Square Enix promises business 'reboot' after year-over-year dip in net sales
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 billionbillion to ¥324 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, 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..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 anfictional language system the company showed off at the 2024 Game Developers Conference.Game Developer and Game Developers Conference are sibling organizations under Informa. 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
#square #enix #promises #business #039reboot039
Square Enix promises business 'reboot' after year-over-year dip in net sales
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 billionbillion to ¥324 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, 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..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 anfictional language system the company showed off at the 2024 Game Developers Conference.Game Developer and Game Developers Conference are sibling organizations under Informa. 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
#square #enix #promises #business #039reboot039
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