DeNA Q4 FY2013 Financial Results

DeNA’s financial results for the fourth quarter of fiscal year 2013 reflect a period of structural transition as the company shifts its focus from browser-based games to native mobile applications. The company reported a quarterly operating profit of 9.7 billion JPY, slightly exceeding its guidance of 9.5 billion JPY. However, overall revenue and operating profit experienced a decline compared to the previous quarter, primarily driven by reduced coin consumption within the Japan-based social media and gaming segment.

The company’s primary business remains the Social Media segment, which includes the Mobage platform and various entertainment services. While the Japan game business saw a decline in browser game engagement, the company successfully launched 33 new first- and second-party titles between August 2013 and March 2014, helping to stabilize monthly active users. Internationally, the company recorded approximately 55 million USD in coin consumption, with growth noted in the Greater China region. Meanwhile, the E-commerce segment demonstrated resilience, achieving 5.0 billion JPY in revenue, a 8% year-over-year increase, supported by strong transaction volumes on DeNA Shopping.

Operational costs were managed through a 200 million JPY reduction in fixed expenses, though depreciation and amortization costs rose due to increased investment in new game titles. Looking ahead to fiscal year 2014, the company intends to prioritize the development of native apps, aiming to allocate approximately 80% of new game development resources to this category. Management remains committed to maintaining gaming as the core business while simultaneously investing in new communication and content platforms, such as Manga Box and Showroom, to secure long-term growth. The financial guidance for the first quarter of fiscal year 2014 anticipates continued pressure on revenue and operating profit as the company navigates the ongoing decline in browser game engagement.