FY2013 Third Quarter Financial Results

GREE’s financial performance during the third quarter of fiscal year 2013 reflects a period of significant transition and operational restructuring. Net sales declined 4% quarter-on-quarter to ¥37.8 billion, while operating profit fell 24% to ¥10.8 billion, primarily due to the underperformance of smartphone titles in the Japanese market. Despite these domestic challenges, overseas coin consumption doubled, driven by the success of U.S.-based studios. However, the company recorded a ¥4.03 billion extraordinary loss for asset write-offs and issued a downward revision for its full-year forecast, signaling a need for a fundamental shift in business strategy.

To address these financial pressures, management is implementing a "selection and concentration" strategy focused on streamlining the title portfolio and enforcing rigorous cost controls. This includes closing the China studio, consolidating office space, and narrowing the development pipeline to approximately 15–20 domestic and five overseas smartphone titles for the year. The company is also leveraging strategic joint ventures with partners like Yahoo! JAPAN and CyberAgent, while integrating Pokelabo’s expertise to improve performance on iOS. The primary objective is to achieve cash-basis profitability for overseas operations by December 2013 through the scaling of successful U.S. studio models.

Despite the recent downturn, the company maintains a strong market position with a domestic user base of 40.8 million and a top-ten global ranking for sales on both Google Play and the App Store. Efforts to stabilize the user environment include resolving previous system failures regarding spending limits for minors and establishing new compliance committees with 24/7 monitoring systems. By prioritizing high-performing intellectual property and operational efficiency, the organization aims to recover profitability and accelerate development speed within the competitive global smartphone gaming landscape.