Today, Square Enix reported financial results for the fiscal year that ended on March 31. The results weren’t great, as the Japanese publisher narrowly missed the revenue target and majorly missed the operating income target, with the latter also down 26.6% compared to last year.
However, Square Enix also announced today a brand new medium-term business plan that will last through March 31, 2027. The plan’s title is Square Enix Reboots and Awakens – 3-years
of Foundation-Laying for Long-term Growth. The key changes compared to the studio’s previous plan are an aggressive multiplatform strategy and a focus on quality over quantity.
- For HD titles, the Group will aggressively pursue a multiplatform strategy that includes Nintendo platforms, PlayStation, Xbox, and PCs. Especially in regards to major franchises and AAA titles, including catalog titles, it will build an environment where more customers can enjoy our titles.
In addition, it will also devise a platform strategy for SD titles that includes not only iOS and Android, but also the possibility of PC launches. Furthermore, the Group will strive to maximize the acquisition of new users when launching a title and that of recurring users after starting management of game operation. - The Group will pursue a shift from quantity to quality as its medium- to long-term philosophy regarding the DE segment’s portfolio. To that end, it will first work to establish the optimal portfolio, striking a balance between a “product-out” approach that reflects the imaginations of its employees to the utmost, and a “market-in” approach that leverages customers’ voices and data to inform development efforts.
It will strive for a regular launch cadence, focusing its development efforts and investments on titles with substantial potential to be loved by customers for years.
As for the multiplatform strategy, it is likely that the commercially underwhelming launches of Final Fantasy XVI and Final Fantasy VII Rebirth have finally pushed Square Enix to forego PlayStation exclusive debuts of its premiere franchise. Both games, despite strong critical reception (especially of FFVII Rebirth), failed to sell as much as the publisher wanted, having only been released for PS5. In the future, it’s likely Square Enix will strive to launch games day and date on all available platforms.
For the period between FY 2025 and 2027, Square Enix has set the following financial targets:
- Consolidated operating margin of 15% in the fiscal year ending March 31, 2027.
- A maximum of ¥100 billion ($641 million) for total strategic investments (growth investments or shareholder returns) over a three-year period, including up to ¥20 billion ($128 million) for potential repurchases of Square Enix’s own shares between May 14, 2024 and May 13, 2025.
- The Group will strive to achieve ROE (return on equity) of at least 10%, shifting to a management approach mindful of capital efficiency.
