Square Enix restructures, forecasts significant profit drop

Square Enix Holdings is implementing fundamental reforms to its development and marketing processes, driven by the increasing importance of overseas markets and technological advancements. This includes reorganizing overseas operations to enhance efficiency and agility, and strengthening the Digital Entertainment segment's development structure.

These initiatives have led to an extraordinary loss of approximately 9.8 billion yen in the second quarter of fiscal year ending March 31, 2026, with an additional 2.0 billion yen expected later in the year, related to restructuring and the closure of overseas development studios to consolidate functions in Japan.

Consequently, the company has revised its full-year consolidated financial forecast for March 31, 2026, with profit attributable to owners of parent now projected at 16,900 million yen, a 41.1% decrease from the previous forecast of 28,700 million yen. Net sales, operating income, and ordinary income forecasts remain unchanged. Additionally, Square Enix is targeting annual cost savings of over 3 billion yen from overseas structural reforms and plans to automate 70% of game QA and debugging tasks by 2027.