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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).
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."
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.
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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."
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.
Source