Final Fantasy and Kingdom Hearts publisher Square Enix posts mixed financial results for its latest quarter

Square Enix Holdings Co. Ltd (TYO: 9684) posted a mixed set of financial results for the previous quarter on 8th August 2025, when it showcased a mix of higher profits amid recovering margins but lower revenue in tow when it came to its video games division.

Square Enix’s “HD Games sub-segment”, which consists of console and PC games, has seen a staggering 1900% increase in operating profits for the first quarter of FY 2026, which stretches from April to June 2025. The surge shows an uptick from ¥0.05 billion to ¥1 billion, or approximately US $6.765 million. 

Square Enix posted its Q1 FY2026 earnings report on August 8, 2025. The increase in operating profits could largely be attributed to reduced developmental costs and decreased advertising expenditure compared to the same period in FY 2025 Q1. However, net sales in the HD games sub-segment have seen a dip to ¥8.9 billion compared to ¥12.3 billion year-over-year.

Company executives have stated that the margin improvement is due to lighter release slates in contrast to heavy promotional campaigns, as seen previously with the Kingdom Hearts franchise. However, Square Enix’s net sales have fallen 15.2% to ¥59.275 billion, or around $401.3 million, while operating income has declined 16.8% to ¥9.018 billion.

However, the broader Digital Entertainment segment, which includes HD games along with mobile titles, and MMOs like Final Fantasy XIV, has a reported net sales of ¥32.9 billion, a steep decline from ¥43.9 billion compared to the previous year. 

Furthermore, operating income has decreased 16.5% to ¥8.1 billion. Within the MMO sub-segment, sales have tumbled down to ¥9.6 billion from ¥12.5 billion, and profits have decreased to ¥3.6billion ahead of FFXIV’s Dawntrail Expansion, which entered early access on June 28, 2025.

On the flip side, mobile and PC browser games saw better days on the profit front, as operating income increased to ¥3.3 billion from the previous ¥3 billion, thanks to diversified payment methods. Total unit sales across physical and digital media totaled 4.01 million, a decrease from the previous year’s 4.39 million.

Despite these setbacks, Square Enix’s stock is up 78.74% year-to-date, closing at around $74.79 per share as a result of the release of the financial earnings report. Investors currently expect a full-year of forecasted ¥280 billion in net sales and ¥41 billion in operating income.

These results come amid the “Square Enix Reboots and Awakens” restructuring plan, a 36-month endeavor that took off last year to smooth out development cycles, prioritize fewer but higher-quality games, and focus on multi-platform releases, instead of focusing on PlayStation exclusivity.