We would now like to begin the Financial Results Briefing session of SQUARE ENIX HOLDINGS (the “Company”) for the fiscal year ended March 31, 2023 (“FY2023/3”).
Today’s presenters are:Yosuke Matsuda, President and Representative Director, andTakashi Kiryu, Director and Chief Strategy Officer.
First, our president Mr. Matsuda will give an overview of the Company’s financial results for FY2023/3, and then Mr. Kiryu, our Chief Strategy Officer, will discuss our initiatives for achieving further growth.
In FY2023/3, the Company booked net consolidated sales of ¥343.2 billion (down ¥22.0 billion YoY), operating income of ¥44.3 billion (down ¥14.9 billion), ordinary income of ¥54.7 billion (down ¥16.0 billion), and net income attributable to parent company shareholders of ¥49.2 billion (down ¥1.8 billion). Unfortunately, both sales and profits declined YoY. Results for “FORSPOKEN,” which we released on January 24, 2023, were disappointing, but the title has received positive feedback on its action features.
Meanwhile, we have implemented several initiatives in FY2023/3 to help us to achieve future growth, including the overhaul of our development organization and title portfolio, and the strengthening of our publishing structure.
As part of efforts to strengthen our in-house development capabilities, we are in the process of consolidating our Group development resources through the merger of “FORSPOKEN,” developer Luminous Productions into Square Enix Co., Ltd. We look forward to the benefits the new structure will produce.
I will next break down our results by segment.
The Digital Entertainment segment posted net sales of ¥245.5 billion (down ¥34.1 billion) and operating income of ¥41.2 billion (down ¥17.7 billion).
Net sales declined YoY in the HD Games sub-segment despite the release of such titles as “CRISIS CORE—FINAL FANTASY VII—REUNION,” “FORSPOKEN,” and “OCTOPATH TRAVELER II,” as earnings from new titles were lower than in the same period of the previous year, which had seen the release of “OUTRIDERS,” “NieR Replicant ver.1.22474487139...,” and “Marvel’s Guardians of the Galaxy.”
Net sales fell YoY in the MMO sub-segment, partly due to the lack of any “FINAL FANTASY XIV” expansion pack release.
The Games for Smart Devices/PC Browser sub-segment also saw a YoY decline in net sales because of weak performances from existing titles.
The Amusement segment booked net sales of ¥56.3 billion (up ¥10.5 billion YoY) and operating income of ¥5.2 billion (up ¥3.2 billion). Net sales and operating income rose YoY due to significant growth in same-store sales.
The Publication segment booked net sales of ¥29.1 billion (up ¥100 million YoY) and operating income of ¥11.6 billion (down ¥600 million). Both digital and printed media sales were solid, but profits fell YoY due to a rise in cost of goods sold (CoGS), resulting from higher printing paper prices, as well as increased advertising expenses.
The Merchandising segment posted net sales of ¥15.6 billion (up ¥1.6 billion YoY) and operating income of ¥3.7 billion (down ¥200 million). Sales of new character merchandise based on key IP were strong, but the sales mix changed, resulting in higher net sales but lower operating income than a year earlier.
This concludes my overview of our FY2023/3 financial results.
The information on the future forecasts described in this material is current as of May 12, 2023. The company is not obliged to update or correct forecasts concerning the Company’s future results, including forecasts or outlook, if new information becomes available and/or events occur after May 12, 2023.