western game market.
Square Enix noted that sales of its premium games (HD games) “did not reach the level of previous year despite the release of multiple new titles.” Mobile games also showed a slight decline, with only ther Final Fantasy XIV MMO having an increase.
Square Enix remains an interesting company as they are a leader in role-playing and own the Dragon Quest and Final Fantasy franchises. However, they are involved in many areas and may simply be trying to do too much.
