SQUARE ENIX HOLDINGS CO., LTD.
1H FY2022/3 Financial Results Briefing Session Q&A
Date/Time: November 5, 2021 (Fri); 6:30-7:30 pm (JST)
Main Speaker: Yosuke Matsuda, President and Representative Director
Q: Why did you maintain your guidance despite the strong progress you made in 1H toward your initial earnings forecasts? Also, what are your expectations for your forthcoming title launches?
A: In the HD game market, our peers will also be rolling out a succession of new titles going forward, so we will need to keep a watchful eye on upcoming developments. Competition is also intense for smartphone games, so we want to see how our new titles perform at the outset of launch. It is for these reasons that we left our guidance unchanged.
Q: How do you view the risk associated with adopting new technologies such as NFTs and blockchain?
A: I see two risks. The first is that our expertise in blockchain games is insufficient at present. The second is that the laws surrounding blockchain are not sufficiently developed at this time.
Q: The MMO sub-segment did well again in 2Q, but given the expansion pack launches slated for 3Q, can we expect further upside? Also, what caused the QoQ drop in the operating margin at the Digital Entertainment segment?
A: We hope to maintain the trends seen in the MMO sub-segment in 2Q, while also raising the level of earnings further in 3Q, when the expansion packs are slated for release. The reason that the Digital Entertainment segment's operating margin declined is because some of the new titles that we released in 2Q substantially underperformed our initial expectations and because the performance of existing titles in the Games for Smart Devices/PC Browser sub-segment were slow.
Q: Do you plan to spread your HD game releases evenly throughout FY2023/3 and FY2024/3?
A: We plan to release them in each fiscal year without overly concentrating them in any particular period. That said, we may be forced to change our release schedule in some instances depending on how the development efforts for our games progress.
Q: The Games for Smart Devices/PC Browser sub-segment was weak in 2Q despite anniversary events for multiple titles. Is that because of weakness in the other existing titles? Also, are you planning on improving the sub-segment's momentum only by releasing new titles and not by taking steps to bolster the performances of existing titles?
A: The titles for which we held anniversary events delivered solid performances, but our other existing titles were weak. We intend to improve the sub-segment's momentum going forward not only by releasing new titles but also by working to bolster the performances of our existing titles.
Q: Do you see players moving between HD, MMO, and smart device/PC browser FINAL FANTASY titles? Also, could you tell us about what forthcoming initiatives you have planned that are likely to build excitement around the FINAL FANTASY franchise as a whole, if any?
A: While we believe that the player profiles differ slightly between our sub-segments (HD Games, MMO, Games for Smart Device/PC Browser), all players share the desire to play fun games, so we do believe that there is some movement between titles from the various sub-segments. Also, we are planning to launch two “FINAL FANTASY VII REMAKE” mobile games, so we expect those launches to produce some benefits.