Related Documents
Financial
FY2013 Fourth Quarter Financial Results
The fiscal year ending June 2013 marked a significant transitional period for GREE, characterized by a decline in overall financial performance alongside a strategic pivot toward the smartphone market. Net sales fell to ¥152.2 billion, while operating profit experienced a 41% year-over-year drop to ¥48.6 billion. This downturn was primarily driven by the erosion of the legacy feature phone web game market and rising fixed costs. To address these challenges, the company recorded a ¥6.7 billion net extraordinary loss for asset write-offs, signaling a commitment to a "selection and concentration" strategy designed to streamline operations and reduce fixed costs by 10% by the end of the following fiscal year. Despite the contraction in traditional segments, the native games business emerged as a critical growth engine, achieving over 30% quarterly growth and accounting for more than 20% of total coin consumption by the fourth quarter. Success was bolstered by global franchises such as Knights & Dragons, which helped establish a stronger international footprint. Moving into fiscal year 2014, the growth strategy centers on the launch of approximately 25 new titles, focusing on smartphone-centric web games and high-performance native apps. The company is also diversifying its revenue streams by expanding into advertising, merchandise, and other non-gaming ventures. Operational stability is supported by a domestic user base of 44.8 million, predominantly composed of adults over the age of 20. To maintain platform integrity and safety, extensive resources are dedicated to 24/7 content monitoring and age verification protocols. These efforts are complemented by industry-wide self-regulation through the Japan Social Game Association, focusing on the prohibition of real money trading and the promotion of educational outreach. This combination of fiscal restructuring, aggressive product development for mobile platforms, and robust safety standards forms the foundation for the company’s projected turnaround.
GREEAug 2013
Financial
FY 2013 Second Quarter Financial Results
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.
GREEFeb 2013
Financial
FY2013 First Quarter Financial Results
GREE’s financial results for the first quarter of fiscal year 2013 reveal a period of strategic transition and global expansion. While net sales of 37.9 billion yen represented a 5% decline from the previous quarter, they marked a 25% increase year-over-year. Operating profit reached 15.7 billion yen, down 17% sequentially due to increased labor costs and upfront investments associated with international growth. Despite the quarterly dip, monthly sales hit a trough in July 2012 and entered a recovery trend by August, driven by a strengthening lineup of social games and improved operational capabilities. The strategic focus centers on shifting toward smartphone native applications and leveraging high-profile intellectual property (IP). Domestic growth is supported by partnerships with Yahoo! JAPAN and Pokelabo, while international efforts include the acquisition of Funzio and the establishment of a development studio in Vancouver. The portfolio is expanding through collaborations with major publishers like Konami, Square Enix, and NCSoft to launch titles based on franchises such as Metal Gear Solid and Final Fantasy. These initiatives aim to secure a dominant position in the global smartphone social game market. Beyond game development, the business structure is becoming more multilayered through new ventures in merchandising and mobile advertising partnerships, such as the agreement with MobPartner. The industry environment is also evolving with the establishment of the Japan Social Game Association (JASGA), which focuses on self-regulation, youth education, and improved customer support. To maintain platform safety, a 24-hour monitoring system and strict age verification protocols remain in place. These combined efforts in IP acquisition, global infrastructure, and platform safety are designed to accelerate growth heading into the holiday season and beyond.
GREENov 2012
Financial
FY 2014 Third Quarter Financial Results
The third quarter of fiscal year 2014 reflects a period of strategic transition characterized by rigorous cost management and a shift in product focus. Net sales reached ¥31.07 billion with an operating income of ¥9.95 billion, maintaining a robust 32% operating margin despite a general decline in revenue. This profitability was largely driven by a 12.6% reduction in fixed costs and the achievement of quarterly profitability within overseas operations across the United States, Canada, and South Korea. While a business turnaround was initially anticipated sooner, revised release schedules for new titles have pushed the projected recovery target into fiscal year 2015. The operational landscape shows a divergence between legacy web games and emerging native applications. Smartphone coin consumption for web games declined by 3% during the quarter, prompting a consolidation of existing titles and an accelerated push for new first-party and partner releases. Although Japanese-developed titles faced challenges in international markets, the broader native game segment reached a profitable milestone globally. To diversify revenue streams beyond traditional gaming, expansion is underway into commerce, advertising, and venture capital, supported by new development labels such as Wright Flyer Studios. Financial stability remains a core strength, with net cash increasing significantly to ¥44.78 billion and total liabilities decreasing by over ¥17 billion year-over-year. Despite a downward trend in Japanese market coin consumption compared to the previous fiscal year, the domestic user base remains substantial at 53.7 million, skewed toward a mature demographic aged 30 and above. As of March 31, 2014, the workforce of 1,894 employees is primarily concentrated in headquarters operations and native game development, signaling a long-term commitment to evolving the product pipeline toward modern mobile platforms.
GREEMay 2014