Review of Operations
Total Page:16
File Type:pdf, Size:1020Kb
Review of Operations The Square Enix Group (the “Group”) is continuing determined efforts to strengthen the competitiveness and profitability of its business segments of Digital Entertainment, Amusement, Publication and Merchandising. Net sales for the fiscal year ended March 31, 2020 totaled ¥260,527 million (a decrease of 4.0% from the prior fiscal year), operating income amounted to ¥32,759 million (an increase of 33.0% from the prior fiscal year), and ordinary income amounted to ¥32,095 million (an increase of 12.9% from the prior fiscal year). These factors resulted in profit attributable to owners of parent of ¥21,346 million (an increase of 10.2% from the prior fiscal year). Digital Entertainment Amusement (Billions of yen) (%) (Billions of yen) (%) 250 25.0 75 7.5 22.7% 200 18.7% 20.0 60 5.8% 6.0 14.2% 4.2% 150 15.0 45 4.5 3.2% 100 10.0 30 3.0 191.4 204.5 188.6 50 5.0 15 41.7 46.2 45.6 1.5 0 0 0 0 2018 2019 2020 2018 2019 2020 Net Sales (left axis) Operating Income Margin (right axis) Net Sales (left axis) Operating Income Margin (right axis) Publication Merchandising (Billions of yen) (%) (Billions of yen) (%) 25 37.3% 40.0 10 30.0 25.0% 20 29.0% 32.0 8 24.0 15 22.4% 24.0 6 18.0 12.6% 11.7% 10 19.4 16.0 4 12.0 14.2 5 11.0 8.0 2 7.5 7.3 8.7 6.0 0 0 0 0 2018 2019 2020 2018 2019 2020 Net Sales (left axis) Operating Income Margin (right axis) Net Sales (left axis) Operating Income Margin (right axis) 10 SQUARE ENIX HOLDINGS CO., LTD. I Annual Report 2020 Digital Entertainment Share of Net Sales (FY ended March 2020) 72.4% The Digital Entertainment segment consists of planning, development, distribution, and operation of digital entertainment content primarily in the form of games. Digital entertainment content is offered to meet customer lifestyles across a variety of usage environments such as consumer game consoles (including handheld game machines), personal computers and smart devices. The fiscal year ended March 31, 2020 saw the launch of the console title “DRAGON QUEST XI S: Echoes of an Elusive Age – Definitive Edition” and the posting of sales from early shipments of “FINAL FANTASY VII REMAKE,” which was released in April 2020 in the HD (High-Definition) Games sub- segment. Net sales nonetheless declined versus the previous fiscal year, which had seen the release of multiple major new titles. In addition, weak additional sales of major titles released in the previous fiscal © 2017, 2019 ARMOR PROJECT/BIRD STUDIO/SQUARE ENIX year and the booking of impairment losses related to the content production account resulted in an All Rights Reserved. operating loss in the HD Games sub-segment. In the smart device and PC browser area, net sales and operating income increased year on year given strong performances from “Romancing SaGa Re;univerSe” and “DRAGON QUEST WALK,” the latter of which was launched in September 2019. In the area of massively multiplayer online role-playing games, the launch of expansion packs for “FINAL FANTASY XIV” and “DRAGON QUEST X” and the resulting growth in paying monthly subscriber numbers led to greater net sales and operating income than in the previous fiscal year. Net sales and operating income for the fiscal year ended March 31, 2020 in the Digital Entertainment segment totaled ¥188,687 million (a decrease of 7.8% from the prior fiscal year), and ¥35,357 million (an increase of 21.9% from the prior fiscal year), respectively. © 1997, 2020 SQUARE ENIX CO., LTD. All Rights Reserved. CHARACTER DESIGN: TETSUYA NOMURA/ROBERTO FERRARI LOGO ILLUSTRATION: © 1997 YOSHITAKA AMANO © 2012-2020 ARMOR PROJECT/BIRD