Square Enix Announces Weak Results due to Development Costs and Underperforming Mobile Games

Today Square Enix posted its financial results for the first nine months of the current fiscal year, alongside the latest quarter.

As you can see in the tables below both the company as a whole and the Digital Entertainment business (which includes games) posted lower results across the board for both sales and income in the nine months between April and December.

On the other hand, if we look only at the latest quarter, sales increased year-on-year, but income decreased considerably.

Square Enix explained in the accompanying press release that those higher sales were due to recent launches of console games like Shadow of the Tomb Raider, Just Cause 4, and Octpath Traveler, but those failed to cause an equivalent increase in profits “due to greater amortization of development costs for major new titles and increased advertising expenses.”

We also learn that many people for smart devices and browsers launched in the previous fiscal year “performed below expectations,” and failed to generate additional revenue on top of that brought in by established games.

In order to address the issue related to mobile games, Square Enix intends to focus on select titles and games based on existing IPs.

On top of that, they aim to rebuild the “development and operation organizations, and strive to create new hit titles.”