Related Documents
Financial
FY2014 Fourth Quarter Financial Results
Fiscal year 2014 marked a period of structural transition for GREE, characterized by a decline in net sales to ¥125.6 billion and operating income to ¥35.0 billion. These financial contractions were primarily driven by the rapid obsolescence of the feature phone market and a temporary shortage of breakout smartphone hits. In response, the organization aggressively streamlined its operations, reducing fixed costs by 31% and ending the year with a strengthened cash position of ¥65.5 billion. This fiscal discipline provided the necessary liquidity to fund a comprehensive strategic shift toward native mobile application development. The core of this transformation involves a decisive pivot to native games for fiscal year 2015, with plans to triple native game operations and expand the Japanese studio headcount to 1,000 employees. While the legacy web game business is being optimized for stable cash flow, the primary growth engine is now centered on high-performance titles like Shometsu Toshi and the Wright Flyer Studios label. This internal restructuring is complemented by an international strategy that achieved quarterly profitability in 2014 through success in the hardcore and mid-core genres. Key drivers included the expansion of titles like Knights & Dragons and strategic cross-border collaborations, such as developing a Naruto mobile title for the Chinese market. Looking forward, the strategy prioritizes high-ARPU titles and global publishing efficiency. By doubling production lines and appointing new leadership to oversee international operations, the focus has shifted toward scaling native hits across both iOS and Android platforms. With a global workforce of nearly 1,900 employees and a user base of 53.7 million in Japan, the objective for the coming year is to leverage localized overseas releases and third-party IP to reverse the recent sales decline and establish a sustainable lead in the competitive smartphone gaming landscape.
GREEAug 2014
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
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
Financial
FY2015 Second Quarter Financial Results
GREE’s financial performance for the second quarter of fiscal year 2015 reflects a company in the midst of a significant structural transition, characterized by a pivot toward native mobile applications and a diversification of its business portfolio. While net sales reached ¥24.1 billion and operating income of ¥4.7 billion exceeded initial forecasts, the period was marked by a substantial net loss of ¥7.7 billion. This deficit was driven primarily by an ¥18.4 billion extraordinary loss resulting from goodwill impairment charges related to the acquisitions of OpenFeint and Pokelabo. Despite these write-downs, the organization maintains a stable full-year operating income forecast of ¥20.0 billion, supported by a robust net cash position of ¥67.60 billion and a reduction in interest-bearing debt. The strategic focus has shifted decisively toward native smartphone games to offset the gradual decline of legacy web-based titles. This transition is evidenced by a development pipeline of 17 new titles and a dedicated headcount of 550 developers. Successes such as Shometsu Toshi, which reached the Top 30 grossing charts, and revenue growth in the United States market demonstrate the viability of this native-first approach. Furthermore, the company is actively diversifying into non-gaming sectors to secure long-term growth, notably through the launch of the AdColony video advertising platform and the acquisition of the home renovation service Renoco. Operational data indicates that while total coin consumption is trending downward globally, the revenue mix is increasingly reliant on third-party titles, which now account for 38% of the ecosystem. To sustain this evolution, the company is investing in human capital through partnerships like MakeSchool to bolster its mobile app development expertise. By stabilizing its web game base and aggressively expanding its native game and advertising footprints, the organization aims to navigate the shifting mobile landscape while returning value to shareholders through a commemorative 10th-anniversary dividend.
GREEFeb 2015