The fiscal year ended March 2023 was the second year of the Medium-Term Earnings Targets and Business Strategy that we unveiled in May 2021. We recorded full-year net sales of ¥343.2 billion, operating income of ¥44.3 billion, ordinary income of ¥54.7 billion, and profit attributable to owners of parent of ¥49.2 billion. Below I will describe the performances of our individual segments.
The Digital Entertainment segment recorded net sales of ¥245.5 billion and operating income of ¥41.2 billion in the fiscal year ended March 2023. The High-Definition (HD) Games sub-segment released the latest installments in such existing franchises as “Octopath Traveler II,” as well as multiple titles featuring new IPs, including “FORSPOKEN.” However, the sub-segment’s net sales declined, failing to reach the scale of the previous year, which had seen the release of such titles as “OUTRIDERS” and “NieR Replicant ver.1.22474487139...” Through the development of “FORSPOKEN,” Luminous Productions Co., Ltd. gained experience and insights that we wanted to leverage in bolstering the development skills of our entire Group. As such, we decided to merge Luminous Productions with SQUARE ENIX CO., LTD. in May 2023. The merger is part of our current drive to step up our internal development capabilities, and we are hopeful that it will bring renewed vitality to development projects that are underway as well to other endeavors. In addition, “PowerWash Simulator,” which our UK-based studio discovered and our Group published, has proven incredibly popular. Many customers that we had previously been unable to reach are among those enjoying the title’s simple playability, making it a distinctive presence occupying a unique spot in our portfolio. We intend to further expand its earnings by continuing to regularly offer downloadable content and the like.
The Massively Multiplayer Online (MMO) Game sub-segment saw net sales decline in the fiscal year ended March 2023, partly because it was an off year for expansion packs for our core “FINAL FANTASY XIV” and “DRAGON QUEST X” titles. The sub-segment nonetheless delivered a solid performance as our retention efforts proved successful thanks to a variety of operational initiatives.
The Games for Smart Devices/PC Browsers sub-segment worked to create new titles capable of compensating for the decline in earnings from long-lived titles, but its net sales fell as the new titles did not achieve the level expected. The sub-segment competes primarily in Japan, where the smart device market has matured and hit titles have become more difficult to produce. However, we will strive to grow the business by maintaining solid operations for core titles like “DRAGON QUEST WALK” while also working to create new titles capable of generating stable earnings.
Net sales rose to ¥56.3 billion, and operating income grew to ¥5.2 billion at the Amusement segment. Japan saw in-person businesses pick up in general, partly because of the government’s redesignation of COVID-19 as a Class 5 disease. Against this backdrop, sales at our existing arcades significantly exceeded those of the previous year. We believe that the segment will continue to deliver a solid performance given the likelihood that demand from overseas tourists will expand, in part because Japan has eased its entry requirements. In addition, our Group company TAITO CORPORATION, which runs amusement facilities, has been rolling out a variety of initiatives in 2023 to celebrate its 70th anniversary.
The Publication segment reported net sales of ¥29.1 billion and operating income of ¥11.6 billion. Net sales grew, fueled partly by the creation of new works such as “Daemons of the Shadow Realm,” the latest work from “Fullmetal Alchemist” creator Hiromu Arakawa. Despite this, operating income declined year on year. In addition to our aforementioned efforts creating new titles, we were also successful at growing sales from popular existing titles like “My Happy Marriage” and “Barakamon,” whose live-action adaptations were much talked about.
The Merchandising segment reported net sales of ¥15.6 billion and operating income of ¥3.7 billion. While net sales grew thanks to brisk sales of merchandise featuring characters from our popular IPs, operating income declined, partly because of product mix changes.