Square Enix's newest games aren't doing so hot. Without any major releases in the three-month period from April to June, its net sales dropped by 18.4% from the same period last year. Overall, however, the company still made a 250.1% operating profit, largely due to its mobile and MMO games, which means Final Fantasy 14 is one of the main things keeping its "digital entertainment" financials positive.
In its latest earnings report, Square Enix says net sales and profits of its MMO games are one of the only things going up compared to the previous fiscal year. MMOs made up 68.4% of its operating profits, while its mobile games made up 31.1%. Interestingly, these numbers don't even include FF14's latest expansion, Dawntrail, which launched just last month. It seems like the usual lull before an expansion didn't affect the 12-year-old MMO all that much and I wouldn't be surprised if the next quarter sees the profits go up even higher.
In fact, Square Enix's MMOs have been doing well for a while, especially after the success of 2021's Endwalker expansion. They made a profit over the course of its last full fiscal year (ending in March 2024). Square Enix highlights FF14 and Dragon Quest 10 as the main games in the category.
In May, Square Enix said it would essentially reboot its game development strategy after releases like Final Fantasy 16 and Final Fantasy 7 Rebirth failed to meet its profit expectations. Part of the new strategy is to release its games on multiple platforms. Notably, in its last full year report that included both games, sales were OK, but weren't profitable due to higher development costs. Now, I'm not going to say same-day PC releases for both of those games would've prevented this, but I'm not not saying that either. Maybe everyone and their dog would've lined up to see a new shredded Aerith mod, you never know.
I'm happy to see that the critically acclaimed MMO FF14 is probably helping Square Enix make enough money that its president Takashi Kiryu hasn't fully bet on generative AI, although I think anyone could have predicted that bubble would pop sooner rather than later. Still, the company laid off US and EU employees earlier this year as part of "structural reforms," another blow to an industry that has been inundated with devastating layoffs over the last year. A successful MMO can only make the numbers look better; it can't make you run a smarter business.
