Square Enix’s core video game business posted a stunning 1,900% profit increase during the second quarter of the 2025 calendar year, ending the three-month period with ¥1 billion (~$6.76 million) in the black. But while this headline figure looks impressive, the company’s latest financials paint a more complicated picture for investors.
A Profit Spike After Years of Decline
After peaking in 2022, Square Enix’s operating profit slid for two consecutive years before rebounding in late 2024. However, the full fiscal year 2025 results, ending in March, still showed a 20% operating income drop, falling from ¥40 billion to ¥32 billion (~$216.5 million).
On August 8, 2025, the publisher released its consolidated financial results for the first quarter of fiscal year 2026 (April–June 2025). While the HD games segment (console and PC) saw profits soar thanks to lower development cost amortization and reduced marketing spend, the company-wide figures were far less rosy:
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Net sales fell 15% to ¥59.32 billion (~$401.3 million)
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Operating income dropped over 16%, from ¥10.8 billion to ¥9 billion (~$60.9 million)
Simply put, Square Enix sold fewer big games, but also spent far less to support them, resulting in a profit rebound without a sales boom.
Mixed Results Across Divisions
The Digital Entertainment segment, which covers everything from mobile games and MMOs to amusement parks, saw net sales drop from ¥43.9 billion to ¥32.9 billion (~$222.58 million), a 17% year-over-year decline in operating income.
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MMO sales and profits dipped from Q2 2024 levels.
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Mobile game profits ticked up slightly from ¥3 billion to ¥3.3 billion (~$22.32 million).
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Total game units sold fell from 4.39 million to 4.01 million, with both physical and digital sales down.
Stock Performance and Restructuring Plan
Square Enix shares are currently trading at about $72.20, up 78.74% since January 2025. November will mark the halfway point of the company’s 36-month “Square Enix Reboots and Awakens” restructuring plan, which focuses on:
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Streamlining development for fewer, higher-quality games
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Strengthening its multi-platform strategy post-PlayStation exclusivity
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Preparing for the final entry in the Final Fantasy VII Remake trilogy, expected as a timed PS5 exclusive
The Road Ahead
The 1,900% profit surge in Square Enix’s HD segment highlights the short-term benefits of cost control, but the drop in overall sales and ongoing restructuring show that long-term stability is still a work in progress. Whether the strategy pays off will likely depend on the success of future multi-platform titles and the ability to keep development costs in check while delivering blockbuster hits.