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Summary
The first‑quarter fiscal 2015 results show net sales of ¥25.4 billion and operating income of ¥6.4 billion, a decline in sales but a flat operating margin compared with the previous quarter due to a ¥1.4 billion cut in advertising costs. Net sales fell 9.9% year‑over‑year, driven by softer performance of existing titles in Japan and overseas markets. EBITDA rose modestly to ¥8.01 billion, while ordinary income increased by ¥2.27 billion largely from a ¥17.2 billion exchange gain on USD‑denominated loans. An extraordinary loss of ¥2.03 billion was recorded from write‑downs of assets related to discontinued titles, reducing net income to ¥3.48 billion. Cost structure analysis indicates a 7% reduction in total costs to ¥19.0 billion, largely from advertising (down 13% QoQ) and commission fees. Variable costs fell by ¥1.19 billion, while fixed costs decreased marginally. The company’s strategy focuses on accelerating native game development, having shifted resources from web games and added 12 new production lines. Three first‑party native titles are slated for launch in the winter, and partnerships with LINE and KDDI aim to expand cross‑border reach. For FY15 first half, the company forecasts net sales of ¥49.0 billion and operating income of ¥10.5 billion, assuming minimal seasonal impact and continued cost control. The outlook emphasizes native hit titles as the primary growth driver, with web games supporting earnings and new ventures in mobile video advertising and venture capital investments.
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Summary of main questions and answers at the FY2019 First Quarter GREE results briefing held on October 26, 2018 PDF
The briefing clarified GREE’s strategic outlook for FY2019, emphasizing a steady domestic game portfolio while pursuing growth overseas. In Japan, the company expects no major shift in performance for existing titles but plans to broaden multiplatform distribution and launch new releases in the second half of FY2019, projecting an earnings uptrend. Internationally, GREE is developing and self‑distributing overseas versions of current titles, targeting markets with high profitability potential. Human resource allocation reflects this focus: sufficient staff are dedicated to overseas distribution and new title development, while existing titles receive concentrated support for top performers and operational stability for less successful ones. China is identified as a priority market, with preparations underway to initiate operations and marketing. The company also highlights the Facebook Messenger platform as a high‑potential channel for new titles, indicating an expansion into social media gaming. Advertising strategy will be selective; overseas launches of self‑distributed titles will receive targeted, efficient campaigns rather than broad mass media spend. Regulatory compliance and consumer protection are addressed through company‑wide measures to prevent gacha system issues, including strengthened evaluation protocols and employee training. The REALITY livestreaming platform for VTubers is in an exploratory phase, with ongoing data collection on technology, planning, and marketing to build know‑how for future content expansion. Overall, GREE’s FY2019 strategy balances domestic stability with aggressive international diversification and platform innovation.
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