DeNA FY2017 Earnings Results Briefing: Q&A Summary

Key insights

6 takeaways

01
DeNA is prioritizing the stabilization of its core gaming business while targeting significant financial contributions from new ventures, specifically taxi dispatch and social live streaming, by 2020.See it on page 1
02
Management defines a 'major hit' game as a title capable of generating approximately 1 billion yen in monthly revenue.See it on page 2
03
The company is adopting a conservative financial strategy by scaling fixed costs, such as marketing and outsourcing, strictly in proportion to top-line revenue performance rather than aggressive spending.See it on page 1
04
High-profile upcoming titles, including Mario Kart Tour, are excluded from current financial guidance due to the inherent uncertainty of release schedules.See it on page 1
05
Investments in the TaxiBell service and live streaming platforms like SHOWROOM and Pococha are projected to remain high through 2019.See it on page 1
06
DeNA is focusing its R&D efforts on growth areas like live streaming and taxi dispatch while explicitly avoiding speculative sectors such as cryptocurrency.See it on page 3

Summary

DeNA’s fiscal year 2017 earnings briefing provides a strategic outlook for the company’s gaming and emerging business segments. The primary objective is to balance the stabilization of the core gaming business with proactive, long-term investments in new sectors, specifically taxi dispatch services and social live streaming. The company maintains a cautious financial approach, emphasizing the management of fixed costs in alignment with revenue growth while targeting significant contributions from new ventures by 2020.

In the gaming segment, the company reports a softening decline in virtual currency consumption, bolstered by third-party titles. While the pipeline includes several new projects and the anticipated launch of Mario Kart Tour, these high-profile titles are excluded from current financial guidance due to the uncertainty of release schedules. Management defines a major hit as a title generating approximately 1 billion yen in monthly revenue. To maintain profitability, the company intends to scale fixed costs—such as marketing and outsourcing—only in proportion to top-line performance, prioritizing profit growth over aggressive spending even if new titles exceed performance expectations.

Beyond gaming, the company is prioritizing the expansion of its TaxiBell service and social live streaming platforms, including SHOWROOM and Pococha. Investment in these areas is projected to remain high through 2019, with a goal of achieving meaningful financial contributions by 2020. The company differentiates its taxi service by bypassing traditional radio-based dispatch systems and views the live streaming market as a space capable of supporting multiple successful platforms. Despite the evolving regulatory landscape, such as the EU’s General Data Protection Regulation, the company remains committed to legal compliance while focusing its R&D efforts on high-potential growth areas rather than speculative sectors like cryptocurrency.