We've known for a while now that Square Enix has been struggling with the sales of its biggest titles, as it's reported that both Final Fantasy 16 and Final Fantasy 7 Rebirth fell well below expectations when it came to net sales. It convinced the publisher to start being selective about where it allocated resources, and took a financial hit of over $140 million by scrapping a bunch of titles that were in development earlier this year.
We've yet to see the outcome of this dramatic shift, but the company's earnings report for this quarter (April 2024–June 2024) has proven that not everything is doom and gloom. We'll get the bad stuff for Square Enix out of the way first, and that's the fact that net sales are currently down year-on-year by a pretty whopping 18.4 percent, despite the release of Final Fantasy 7 Rebirth in February. The game may have launched in the previous quarter, but Square Enix was likely hoping that the game's sales would have had some longevity.
However, it's likely this was expected, as Square Enix claims that the lack of big releases during this previous quarter is the cause, as both Final Fantasy 16 and Final Fantasy Pixel Remaster both released during the same time period last year. It's not surprising that Final Fantasy 7 Rebirth couldn't outpace the two, especially with Final Fantasy 16 being more anticipated due to it being the next mainline title in the series.
Square Enix's mobile division sales are also looking pretty rough this past quarter, as they have also declined due to "weak sales of existing titles," most likely referring to Final Fantasy 7 Ever Crisis. Square Enix does go on to explain that the sub-segment did make a profit though, thanks to the "optimization of operational expenses."
Square Enix's MMO And Mobile Sub-Segments Are Keeping The Company In The Green
Thankfully, things are looking a lot peachier in Square Enix's MMO sub-segment, which has apparently seen a rise in sales and profits during this past quarter compared to 2023's. A lot of that will be down to Final Fantasy 14's Dawntrail expansion, as while the full impact of release won't be seen until the end of this current quarter, sales will have increased thanks to people getting ready for its launch.
And that's what Square Enix's Digital Entertainment business looked like as a whole for the last quarter. While the company is clearly going through some kind of transitioning period to try and tackle the sales problems surrounding its biggest titles, the most worrying part was put forward by data analyst Daniel Ahmad, who has pointed out that the only reason why the business is turning a profit at the moment is its mobile and MMO divisions, with PC and console games only making up 0.5 percent of the company's operating profits.
That will likely be seen as concerning, though we'll have to see what the company plans on doing about it. We still don't know what approach it's going to take towards big, single-player titles or its smaller releases, though it will have to do something if it doesn't want to continually rely on its MMO and mobile games for the foreseeable future.
