First Quarterly Report 2015

IGG Inc. demonstrated resilient year-over-year growth during the first quarter of 2015, characterized by a 21.5% revenue increase to US$53.6 million and a 2.9% rise in profit to US$14.0 million. This performance was underpinned by a mobile-first strategy, with mobile titles accounting for 92.9% of total revenue, largely driven by the continued success of Castle Clash. Despite this annual progress, the company faced an 11.4% sequential decline in revenue compared to the final quarter of 2014, a downturn attributed to a sparse new-game release schedule, unfavorable currency fluctuations, and the implementation of new European Union value-added tax regulations.

The company’s operational focus remained on global expansion and infrastructure development, with operations spanning nine countries and 94% of revenue originating from North America, Europe, and Asia. To sustain this momentum, the organization reached a total of 240 million player accounts and initiated investments in advertising platforms and external game developers like Nerd Kingdom. While gross profit reached US$36.9 million, the gross profit margin contracted to 68.8%, reflecting the rising channel costs inherent in mobile game distribution.

Corporate governance and equity management remained central to the period’s activities. Eight controlling shareholders maintained a formal agreement to act in concert on material operational matters, while the company actively managed its share option and award schemes to incentivize directors and personnel. As of March 31, 2015, the firm continued to align with standard corporate governance codes, though it maintained a consolidated leadership structure with Mr. Zongjian Cai serving as both chairman and CEO. Looking ahead, the company aims to leverage a robust pipeline of approximately 30 new titles to drive future growth and offset the increased operational costs encountered during the quarter.