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

GREE, Inc. reported robust financial and operational performance for the third quarter of fiscal year 2011 (ending June 30, 2011). Net sales rose 14% to ¥16.4 billion from the prior quarter and 77% year‑over‑year, driven by continued growth in paid services from its flagship social networking platform and expanding advertising revenue. Operating profit increased 18% to ¥8.2 billion, maintaining a high margin of roughly 50%. The company’s cash position strengthened, with operating cash flow at ¥4.2 billion and total assets growing 15% to ¥46.4 billion, while retained earnings surged 20% year‑over‑year.

User metrics underscored the platform’s dominance: registered members exceeded 25 million, with a stable demographic profile—48% of users in their 30s and 40s, a group with higher average spend. Geographic distribution remained concentrated in Japan, but strategic initiatives aimed at international expansion were highlighted, notably the planned acquisition of OpenFeint (75 million users) and partnerships with Tencent to tap a 650‑million user base.

Operationally, GREE expanded its mobile ecosystem through the “GREE Platform for Smartphone,” launching partner and original apps across web, iOS, and Android with multiple payment options. Monetization efforts included a new ad program targeting partner apps and the introduction of “GREE Ad Program” to broaden advertising revenue streams.

The company also addressed external shocks, noting minimal impact from the Tohoku earthquake on paid‑service income and launching a donation portal that raised ¥188 million from members, supplemented by a corporate contribution of ¥100 million. Safety and security measures were reinforced through enhanced content monitoring, age verification protocols, and educational outreach.

Strategically, GREE outlined a multi‑pronged growth plan: intensifying original game development, expanding the smartphone platform and monetization base, accelerating international platform deployment via acquisitions and partnerships, and scaling advertising operations. These initiatives aim to consolidate GREE’s position as Japan’s leading social networking service while positioning it for global leadership in the social game and platform markets.