Square Enix's latest games aren't selling well. Square Enix's net sales fell by 18.4% in the three months from April to June due to the lack of major releases. Overall, however the company still made an operating profit of 250.1%, largely because of its mobile and MMO gaming. This means that Final Fantasy 14 is the main thing keeping its "digital" entertainment financials positive.
Square Enix's latest earnings report shows that net sales and profits from its MMO games were the only thing to increase compared to last fiscal year. MMOs accounted for 68.4%, while mobile games accounted for 31.1% of Square Enix's operating profits. These numbers do not include Dawntrail, the latest expansion for FF14, which was released just last month. The usual lull that occurs before an expansion hasn't affected the 12-year-old MMO much. I wouldn't even be surprised if profits increase in the next quarter.
Square Enix has been making money with its MMOs for quite some time, especially since the success of Endwalker in 2021. Square Enix made a profit in its last full fiscal (ending March 2024) year. Square Enix highlights FF14 as well as Dragon Quest 10 in this category.
Square Enix announced in May that it would reboot its game development strategies after releases such as Final Fantasy 16 and Final Fantasy 7 Rebirth did not meet its profit expectations. Square Enix's new strategy includes releasing its games on different platforms. In its last full-year report, which included both games, the sales were okay, but not profitable due to higher costs of development. I'm certainly not going to say that releasing both games on the same day for PC would have prevented this, however, I am not not saying that either. You never know, maybe everyone and their dog would have lined up to see the new shredded Aerith Mod.
Although I believe anyone could have predicted the bubble would burst sooner than later, I'm glad to see that Square Enix's president Takashi Kiryu isn't betting all his money on generative artificial intelligence. The company did lay off US and EU workers earlier this year, as part of its "structural reforms," a blow to an industry that's been flooded with devastating layoffs in the last year. A successful MMO will only make your numbers look better, but it won't help you run a more efficient business.
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