Is Square Enix in Trouble? Is Final Fantasy XIV Slipping?
Square Enix just released its Q1 FY2025 financial results, and the numbers are not pretty. The MMO division, powered mainly by Final Fantasy XIV, saw a sharp drop during that period following the launch of Dawntrail.
(SE runs a fiscal year that begins in April, so their Q1 is April through June)
MMO sales are down ¥2.9 billion, a 23 percent hit compared to last year. Operational profits fell by ¥3 billion, a 45 percent drop. That is not the kind of report you want when you’ve been leaning on one game to carry your MMO business.
Square Enix’s Bigger Problem
The MMO numbers are part of a wider slowdown across the Digital Entertainment division. That’s the segment covering MMOs, single-player RPGs, and mobile games. Overall, the division pulled in about ¥11 billion less than the same quarter last year.
One big reason? No major releases this quarter. Last year at this time, they had three Kingdom Hearts titles re-released on Steam that padded the numbers. Without anything like that this year, the gap looks even bigger.
Shareholder Yuzu has already called out that the recent stock price bump is mostly from activist investors and not because the company is firing on all cylinders. Translation: the stock is riding hype, not results.
The Current State of FFXIV
Final Fantasy XIV has been the workhorse of Square Enix’s MMO lineup for over a decade. It’s the game that saved them after the original 1.0 trainwreck. Lately, though, the momentum has been slipping.
Dawntrail came in with a Metacritic score in the high 70s, lower than what expansions like Endwalker pulled. Feedback from the player base points to pacing issues, repetitive content, and a noticeable bump in bugs that needed emergency patches and hotfixes.
Even Yoshi-P has admitted the quality of service has dropped. He’s promised fixes, including:
- Normal and Savage modes for the Forked Tower raid
- Pre-formed 48-player alliance support
- Quality-of-life changes for Cosmic Exploration, like mount access improvements and better mission flow
Those changes are aimed at making content more accessible and less of a grind.
Is This the Start of a Slide?
Square Enix is not about to go bankrupt. They still have cash flow, and FFXIV still has a strong subscriber base. These results are a shot across the bow. If the flagship MMO is underperforming, the rest of the lineup needs to pick up the slack—and right now, it is not.
The next 12 months are going to matter a lot. Patch 7.3, Patch 7.4, and the next expansion announcement at Fan Fest will decide whether FFXIV regains its footing or keeps slipping.
Bottom Line
Square Enix and Final Fantasy XIV are not in freefall, but the warning lights are on. The company cannot keep coasting on past success. They need to deliver content that excites players, fixes the service issues, and shows they still know how to lead the MMO space. If they do that, this quarter will be a blip. If they do not, the decline becomes the new normal.