Financial Results for the Third Quarter of the Fiscal Year Ending on June 30, 2011

This financial report details the performance of GREE, Inc. for the third quarter of the fiscal year ending June 30, 2011. The primary thesis centers on the company’s successful transition into the smartphone market and its aggressive international expansion strategy. During this period, the company solidified its position as Japan’s leading social networking service (SNS), surpassing 25 million members. Financial results show significant growth, with net sales reaching 16,372 million yen, a 77% increase year-over-year, and operating profit rising 56% to 8,199 million yen. The company maintained a high operating profit margin of 50%, driven by the monetization of original games and the expansion of the GREE Platform.

The scope of the report covers domestic operations in Japan and initial global forays during the January to March 2011 period. Data indicates that while the Tohoku Region Pacific Coast Earthquake caused a momentary dip in user activity, the overall impact on performance was minimal. Demographic data reveals a balanced user base, with 48% of members aged 30 and above, a segment noted for higher average monthly payments. The methodology for these findings relies on consolidated financial statements, which were introduced for the first time this quarter, alongside internal user registration and engagement metrics.

Strategic conclusions emphasize a shift toward a global "ecosystem" reaching over 800 million users through alliances and acquisitions. Key developments include the acquisition of OpenFeint, which provides a 75 million user base primarily in North America, and a strategic alliance with Tencent in China. To support this growth, GREE established subsidiaries in North America and opened offices in Beijing, Singapore, and London. Future strategies focus on multi-OS compatibility for smartphones, diversifying payment methods, and enhancing the GREE Ad Program to support partner monetization. The report also highlights ongoing commitments to platform safety through 24-hour monitoring and age-restricted functionality.