FY2014 Second Quarter Financial Results

GREE reported second-quarter net sales of ¥32.6 billion and operating income of ¥9.2 billion for the 2014 fiscal year, reflecting a strategic focus on stabilizing profitability amidst a shifting mobile landscape. By implementing a 15% reduction in fixed costs and achieving ¥2.1 billion in total cost savings, the company successfully mitigated profit declines. A significant transition in consumer behavior is evident as smartphone coin consumption rose to 68% of the total mix, signaling a decisive move away from legacy feature phone platforms toward modern mobile ecosystems.

The native game segment reached a critical milestone by achieving monthly profitability in overseas operations as of December 2013. This international growth was largely propelled by the success of titles such as Knights & Dragons, which generated over $5 million in revenue within a 30-day window. Domestically, the web game business showed signs of recovery with a 15% month-over-month increase in coin consumption, supported by the launch of several high-performing partner titles. These operational successes are bolstered by a robust pipeline of upcoming releases across diverse genres, which management expects will drive a full turnaround by the fourth quarter.

Beyond its core gaming operations, the company is diversifying into advertising, venture capital, and offline entertainment to broaden its revenue base. Organizational adjustments include a total headcount of 2,051 employees and the establishment of a new customer support center in Sendai to improve service quality. As the company enters its tenth year of operation, it remains focused on maintaining strict cost controls while expanding its global footprint and diversifying its business domains to ensure long-term sustainability in the competitive digital entertainment market.