Despite the release of some big games, Square Enix reported that net sales were down 15 percent in the six months ending on September 18 when compared to the same period last year. Weak performances from service-based games and a large investment in a new studio contributed to the slow six months.
The six months saw Square Enix release major titles like the Switch role-playing game Octopath Traveler and Shadow of the Tomb Raider. During the same period last year, Dragon Quest XI: Echoes of an Elusive Age launched in Japan. It has sold over 4 million copies in that country alone. Dragon Quest XI released in the U.S. in September 4.
The bad news for Square Enix extended to other areas. Its mobile and browser games that launched in the previous year performed below expectations. Net sales and operating profit were down for its multiplayer online role-playing games, which couldn’t compete with last year’s launch of the Stormblood expansion for Final Fantasy XIV. Merchandising sales were also down.
Square Enix also explains a booking of extraordinary loss due to the investment in Luminous Productions, a wholly owned subsidiary, developing triple-A projects. Square Enix opened the Tokyo-based Luminous Productions in March. The company’s operating income was down 61 percent compared to the same six month last year.
Things could pick up for Square Enix in the next six months. The open-world destruction-based game Just Cause 4 launches on December, and the anticipated action role-playing game and Disney crossover event Kingdom Hearts III releases on January 29.