Today Square Enix announced its financial results for the first half of the fiscal year, related to the period between April and September 2019.
First of all, we get to take a look at the overall results for the company, which boasted an 8.2％ increase in net sales year-on-year.
Operating income did even better, growing by 62.9％ compared to the same period last year.
Speaking of the Digital Entertainment business (which includes games), things didn’t go too well in the field of console games, with Dragon Quest XI S for Nintendo Switch and Final Fantasy X/X-2 HD Remaster for Switch and Xbox One failing to catch up to last year’s performance.
“Major releases of console games in the six-month period ended September 30, 2019 included “DRAGON QUEST XI S: Echoes of an Elusive Age – Definitive Edition” and Nintendo Switch and Xbox One versions of
“FINAL FANTASY X/X-2 HD Remaster.”
Net sales declined versus the same period for the previous year, when a high hurdle was set by the release of a major new title. Moreover, weak additional sales of titles released in the previous year led to the HD sub-segment’s operating loss.”
Looking at mobile and browswer games thing went better, with Romancing SaGa Re;univerSe performing well and Dragon Quest Walk recording a good start.
“In the smart devices and PC browser area, net sales and operating income increased year on year since “Romancing SaGa Re;univerSe” continued to perform well and “DRAGON QUEST WALK” launched in September 2019 made a good start”
Then we get to the crown jewel, the MMORPG business. in June, Square Enix launched Shadowbringers, the latest expansion for Final Fantasy XIV.
Not only it boosted sales, but it also saw an increase in paying subscribers that caused further performance growth.
“In the area of massively multiplayer online role-playing games, revenues from sales of the latest expansion pack of “FINAL FANTASY XIV” and increase of number of paying subscribers boosted by the expansion generated increased net sales and operating income, compared to the prior fiscal year.”
As you can see in the table below, following a significant increase in both revenue and profit in Q1 even before the expansion launched (which doesn’t happen often in the MMORPG market, where growth usually comes after an expansion and not before), Shadowbringers caused explosive growth across the board, with net sales for the MMORPG business over doubling year-on-year, and operating income multiplied by three.
As a result of these factors comined, the Digital Entertainment segment totaled 85,406 million yen (up 4.2 year-on-year) in sales amd 16,686 million yen (up 33.0％ year-on-year).
This means that the MMORPG business amounted to 15% of net sales for the whole Digital Entertainment segment, and almost half the profit.