Square Enix Sold Almost 50 Million Games In 2020 Financial Year, Looking At NFTs For Future Growth
Square Enix sees massive potential in the crypto craze of NFTs, but for now it just recorded a record year of sales and profits.
Square Enix has announced its financial results, and like many other video game companies, the publisher broke a number of records last year. For the fiscal year ending on March 31, 2021, Square Enix recorded a 27.6% year-on-year increase in net sales that totaled $3.03 billion and saw its operating income grow by 44.2% to $430 million.
Thanks to the high-profile release of Final Fantasy VII Remake and Marvel's Avengers, "brisk" catalog game sales, and "solid" subscriptions for ongoing titles such Final Fantasy XIV and Dragon Quest X, sales increased 39.9％ year-on-year in Square Enix's digital entertainment business section. Unsurprisingly, critical flop Balan Wonderworld wasn't mentioned at all.
Interestingly, digital game sales grew by 31% to represent 85% of annual revenue. Despite that impressive figure, physical game sales more than doubled and the publisher sold nearly 50 million games in total, a substantial increase from the previous financial year's records of 33.4 million sales.
Just like Bandai Namco, the coronavirus wreaked havoc on Square Enix's amusement divisions, resulting in an operating income loss of $13.6 million.
Looking towards the future when the coronavirus pandemic begins to ease off and fewer people remain in lockdown mode, Square Enix still expects the fiscal year ending in March 2022 to see net sales increase year-on-year, although it does foresee a slight drop in operating income. Medium-term plans reveal a goal of reaching between $3.6 billion and $4.5 billion in net sales and earning around $684 million in yearly operating income in the fiscal year ending in March 2024.
Those numbers might not be too far out of Square Enix's reach, as plans to expand the Final Fantasy VII franchise further into the lucrative world of mobile gaming are currently underway.
That strategy will be complemented by strengthening current game intellectual properties and developing news one, with Square Enix planning to "bolster profitability" and expand the base of recurring profits by leveraging new and existing IP in different directions. To do that, the company aims to explore the world of non-fungible tokens, the latest crypto craze that you can read more about in our NFT guide about the popular and controversial art.
Square Enix says that this NFT avenue is being explored as a "means to quickly adapt to environmental changes in the content business and proactively adopt the burgeoning technologies that result from them."
For other publishers that have enjoyed a terrific 2020, you can check out Ubisoft's report on how Assassin's Creed Valhalla helped the company earn almost a 40% increase in profit, while Electronic Arts is all smiles after recording its best year ever.
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