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Financial
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.
GREEMar 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 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
FY2014 First Quarter Financial Results
The financial results for the first quarter of fiscal year 2014 reflect a strategic pivot toward smartphone-centric operations and strict cost management. While net sales decreased quarter-over-quarter to ¥35.3 billion, operating profit rose to ¥9.8 billion, a ¥2.0 billion increase driven by a 12% reduction in total costs. This improvement was achieved through a ¥3.7 billion cut in advertising and fixed expenses, successfully meeting cost-reduction targets ahead of schedule. However, the period also saw a ¥5.2 billion extraordinary loss due to asset write-offs for underperforming titles and provisions for a voluntary retirement program. The operational focus has shifted heavily toward the smartphone market, which now accounts for approximately 65% of total coin consumption. While coin consumption on feature phones continues to decline, smartphone consumption grew by ¥1.6 billion during the quarter. This growth was particularly strong in native game apps for overseas markets and third-party browser games. Overseas operations are currently on track to reach monthly profitability by the end of 2013, supported by the horizontal deployment of successful game engines and marketing techniques. Management expects a full turnaround in sales and profits by the fourth quarter of FY2014. This outlook is based on a revised development pipeline that prioritizes high-quality releases and a transition into new genres beyond traditional card battle games. By realigning development resources and maintaining a leaner cost structure, the company aims to achieve a 15% year-over-year reduction in fixed costs by the end of the fiscal year while expanding its presence in the global native app market.
GREENov 2013