FinancialGREE
FY 2013 Second Quarter Financial Results
12 Feb 201323 pages~13 min full read
Full-year forecasts were revised downward by 17-18% for sales and 29-32% for profits due to the postponement of major titles and underperforming overseas KPIs.
Q2 net sales reached 39,407 million yen, a 4% quarter-on-quarter increase driven by the consolidation of Pokelabo, Inc. and recovering coin consumption in Japan.
Year-on-year performance declined, with net sales down 5% and operating profit falling 37% to 14,258 million yen.
The company is struggling with a structural transition from feature phones to smartphones, resulting in declining legacy advertising revenue and higher marketing and labor costs.
International coin consumption showed an upward trend starting in October 2012, bolstered by the success of the title Modern War in the United States.
Future strategy prioritizes a shift toward smartphone-native content and new genres beyond card battle games to drive a projected recovery in fiscal year 2014.
The second quarter of fiscal year 2013 marks a period of strategic transition, characterized by a return to quarter-on-quarter revenue growth alongside a significant downward revision of full-year forecasts. Net sales reached 39,407 million yen, a 4% increase over the previous quarter, driven by the consolidation of Pokelabo, Inc. and a recovery in coin consumption within the Japanese market. However, year-on-year performance showed a decline, with net sales down 5% and operating profit falling 37% to 14,258 million yen. This contraction is attributed to the ongoing shift from feature phones to smartphones, which has led to declining legacy advertising revenue and increased costs associated with aggressive marketing and labor.
The geographic scope of these results covers Japan and global markets, specifically North America, Europe, and South Korea. In Japan, coin consumption rose across both third-party and in-house titles, particularly within the growing native app segment. Internationally, monthly coin consumption began an upward trend in October 2012, supported by the success of titles like Modern War in the United States. Despite these gains, the full-year outlook was revised downward by approximately 17-18% for sales and 29-32% for profits due to the postponement of several major titles and lower-than-expected KPIs for overseas games.
Future strategy focuses on accelerating the transition to a global social gaming leader by investing heavily in smartphone-native content and new genres beyond traditional card battle games. Management plans to utilize efficient marketing to balance lifetime value against installation costs while strengthening compliance and user safety through enhanced monitoring systems. These upfront investments in development and customer support are intended to drive a recovery in sales and profit growth beginning in fiscal year 2014.
