Square Enix promises reforms as profit flips to loss

Various strategic reforms” are on the way for Square Enix after the company confirmed a year of losses for the 12 months ending March 2013.

Although net sales climbed 15.7 per cent for the period, an operating loss of 6,081m and a net loss of 13,714m was reported. That compares to an operating profit of 10,713 and a net profit of 6,060m in the same period a year before.

Net sales for the Digital Entertainment division climbed 24.5 per cent to 89,482m while operating income fell by 99.7 per cent to 44m.

Square Enix cited the underperformance of major titles for consumer game consoles in North America and Europe” as the main culprit for the numbers – which it says were in contrast to the continuously contributing profit” coming from its browser and smartphone game portfolio.

The group has implemented various strategic initiatives such as a change in its development policy, organizational reforms, and redesign of some business models,” the company told investors.

The business environment surrounding the Group is in the midst of major changes, where smart devices such as smartphones and tablet PCs are spreading rapidly, while the console game markets in North America and Europe are increasingly competitive and oligopolistic.”