DeNA Q1 FY2016 Operating Results

Key insights

6 takeaways

01
DeNA reported a 9% quarter-over-quarter revenue increase to 38.3 billion yen and an 83% year-over-year surge in operating profit to 7.4 billion yen for Q1 FY2016.See it on page 3
02
The gaming segment remains the primary profit driver, focusing on long-term in-game operations for titles like Final Fantasy Record Keeper and Kinniku-man Muscle Shot.See it on page 10
03
The strategic partnership with Nintendo is set to expand in late 2016 with the launch of new mobile titles based on the Fire Emblem and Animal Crossing franchises.See it on page 13
04
Revenue growth was significantly bolstered by the sports segment, while curation media platforms like MERY are gaining traction in the brand advertising market.See it on page 15
05
DeNA is diversifying its business model by investing in automotive technologies, specifically targeting leadership in the self-driving field through new joint ventures.See it on page 16
06
The company maintains a stable financial position with 73.7 billion yen in cash and cash equivalents and a consolidated headcount of 2,497 employees.See it on page 22

Summary

DeNA’s operating results for the first quarter of fiscal year 2016 demonstrate a period of solid progress toward profit growth, characterized by a 9% quarter-over-quarter revenue increase to 38.3 billion yen and an 83% year-over-year surge in operating profit to 7.4 billion yen. This performance was largely bolstered by the sports segment, which saw significant revenue growth, alongside stable contributions from core gaming operations and curation media. The company’s financial strategy remains focused on strengthening its earnings base through in-game operations for key titles and the expansion of new business pillars.

The gaming segment, while experiencing a slight decline in revenue, remains the primary driver of profitability. The company is actively optimizing its portfolio by focusing on long-term in-game operations for first- and second-party native apps, such as Final Fantasy Record Keeper and Kinniku-man Muscle Shot. Furthermore, the strategic alliance with Nintendo continues to be a central growth initiative, with plans to launch titles based on the Fire Emblem and Animal Crossing franchises in late 2016. These efforts are complemented by a growing international presence, where new title launches in China have begun to contribute to top-line performance.

Beyond gaming, the company is diversifying into curation media and automotive technologies. Curation platforms, particularly MERY, are showing promise in brand advertising, while the company is positioning itself as a leader in the self-driving field through new joint ventures and infrastructure initiatives. With a consolidated headcount of 2,497 employees, the company maintains a stable financial position, reporting 73.7 billion yen in cash and cash equivalents. Management remains committed to achieving sustained medium-to-long-term growth by leveraging internet-based services and artificial intelligence across its diverse business segments.