Bryant Francis, Senior EditorMay 14, 20253 Min ReadImage via Square EnixAt a GlanceSquare Enix is announcing notable changes to its business strategy following a weak earnings report.These plans notably do not mention the company's trumpeted investments in blockchain and NFTs.Square Enix is making major changes to its business operations to revamp its output after a year-on-year sales slump. In annual financial results posted today, the Final Fantasy and Dragon Quest developer reported an 8 percent decrease in net sales for the fiscal year ending March 31, 2025, diving from ¥356 billion (about $2.5 billion) billion to ¥324 billion (about $2.2 billion).Operating income decreased accordingly, dropping from ¥40 billion to ¥32 billion.These changes—and a steady stream of sagging quarterly financial results over the last year—prompted the company to announce a 3-year business plan promising a "reboot for long-term growth." Its strategy centers around reorganizing its development studios to operate under one management group, expanding revenue opportunities by "strengthening customer contact points," and other corporate initiatives.This plan began taking shape in 2024 with the shuffling of its internal studios under one "franchise management division." This means all Square Enix developers working on online games, "HD games," and "SD games" are in one business unit. Its AI and engine development divisions, as well as its audio, QA, and other "development-related specialized organizations" now sit outside these studios. The company says this shuffling led to "discontinued development" of some games (including a Kingdom Hearts mobile spin-off), and increased investment in titles that "require refinement."Related:This reorg has already led to decreased spending on advertising and promotion for its portfolio of free-to-play mobile games like Dragon Quest Tact. Its plan to "strengthen customer contact points" includes a plan to expand into the Chinese market and roll out new retail initiatives like "pop-up stores" and other merchandising promotion.The success of these plans will be judged by Square Enix's ability to hit three financial goals: a 15 percent consolidated operating margin in the fiscal year ending on March 31, 2027, an allocation of ¥100 billion over the next three years, and a target return on equity of at least 10 percent.The nitty gritty of Square Enix's studio structure is interesting—but it's what's not mentioned in this business revamp that makes the leadership strategy of the last few years all the more glaring.NFTs are nowhere to be seen in Square Enix's plan for the futureSearch any of Square Enix's financial documents released today and you'll notice two words are notably missing: "NFT" and "blockchain."Under normal circumstances, that wouldn't be unusual—NFTs have sputtered in the broader video game industry and blockchain game technology hasn't clicked with mainstream audiences. But Square Enix spent the last three years boasting that NFTs and blockchain tech would be a big business opportunity for the company. This was an especially big gamble coming out of the COVID-19 lockdown era, where player spending rocketed to unprecedented highs, creating a ripe opportunity for companies that could capitalize on the newfound cash.Related:It seems that was a misplaced bet. Few other companies followed in Square Enix's footsteps, and those that did like Sega have publicly reversed course with their enthusiasm. (Ubisoft is still sitting at that particular blackjack table, yelling "hit me" as other players slip away).The hot technology that followed the blockchain craze, generative AI, is still a part of Square Enix's future. Its R&D studios will invest in the technology to help create "new kinds of experiences." But so far, the most we know of these experiences is an (intriguing!) fictional language system the company showed off at the 2024 Game Developers Conference.Game Developer and Game Developers Conference are sibling organizations under Informa.Read more about:Square EnixTop StoriesFinancialsAbout the AuthorBryant FrancisSenior Editor, GameDeveloper.comBryant Francis is a writer, journalist, and narrative designer based in Boston, MA. He currently writes for Game Developer, a leading B2B publication for the video game industry. His credits include Proxy Studios' upcoming 4X strategy game Zephon and Amplitude Studio's 2017 game Endless Space 2.Follow Bryant Francis, Senior Editor, on Bluesky or LinkedIn.See more from Bryant FrancisDaily news, dev blogs, and stories from Game Developer straight to your inboxStay UpdatedYou May Also Like

Image: Square EnixSquare Enix has released its financial results for FY2025, detailing a rather middling performance for the company with a distinct lack of major releases. The good news is that its HD Digital Entertainment sub-segment (i.e. the big games we're all interested in) turned a profit, but only because a combination of lower development and marketing costs mixed with higher-than-expected sales of Dragon Quest III HD-2D Remake effectively outweighed the higher net sales from the previous year. So, in short, Dragon Quest saved the day. Here's a look at the key figures from Square Enix itself: "Net sales for the fiscal year ended March 31, 2025 totaled ¥324,506 million (a decrease of 8.9％ from the prior fiscal year), operating income amounted to ¥40,580 million (an increase of 24.6％ from the prior fiscal year), ordinary income amounted to ¥40,939 million (a decrease of 1.4％ from the prior fiscal year), and profit attributable to owners of the parent amounted to ¥24,414 million (an increase of 63.7% from the prior fiscal year)." In a separate document, Square Enix details its mid-term plan to 'Reboot and Awaken' its business operations, which focuses on four core initiatives: Enhance productivity by optimizing the development footprint in the Digital Entertainment (DE) segment Diversify earnings opportunities by strengthening customer contact points Roll out initiatives to create additional foundational stability Allocate capital giving consideration to the balance between growth investment and shareholder returns The biggest takeaway in terms of games is that Square Enix is once again reinforcing its plan to focus on multi-platform titles and optimise its development structure to significantly reduce costs; we know, of course, that it's planning to release Final Fantasy VII Remake Intergrade on the Switch 2 later this year, which was previously exclusive to PS4/PS5 and PC. It's also keen to focus more on quality over quantity, with a view to release major titles in key franchises on a steady basis. Unfortunately, this likely means that smaller, more experimental titles may fall by the wayside in the years to come. Elsewhere, Square Enix notes that it plans to improve productivity within its Japanese studios via the use of AI, but it does not elaborate on exactly what this entails. It's also implementing new HR initiatives, including the introduction of bonus funds directly linked to company performance. Finally, it's looking to optimise its overseas operations and promote more intra-group collaboration. As a result of these changes, the company is looking to achieve a consolidated operating profit margin of 15% in the fiscal year ending 31st March 2027. Going back to Final Fantasy VII Remake Intergrade, a recent Creator's Voice video implied that both Final Fantasy VII Rebirth and the as-yet-untitled third entry would also come to the Switch 2. Square Enix's 'reboot and awaken' plan only goes toward reinforcing this possibility. While mobile games seemingly tank Along with whatever the third game will be called What do you make of Square Enix's plan going forward? Which of its games would you like to see come to Switch 2? Let us know with a comment. [source hd.square-enix.com, via hd.square-enix.com] Related Games See Also Share:0 0 Nintendo Life’s resident horror fanatic, when he’s not knee-deep in Resident Evil and Silent Hill lore, Ollie likes to dive into a good horror book while nursing a lovely cup of tea. He also enjoys long walks and listens to everything from TOOL to Chuck Berry. Hold on there, you need to login to post a comment... Related Articles Nintendo Updates Its User Agreement To Crack Down On Emulation Offenders may find their Switch bricked Here's A Look At The Back Of Mario Kart World's Switch 2 Box Art The race begins next month Nintendo Defends Switch 2's Perceived Lack Of Innovation "we feel that it is a very Nintendo-like product" Xbox Branded Handheld Photos Leak, And It's Not Quite As Slick As The Switch 2 Those fingerprints don't help