Square Enix Operating Income Down By 78% Despite Final Fantasy 16 Release

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Due To Huge Costs of Game Development!

Square Enix has been a staple of the gaming industry over the decades. Despite a few rotten apples, the publisher has many successful IPs and recently displayed an impressive performance with Final Fantasy 16.

However, Final Fantasy 16’s success has not been enough to boost Square Enix’s operating profits. The business recently released its FY24 Q1 Results, and its operating income was down by 78.5% from the previous year.

Why it matters: Game development is becoming more expensive with each generation, and this also means that losses can be disastrous for publishers and developers.

Square Enix FY24 Q1 Results
Square Enix FY24 Q1 Results

The report hints that the success of Final Fantasy 16 was not enough to overshadow the other weak releases from Square Enix.

Recently, the publisher released games like Forspoken. The game cost over $100 million to develop but ended up falling far behind expectations. This has likely played a major role in the declining operating income.

Previously, Square Enix admitted that Forspoken was a failure and its sales were “lackluster.” Additionally, Square Enix’s MMO sales are down by 22%, and mobile game sales are down by 18.7%.

Nonetheless, Square Enix will likely recover in the coming months. The gaming giant has recently partnered with Xbox to bring Final Fantasy 14 and other games to the platform. This should help improve revenue from the MMO.

Furthermore, the publisher’s net sales are up by 14.4%. It sold 7.54 million games in FY24 Q1, almost twice as many as it shipped in FY23 Q1. HD sales have also seen a massive 140% increase due to Final Fantasy 16 and Final Fantasy Pixel Remasters.

The gaming giant has also highlighted plans for future remasters and faster AAA releases through streamlined game development. These measures could ensure improved revenue and profits through beloved classics and existing IPs.

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