FinancialGREE
FY 2015 First Quarter Financial Results
1 Nov 201432 pages~18 min full read
GREE reported Q1 FY2015 net sales of ¥25.4 billion, reflecting a decline due to softening performance in legacy web games both domestically and internationally.
Operating income remained stable at ¥6.4 billion, supported by a 7% reduction in total costs achieved through optimized labor, server expenses, and decreased mass-media advertising.
The company is aggressively pivoting to native mobile applications, increasing production lines to 12 and expanding its dedicated headcount to approximately 500 employees.
A ¥2.0 billion extraordinary loss was recorded following a portfolio review that resulted in the termination of underperforming titles, most notably the overseas project City of Rivals.
Despite a 10% decline in native game coin consumption to 10.2 billion, the company reported strong early performance from new titles including Shometsu Toshi and Cross Summoner.
The Q2 forecast is conservative, projecting ¥23.6 billion in net sales and ¥4.1 billion in operating income, with a continued focus on strict cost control.
Strategic growth initiatives include entering the mobile video ad market via a partnership with AdColony and pursuing cross-platform expansion through joint ventures with LINE and KDDI.
GREE’s financial results for the first quarter of fiscal year 2015 reveal a strategic pivot toward native mobile applications amid declining revenues from its legacy web game business. Net sales reached ¥25.4 billion, a decrease from the previous quarter driven by softening sales of existing titles in both Japan and overseas. Despite this top-line pressure, operating income remained stable at ¥6.4 billion due to a significant 7% reduction in total costs, primarily achieved by curbing mass-media advertising and optimizing labor and server expenses.
The company is aggressively shifting resources from web games to native game development, increasing its production lines to 12 and expanding its native development headcount to approximately 500. While native game coin consumption fell 10% to 10.2 billion coins, the company reported strong early performance from new titles like Shometsu Toshi and Cross Summoner. To mitigate risks, the firm recorded a ¥2.0 billion extraordinary loss following a portfolio review that led to the termination of underperforming titles, including the overseas project City of Rivals.
Geographically, the report covers GREE’s consolidated global operations, with specific focus on the Japanese and U.S. markets. Looking ahead to the second quarter, the company issued a conservative forecast of ¥23.6 billion in net sales and ¥4.1 billion in operating income. This outlook assumes minimal seasonal growth and prioritizes strict cost control. Strategic initiatives for the remainder of the half-year include expanding into the mobile video ad market through a partnership with AdColony and pursuing cross-platform growth via joint ventures with LINE and KDDI.
