FinancialGREE
FY2013 Fourth Quarter Financial Results
14 Aug 201338 pages~22 min full read
GREE reported a 41% year-over-year decline in operating profit to ¥48.6 billion and net sales of ¥152.2 billion for the fiscal year ending June 2013.
The company recorded a ¥6.7 billion net extraordinary loss for asset write-offs as part of a strategy to reduce fixed costs by 10% by the end of the following fiscal year.
Native games emerged as a primary growth engine, achieving over 30% quarterly growth and accounting for more than 20% of total coin consumption by Q4.
The company plans to launch approximately 25 new titles in fiscal year 2014, prioritizing smartphone-centric web games and high-performance native apps.
Financial performance was negatively impacted by the erosion of the legacy feature phone web game market and rising fixed costs.
GREE maintains a domestic user base of 44.8 million, primarily adults over the age of 20, supported by 24/7 content monitoring and age verification protocols.
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.
