Square-Enix has recorded a loss of ¥2,077 million for the three months ending June 30, 2012 - down from a net profit of ¥690 million in the quarter previous.
Despite this, sales were up slightly, by 1.6 per cent, to ¥24,914 - with 3DS title Dragon Quest Monsters Terry No Wonderland 3D, browser title Sengoku Ixa and social game Final Fantasy Brigade named as top earners in a period devoid of major boxed product.
That should change in the remainder of the financial year, with Sleeping Dogs, Hitman Absolution and the Tomb Raider reboot all primed for release before the end of the financial year on March 30, 2013. Square-Enix will also publish Call of Duty: Black Ops 2 in Japan in November.
"The advancement of networking and digitalization, and the diffusion of smartphones have triggered a fundamental change in the business environment surrounding the Group, where content delivery measures to customers and business models are increasingly diversified," reads a statement accompanying the results.
"The Group views this change as an opportunity to capture new profit sources, and is making every effort to establish its profit base through expansion of content and services that conform to emerging customer needs, and launch of full-scale commercial services for major MMO titles.
"Forecasts for the current fiscal year ending March 31, 2013 are unchanged from those issued on May 14, 2012. In the current fiscal year, the Group is focusing all efforts on a substantial earnings recovery from this fiscal year ending March 31, 2013 and beyond."
Full year predictions for the company are sales of ¥165 billion with an operating income of ¥15 billion, an operating margin of 9.1 per cent.