STUDIO/SQUARE ENIX All Rights Reserved. © 2018-2020 SQUARE ENIX CO., LTD. All Rights Reserved. © 2010 - 2020 SQUARE ENIX CO., LTD. All Rights Reserved. Powered by Akatsuki Inc. LOGO ILLUSTRATION: © 2018 YOSHITAKA AMANO ILLUSTRATION: TOMOMI KOBAYASHI © 2019, 2020 ARMOR PROJECT/ BIRD STUDIO/SQUARE ENIX All Rights Reserved. SQUARE ENIX HOLDINGS CO., LTD. I Annual Report 2020 11 Amusement Share of Net Sales (FY ended March 2020) 17.2% The Amusement segment consists of the operation of amusement facilities and planning, development, and distribution of arcade game machines and related products for amusement facilities. In the fiscal year ended March 31, 2020, while arcade operations were solid, a decline in amusement machine sales resulted in a year- on-year decline in annual net sales and operating income. Net sales and operating income for the fiscal year ended March 31, 2020 in the Amusement segment totaled ¥45,673 million (a decrease of 1.2% from the prior fiscal year), and ¥1,480 million (a decrease of 24.4% from the prior fiscal year), respectively. ©TAITO CORPORATION 2020 ALL RIGHTS RESERVED. ©TAITO CORPORATION 2020 ALL RIGHTS RESERVED. ©TAITO CORPORATION 2019 ALL RIGHTS RESERVED. ©TAITO CORPORATION 2020 ALL RIGHTS RESERVED. 12 SQUARE ENIX HOLDINGS CO., LTD. I Annual Report 2020 Publication Share of Net Sales (FY ended March 2020) 7.5% The Publication segment consists of publication and licensing of comic magazines, comic books, and game-related books. Sales in digital formats, including via the MANGA UP! comic app and of e-books, rose sharply in the fiscal year ended March 31, 2020. This, combined with brisk sales of printed media, resulted in higher net sales and operating income than in the previous fiscal year. Net sales and operating income for the fiscal year ended March Cool Doji Danshi 31, 2020 in the Publication segment totaled ¥19,452 million ©Kokone Nata/SQUARE ENIX (an increase of 36.0% from the prior fiscal year) and ¥7,250 million Talentless Nana ©Looseboy/Iori Furuya/SQUARE ENIX (an increase of 75.1% from the prior fiscal year), respectively. Monthly Shonen GANGAN Kakegurui –Compulsive Gambler– ©2020 SQUARE ENIX CO., LTD. All Rights Reserved. ©Homura Kawamoto•Toru Naomura/ MANGA UP! SQUARE ENIX ©2020 SQUARE ENIX CO., LTD. All Rights Reserved. Horimiya GANGAN ONLINE ©HERO・OOZ ©Daisuke Hagiwara/ ©2020 SQUARE ENIX CO., LTD. All Rights Reserved. SQUARE ENIX Merchandising FINAL FANTASY XIV: Shadowbringers Collector’s Edition (Physical Version) Expertly Crafted Dark Knight Figure Share of Net Sales (FY ended March 2020) © 2010 - 2020 SQUARE ENIX CO., LTD. All Rights Reserved. 2.9% The Merchandising segment consists of planning, production, distribution, and licensing of derivative products of IPs owned by the Group. In the fiscal year ended March 31, 2020, the release of new character goods featuring the Group’s own intellectual properties SQUARE ENIX CAFE ©2016-2020 SQUARE ENIX CO., LTD. All Rights Reserved. made for a year-on-year increase in both annual net sales and operating income. NieR:Automata® BRING ARTS™ Net sales and operating income for the fiscal year ended YoRHa No. 9 Type S March 31, 2020 in the Merchandising segment totaled ¥8,737 © 2017 SQUARE ENIX CO., LTD. All Rights Reserved. million (an increase of 18.1% from the prior fiscal year), and ¥1,021 million (an increase of 9.5% from the prior fiscal year), FINAL FANTASY® VII REMAKE PLAY ARTS 改(TM)KAI ACTION FIGURE respectively. CLOUD STRIFE & HARDY-DAYTONA © 1997, 2019 SQUARE ENIX CO., LTD. All Rights Reserved. CHARACTER DESIGN: TETSUYA NOMURA/ROBERTO FERRARI SQUARE ENIX HOLDINGS CO., LTD. I Annual Report 2020 13.