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Square Enix Doubles Gaming Profit Thanks to Final Fantasy XIV, Dragon Quest Walk, & More

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Square Enix Doubles Gaming Profit Thanks to Final Fantasy XIV, Dragon Quest Walk, & More

Today Square Enix announced its financial results for the nine months ended on December 31, 2019.

As you can see in the tables below, net sales for the three quarters were slightly higher (4.4%) than in the same period the previous year, while operating income (profit, in layman terms) was twice as much (up 124.3%).

The same can be said about the digital entertainment business, which includes games.

We also get a detailed breakdown of the performance of the digital entertainment business, which includes console games, MMORPGs and mobile games.

The Digital Entertainment segment consists of planning, development, distribution, and operation of digital entertainment content primarily in the form of game. Digital entertainment content is offered to meet customer lifestyles across a variety of usage environments such as consumer game consoles (including handheld game machines), personal computers and smart devices.

The lack of major single-player console release led to sharp decline in the “HD Games” business. On top of that, the segment operated at a loss due to weaker sales of games launched in previous fiscal years.

The new AR game Dragon Quest Walk performed well, and the slides also mention a strong performance for Romancing SaGa Re;univerSe, leading to strong growth in sales and operating income for the mobile business.

The MMORPG business was also strong thanks to the launch of expansions for Final Fantasy XIV and Dragon Quest X. In the presentation slides, we see that the increase in subscriber numbers is defined as “sharp.”

Major releases of console games in the nine-month period ended December 31, 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.

In the smart devices and PC browser area, net sales and operating income increased year on year since “Romancing SaGa Re;univerSe” and “DRAGON QUEST WALK,” the latter of which was launched in September 2019 performed well.

In the area of massively multiplayer online role-playing games, revenues from sales of the latest expansion packs of “FINAL FANTASY XIV” and “DRAGON QUEST X,” and increase of number of paying subscribers
boosted by the expansion generated increased net sales and operating income, compared to the prior fiscal year.

Net sales and operating income in the Digital Entertainment segment totaled ¥136,968 million (an increase of 3.1% from the same period of the prior fiscal year), and ¥29,515 million (an increase of 93.6% from the
same period of the prior fiscal year), respectively.

If you’d like to compare, you can check out the results for the previous quarter, released in November.

Incidentally, speaking of Final Fantasy XIV, we recently learned that the game passed 18 million registered players.

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