Investor Relations

We would now like to begin the Financial Results Briefing session of SQUARE ENIX HOLDINGS (the “Company”) for 1-3Q of the fiscal year ending March 31, 2021 (“1-3Q FY2021/3”).
Today’s presenters are:Yosuke Matsuda, President and Representative Director, andAtsushi Matsuda, General Manager of Finance and Accounting Division.

First, Mr. Matsuda, General Manager of Finance and Accounting Division, will give an overview of the Company’s financial results for 1-3Q FY2021/3, and then our president Mr. Matsuda will discuss the progress made by each of the Company’s business segments.

Good afternoon. I am Atsushi Matsuda.In 1-3Q FY2021/3, the Company booked net sales of ¥253.6 billion (up ¥63.9 billion), operating income of ¥41 billion (up ¥13.3 billion), ordinary income of ¥38.7 billion (up ¥10.8 billion), and net income attributable to parent company shareholders of ¥18.3 billion (down ¥800 billion).
I will provide some details on items below the operating line. Firstly, our non-operating expenses include ¥2.3 billion in foreign exchange losses resulting from the yen’s appreciation versus the dollar since the beginning of FY2021/3. Secondly, under extraordinarily losses, we have posted ¥3.6 billion in losses associated with temporary suspensions of operations under the state of emergency declaration issued in April 2020.
In addition, our income taxes rose YoY, but that is because the sales and costs associated with our overseas titles varied substantially from country to country, leaving us with a greater tax burden than we had anticipated and resulting in a higher tax burden rate.

I will next break down our results by segment.The Digital Entertainment segment posted net sales of ¥203.5 billion (up ¥66.6 billion YoY) and operating income of ¥42.2 billion (up ¥12.7 billion).
The HD Games sub-segment saw sales rise YoY and a turn to profitability thanks not only to the release of major console titles such as “FINAL FANTASY VII REMAKE” and “Marvel’s Avengers,” but also to brisk sales of catalog titles and licensing income.
The MMO sub-segment saw sales decline YoY given that the “FINAL FANTASY XIV” and “DRAGON QUEST X” expansion packs had been released in the previous fiscal year, but YoY growth in recurring revenue resulted in higher profits.
The Games for Smart Devices/PC Browser sub-segment saw YoY growth in both sales and profits. In addition to solid performances from existing titles such as “DRAGON QUEST WALK” and “WAR OF THE VISIONS: FINAL FANTASY BRAVE EXVIUS,” earnings were also helped by “DRAGON QUEST TACT” and “OCTOPATH TRAVELER: Tairiku no Hasha” both of which were launched in FY2021/3.
The Amusement segment generated net sales of ¥24.3 billion (down ¥9.3 billion YoY) and an operating loss of ¥1.1 billion (vs. operating income of ¥1.4 billion a year earlier). The Company temporarily closed its amusement facilities in Japan in 1Q in response to the government’s state of emergency declaration, resulting in a sharp YoY sales decline and an operating loss.
The Publication segment booked net sales of ¥20.1 billion (up ¥6.3 billion YoY) and operating income of ¥8.8 billion (up ¥3.9billion). Sales in digital formats, such as from “MANGA UP!” manga app and e-books, grew substantially. Sales in printed formats were also brisk, resulting in YoY growth in net sales and operating income.
The Merchandising segment posted net sales of ¥7 billion (up ¥500 million YoY) and operating income of ¥1.8 billion (up ¥1.1 billion). The YoY growth in sales and profits owed to brisk sales of character goods and soundtracks based on the Company’s IP.This concludes my overview on our 1-3Q FY2021/3 financial results.