Square Enix cuts losses by 75%

Square Enix cuts losses by 75%
Seth Tipps

By Seth Tipps

August 7th 2013 at 7:06AM

Browser, social, and mobile sales drive turnaround, but company held back by console performance

Square Enix has managed to drastically reduce losses since last year but its console business is still in trouble, according to the latest quarterly report.

It's been a volatile year for the company, which grossly overestimated its profit forecasts for the last quarter, has suffered the departure of senior staffers, and been forced to enact large-scale layoffs.

The results for the first quarter of 2014 show the company has managed to cut losses by 75% and that it's getting decent income from browser, social, and smartphone titles, but is struggling to find traction in the console market.

In addition, the company has booked an extraordinary loss of 1.6 billion yen ($16.2 million) after conducting “a comprehensive review on work-in-progress game titles”.

Square Enix has identified its key titles for the quarter as browser games SENGOKU IXA and Kaku-San-Sei Million Arthur, and its MMORPG Dragon Quest X.

Revenues for the quarter ended June 30 were 24.1 billion yen ($244.3 million), a drop of 3.3 percent from last year, resulting in a loss of 493 million yen ($5 million).

This is a 75 percent reduction of last year's loss of 2.1 billion yen ($21.3 million).

Digital sales were up 2.1 percent from last year to 11.6 billion yen ($117.6 million), bringing the division into the black with an operating income of 111 million yen ($1.1 million).

Square Enix isn't altering its forecast 3.5 billion yen profit for the full year since it believes business structure reform can drive earnings and establish a new revenue base.