Square Enix remains profitable despite losses from its gaming division

Square Enix remains profitable despite losses from its gaming division

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Square Enix released its latest earnings report and, despite its gaming side operating at a loss for the past two consecutive quarters, the company has managed to achieve year-over-year growth and remain profitable in the process. Over the nine months ending December 2020, Square Enix reported a 33.7% increase in net sales compared to the same period in 2019.

This saw the company’s operating profit increase 47.7% to 41.022 million yen and, while it was profitable, those numbers fell 4.3% compared to the numbers for 2019. Final Fantasy VII Remake proved to be a huge success for Square Enix, since its launch in the first quarter had net sales that were more than double the company’s best period in 2019, earning 34.1 billion yen.

The second and third quarters of the year were less successful, as Square Enix experienced a drop in net sales and operating revenue, despite having earned 18.8 billion yen in that period. A loss of approximately 5 billion yen was recorded during this period.

This drop in profits is in line with the release of Marvel’s Avengers in the second quarter, which not only had lukewarm reviews, but also struggled to establish a healthy player base and sold below expectations. Sales of MMO games like Final Fantasy XIV and Dragon Quest X also fell in 2020, but the division still managed to remain profitable thanks to players generating revenue within those games.

Marvel Avengers
Marvel Avengers

Net sales and operating profit increased year after year for games on smart devices and PC browsers, with Dragon Quest Walk, Final Fantasy Brave Exvius and Dragon Quest Tact proving to be standout titles. COVID-19 resulted in a terrible first quarter for Square Enix’s amusement and arcade business, but in the third quarter these divisions started operating at a profit again. The segment also recorded a general operating loss due to the closings in mid-June in an effort to combat the COVID-19 pandemic.

In early February, several other companies started publishing financial results. PlayStation recorded a very successful year with 4.5 million PlayStation 5 sales worldwide, while EA also has many reasons to smile, as its Star Wars license has earned the company more than $ 3 billion so far .

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Tocando agora: Revisão do vídeo de Final Fantasy VII Remake

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