Fiscal year 2007 is certainly not the best fiscal year for Square Enix, which suffered a significant drop on revenues and earnings. According to their report, Square Enix's sales slumped by 9.8 percent to only 146.5 billion yen (or US$ 1.4 billion), compared to the 31.3 percent gain that they posted for fiscal year 2006.

They managed to post net income worth 2.9 billion yen, or US$ 89 million.

The downturn is not only attributed to Square Enix's console gaming. The company's main online title, Final Fantasy XI (PC, Xbox 360) managed to reach 500,000 subscribers, but the revenues garnered from Square Enix's overall online gaming arm also got hit with a drop of 12 billion yen (or US$ 116 million).

However, things will eventually turn for the better if everything goes as planned for the company. Square Enix has tagged the fiscal year of 2007 as a period of transition, expecting a revenue rebound of 8.5 percent worth 160 billion yen, or US$ 1.5 billion.

With this development, will Square Enix still push through with their plan to expand into Western territories? If anything, the company intends to go into new frontiers into order to improve their output. "We need to go beyond traditional Square Enix," said Squeenix president Yoichi Wada. But how to they exactly plan to do that? Do stay tuned for updates.