Square Enix says Final Fantasy XVI sales were 'in line with expectations'; hopes to elevate existing IPs to AAA status

Square Enix has posted the Outline of Results Briefing held on August 4, 2023 [PDF] for the first quarter of the fiscal year ending March 2024 (April through June 2023).

In the transcript of the briefing, Square Enix president Takashi Kiryu discusses first quarter results, which saw the release of Final Fantasy XVI. In addition to discussing sales and income for each of the company's main operating segments (which you can see for yourself at the hyperlink above), the most interesting component of the presentation comes in the investor Q&A session that takes place afterward.

Two particular questions are especially of interest.

The first discusses the sales of Final Fantasy XVI and how they lined up with Square Enix's expectations. Kiryu states that sales were "in line with expectations" and you can see his answer in full below.

Q: Initial sales of “FINAL FANTASY XVI” were three million units. How did that compare to your expectations, and how do you plan to expand sales going forward?

A: This achievement was in line with our expectations. To expand sales, we have planned a variety of PR activities and other initiatives to encourage more of the growing PlayStation5 installed base to play the title.

The second interesting question discusses Square Enix's future approach to AAA titles. Kiryu states that the company hopes to identify existing IP to be "upgraded" to AAA status, presumably giving such greenlit projects more development budget and resources. Once again, Kiryu's response is in full below.

Q: What do you hope to accomplish now that you have assumed the role of president?

A: I want to improve our profitability. I see ample room for improvement in our operating profit margin and would like to start by working primarily on our HD games. In addition, rather than solely attempting to create brand‐new IPs, we intend take a nuanced approach to investment whereby we also identify existing IPs with the potential to be upgraded to AAA status, taking ROI into account as well. In so doing, we hope to establish greater depth to the layers of our portfolio.

Of course, Square Enix still has several titles left to release in the current fiscal year, including Infinity Strash: Dragon Quest The Adventure of Dai, Star Ocean: The Second Story R, Dragon Quest Monsters: The Dark Prince, and Final Fantasy VII Rebirth.

For the previous fiscal year, Square Enix said that many small and mid-sized titles did not meet expectations. It remains to be seen if things fare better this current fiscal year.