Square Enix has released its financial results for the 2023-24 fiscal year, and things are looking a little grim for the company in profit terms.
According to its results presentation, Square Enix's profits are down a whopping 70% on last year, with the studio bringing in 14.91 billion yen in 2023-24 compared to the previous year's 49.26 billion figure.
In an ancillary document, the studio chalks this loss up to "the termination of development efforts for some key pieces of content in the Digital Entertainment segment", i.e. video game cancellations.
This likely includes the $140m (around 21.8 billion yen) loss declared by Square Enix earlier this year; the company cited "content abandonment losses" in an earlier report, a cause which is also cited in today's presentation.
By way of explanation, Square Enix says the projects it canceled were "incompatible" with its "revised approach to the development of high-definition (HD) games", by which it means major PC and console releases as opposed to mobile or browser-based games.
No further information on these projects was released; it looks like the projects that were canceled hadn't been announced, so we may well never know what they were.
Another cause Square Enix cites for its lower profits this year is "a YoY (year-over-year) decline in MMO and Games for Smart Devices/PC browser sub-segment sales", a shortcoming the company probably hopes to rectify this summer with Final Fantasy XIV: Dawntrail.
Today's financial release also includes an outline of Square Enix's new medium-term plan, which will cover it for the next three years.
That plan is called "Square Enix Reboots, and Awakens", and it revolves around "consistently and regularly releasing [HD] titles that meet our customers' expectations", as well as "disruptive growth" in the mobile and browser spheres.
Rather sweetly (or concerningly, depending on your read), Square Enix says its new priority is "bringing smiles to our customers' faces", to which end it will "regularly releas[e] AAA titles" and "strive for a regular launch cadence".
The company declares its intention to "aggressively pursue a multiplatform strategy" which includes not only PC, PlayStation, and Xbox, but also "Nintendo platforms", likely referencing both the Switch and its hotly-anticipated upcoming successor.
We'll have to wait and see if Square Enix's strategy pays dividends, but it's clear that the company has a long way to go if it wants to return to higher profits. Stay tuned for more.
