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Square Enix game sales down but profits up as strategic shift continues

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Square Enix has released its financial results for the year ending March 31, 2025, with a drop in net sales attributed to the lack of comparable releases to games like last year’s Final Fantasy VII Rebirth.
Nonetheless, the company saw an increase in operating income and profit. Dragon Quest III HD-2D Remake also performed better than expected.
The company is continuing its three-year plan – as revealed this time last year – to optimise its development operations and put quality over quantity for its future game releases, as well as prioritising multiformat development.
The numbers

Net sales: ¥324.5 billion ($2.22 billion, down 8.9% year-on-year)
Digital entertainment sales: ¥206.54 billion ($1.42 billion, down 16.8% YoY)
Operating income: ¥40.58 billion ($278.1 million, up 24.6% YoY)
Profit attributable to owners of parent: ¥24.41 billion ($167.3 million, up 63.7%)

The highlights
HD-Games, a sub-segment of Square Enix’s business that includes its main console and PC releases, dropped in net sales this year but turned profitable due to “lower development cost amortisation, advertising expenses, content valuation losses compared with the same period of the previous year.”
As noted, too, the latest Dragon Quest release also contributed to the positive result. Other new HD-Games releases this past year included Life is Strange: Double Exposure and Visions of Mana.
The launch of Final Fantasy XIV’s Dawntrail expansion increased net sales and operating income in the company’s MMO (Massively Multiplayer Online) Game sub-segment.
Net sales and operating income declined for the Games for Smart Devices/PC Browser sub-segment, though, which Square Enix attributed to “weakness in existing titles and the recognition of royalty revenue in the previous fiscal year”. This was despite the release of new game Emberstoria.
Today, the company announced the cancellation of mobile title Kingdom Hearts Missing-Link on Twitter.
HD-Games collectively made ¥33.87 million in operating income, up 33% from the previous year.
The future

Image credit: Square Enix

Square Enix also provided an update on its three-year ‘medium-term’ business plan. “In FY2025, we fundamentally revamped our development organisation structure for domestic studios,” the report read.
“Based on the concept of integrated studio operations, we reviewed the entire process of title development progress management and changed to a system in which management and studios manage the development progress of all large-scale investment titles, promoting optimisation of the development portfolio and schedule, as well as talent mobility and development cost optimisation among in-house development personnel.”
The revised process has led to significant changes behind the scenes.
“Under the new management structure, we reviewed all projects at our domestic studios, including HDG and [Smart Devices] titles, and decided to discontinue development of some titles and invest additional funds in titles that require refinement, thereby steadily implementing a strategy of selecting and concentrating development resources.”
“We will continue to control the scale of development investment in a disciplined manner,” the company added.
The report underlined the approach of going into FY27 and beyond by putting multiple games on multiple platforms and releasing major titles on a consistent basis.
The company also called out the PC market as a highlight of the year when it came to catalogue sales, and a result of its new multiformat strategy. PC sales were responsible for more than a third of its Digital Entertainment sales in FY25, a double digit percentage increase on FY24.
Square Enix released Final Fantasy VII Rebirth on PC in January 2025 following its 2024 PC release, and also brought the Kingdom Hearts franchise to Steam for the first time in June 2024.
For FY26, Square Enix forecasts sales declining again to ¥280 billion, with operating income steady at ¥41 billion. Upcoming releases include Bravely Default Flying Fairy Remaster on Nintendo Switch 2 and Dragon Quest I & II HD-2D Remake.

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Still Wakes The Deep developer The Chinese Room has seemingly made a small number of layoffs

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Still Wakes The Deep developer The Chinese Room appears to have made a small number of layoffs following the release of the BAFTA-winning game’s Siren’s Rest DLC this week.
A lighting artist and level designer from the studio have posted notices that they’re looking for work on LinkedIn over the past 48 hours (those posts are not linked here out of discretion, but have been verified by GamesIndustry.biz).
At a glance, around 10 staff with the studio listed as their current employer have the ‘looking for work’ label on their LinkedIn profiles – though this is not a reliable metric by itself.
When reached for clarification from GamesIndustry.biz, the studio did not confirm the number of layoffs, or directly confirm that layoffs had occurred.
It did, however, offer the following statement from studio director Ed Daly. “The Chinese Room will share news on changes for the studio in the coming weeks.”
The company is owned by Sumo Group, which in February announced it was refocusing its business on development services.
Still Wakes the Deep won three BAFTAs earlier this year, including two for performers Alec Newman and Karen Dunbar, and an award for New Intellectual Property.

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Capcom Spotlight stream set for June 26 | News-in-brief

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Capcom Spotlight stream set for June 26 | News-in-brief

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Warner Bros. Games promotes three studio heads as it focuses on four key properties

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Warner Bros. Games has confirmed a new leadership structure as it follows its previously revealed strategy of developing games based on the Harry Potter, Game of Thrones, Mortal Kombat, and DC Comics properties.
Three studio heads have been promoted into senior vice president roles, per Variety. Montréal studio head Yves Lachance will be SVP of development on Harry Potter and Game of Thrones-related games.
Shaun Himmerick, studio head of Mortal Kombat developer NetherRealm, will be SVP of development for both that series and games based on DC Comics. Warner previously indicated that “top-tier characters like Batman” were a focus area for DC-related games.
Finally, Warner Bros. Games New York studio chief Steven Flenory will be SVP of central tech & services, with a focus on game and publishing technology, QA, user research and customer service.
All three will report to JB Perrette, CEO of global streaming and games.
“We are very fortunate to have a strong stable of development and technology talent, and Yves, Shaun and Steven are respected leaders with excellent track records in their areas of expertise,” said Perrette in a statement.
“I’m looking forward to working closely with them and the team as we work to make the best games possible for our key franchises.”
Parent company Warner Bros. Discovery recently revealed plans to split into two companies: Streaming & Studios, which includes its gaming business, and Global Networks, which is largely focused on its legacy TV business and will carry the “bulk” of its $37 billion debt.
No layoffs or executive exits have been made as part of the changes, according to Variety.
Warner Bros. Games president David Haddad exited the company back in January. Variety notes it’s unclear if the company is seeking a replacement for his role.
The company also confirmed it was shutting down three studios in February, including long-running studio Monolith Productions, which resulted in the cancellation of its Wonder Woman game.
Rocksteady Studios – best known for the highly-rated singleplayer Batman: Arkham games, before spending nearly a decade making multiplayer game Suicide Squad: Kill the Justice League – made multiple rounds of layoffs following that project missing its financial targets upon release in 2024.
Rocksteady co-founders Sefton Hill and Jamie Walker left the studio in October 2022, before the game was released.
Warner Bros. Games previously took a $300 million+ writedown on its games business in 2024, which led to the decision to restructure around proven properties.

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