Square Enix Sees 15.2% Decline in Q1 Net Sales Due to Underperforming New Titles

Square Enix has unveiled its financial results for the quarter ending June 30, 2025, revealing decreased net sales and profit compared to the same period in the previous year. The decline in revenue was largely attributed to the Digital Entertainment segment, which includes the company's video game business, with new titles failing to generate substantial sales. Key highlights from the report include: - Net sales of ¥59.2 billion ($401 million), representing a 15.2% year-over-year decrease - Profit of ¥4.8 billion ($32.5 million), down 54.8% from the previous year - Digital Entertainment net sales of ¥32.9 billion ($223 million), marking a 25% year-over-year decline The company noted a significant drop of 27.6% in net sales for its HD games subsection, with ¥8.9 billion ($60 million) in sales compared to ¥12.3 billion ($83.8 million) in the same period last year. This quarter saw the release of Bravely Default Flying Fairy HD remaster and Final Fantasy 16 on Xbox Series X|S, whereas the previous year saw the launch of three Kingdom Hearts catalog titles on Steam. Despite the decline in sales, Square Enix experienced an increase in sub-segment profits during the first quarter, primarily due to lower development costs and advertising expenses. The mobile and PC browser subsection witnessed a 24.3% decline in net sales to ¥14.3 billion ($97 million) compared to ¥18.9 billion ($128 million) last year, which the company attributed to weak sales of existing titles. However, profits increased due to diversified payment methods, resulting in improved profitability. The company's MMO segment also saw declines in both net sales and profit, dropping to ¥9.6 billion ($65 million) compared to ¥12.5 billion ($84.8 million) during the same period last year. In contrast, the amusement segment experienced an 8.5% increase in net sales to ¥16.4 billion ($111.4 million), driven by a year-over-year increase in same-store sales and sales of prize items to amusement facilities. Looking ahead, Square Enix announced no changes to its forecast for the full year, which was initially announced during its financial report in May.