On the eve of the launch of its flagship game Final Fantasy XV, Square Enix reported earnings that showed good revenue growth but lower profit margins.
Tokyo-based Square Enix said its revenues for the six months ending September 30 were ¥106,347 million ($1.01 billion), up 23 percent from the same period a year earlier. But operating income was ¥11,115 million, or $106 million, down 11.7 percent. The release of Deus Ex: Mankind Divided and Rise of the Tomb Raider for the PlayStation 4 helped drive sales for console games up 30 percent in the quarter.
The company is forecasting annual revenue of $2.3 billion by the end of its fiscal year in March 2017. In the six months ending September 30, Square Enix released titles such as Mobius Final Fantasy, Hoshi No Dragon Quest, Final Fantasy Brave Exvius, and Grimms Notes.
Square Enix said that the business environment is in the midst of major changes, where consumer needs for content on smartphones and tablets is growing while the console game markets in North America and Europe are becoming “competitive and oligopolistic.” That’s making predicting results harder. Final Fantasy XV debuts on November 29 on multiple platforms.