Square Enix announced its financial results for the first half of the fiscal year, related to the period between April and September 2025.
According to the documents provided by the company, sales were 133,895 million yen (down 15% year-on-year), while operating income was 27,278 million yen (up 28.8% year-on-year).
Looking at the Digital Entertainment segment of the business, which is how Square Enix calls video games, net sales were 73,058 million yen (down 25.6ï¼… year-on-year), while operating income was 20,090 million yen (up 19.3ï¼… year-on-year).
The HD games sub-segment (basically games for consoles and PC), sales were 24.0 billion yen, down 3.5 billion yen from 27.5 billion yen in the same period of the fiscal year.
That being said, the sub-segment returned to profitability after losing money in the same period of the previous fiscal year. Operating profit was 5 billion yen, compared to a 1.2 billion yen operating loss, with an upward difference year-on-year of 6.2 million yen.
This is mostly due to lower development costs and advertising expenses, supported by “solid sales” of new games and growth in sales of older games.
The MMO segment dropped year-on-year both in net sales (from 32.4 billion yen to 19.9 billion yen) and operating income (from 13.1 billion yen to 7.8 billion) due to the fact that the latest FFXIV expansion Dawntrail was launched in the same period last year, while this year there was no new release.
Games for smartphones saw sales drop from 38.2 billion yen to 29.0 billion, but operating profit grew from 4.8 billion yen to 7.1 billion yen, due to the diversification of payment methods and optimization of operating costs.
The company also shared its progress made on its medium-term business plan.
During the first half of the fiscal year, the company has promoted the use of AI in its Japanese studios to increase the efficiency of game development. A project with that purpose has started in collaboration with the Matsuo Laboratory at the University of Tokyo.
A company-wide business idea contest themed on AI has been hosted-Several of these ideas have been selected and developed into projects and they’re currently being promoted internally.
The goal is to automate 70% of quality assurance and debugging tasks in game development by the end of 2027.
The publishing teams outside of Japan have been reorganized under the Chief Marketing Officer, with the reduction of 11divisions to 4 divisions. Square Enix expects this to save 3 billion yen per year.
Square Enix still plans to establish a mid- to long-term development pipeline to achieve the planned shift from quantity to quality. The company also aims to achieve stable launches of major titles centered on key IPs, following the three-year period of the current medium-term business plan.
That being said, it also plans to launch “several large-scale titles” between the two fiscal years between April 2026 and March 2028 (when the medium-term business plan ends).
The shift from quantity to quality is being promoted among games for smartphones as well, while the company is also making an effort to transition toward developing games focused on its bigger IPs.
On the other hand, for HD Games, Square Enix is also making an effort to expand sales of older games to grow the fanbase and improve profitability. These efforts led to a 31% increase in sales of catalog games (released in previous fiscal years) compared to the fiscal year between April 2023 and March 2024.
If you’d like to compare these results with historical data, you can read our report about the past quarter, based on data released in August.
Other gaming companies have already announced their financial results this quarter, including Koei Tecmo, Electronic Arts, Capcom, Microsoft, Konami, Marvelous, and Nintendo. You can expect plenty more reports on this topic in the coming days and weeks.
