FinancialGREE Inc.
FY2016 Second Quarter Financial Results
4 Feb 201631 pages~13 min full read
GREE reported Q2 FY2016 net sales of ¥18.1 billion and operating income of ¥4.0 billion, exceeding internal targets despite a year-over-year revenue decline.
See it on page 9Profitability was supported by a ¥3.2 billion reduction in fixed costs and the stabilization of coin consumption in overseas markets.
See it on page 11The company is shifting focus to native game development, with 11 titles currently in the pipeline and the domestic title 'Shometsu Toshi' achieving record monthly sales.
See it on page 12Legacy web game operations have been transitioned to a specialized subsidiary, Funplex, to maintain steady profitability while managing the natural decline of older titles.
See it on page 19GREE is diversifying into non-gaming sectors, specifically targeting multi-billion yen sales by FY2018 for its Renoco renovation service and Lespas fitness network.
See it on page 22Full-year fiscal guidance is set at ¥72.0 billion in net sales and ¥14.0 billion in operating income, reflecting a conservative outlook on legacy web game performance.
See it on page 2The company is investing in emerging technologies through the GREE VR Studio to secure early market positioning.
See it on page 24GREE’s financial results for the second quarter of fiscal year 2016 reflect a strategic transition toward native game development and diversified service platforms. The company reported net sales of ¥18.1 billion and an operating income of ¥4.0 billion, surpassing internal targets despite a year-over-year decline in revenue. This performance was driven by successful cost-control measures, including a ¥3.2 billion reduction in fixed costs compared to the previous year, and the stabilization of coin consumption in overseas markets.
The geographic scope focuses primarily on Japan, with significant operational updates regarding North American and European markets. In the native game segment, the company highlighted the success of domestic titles like Shometsu Toshi, which achieved record monthly sales following a targeted television advertising campaign. The development pipeline remains robust with 11 titles in progress, including high-profile collaborations and first-party projects scheduled for release in the second half of the fiscal year. Conversely, the legacy web game business is being managed for steady profitability through the establishment of Funplex, a specialized game operations subsidiary.
Beyond gaming, there is a clear expansion into home-related services and health and fitness platforms. The Renoco online renovation service and the Lespas fitness affiliate network both reported steady growth, with the company targeting multi-billion yen sales for these segments by fiscal year 2018. Additionally, the company is investing in emerging technologies, specifically through the GREE VR Studio, to secure early market positioning.
The financial outlook for the full fiscal year remains conservative, forecasting net sales of ¥72.0 billion and operating income of ¥14.0 billion. This guidance accounts for the natural decline of older web games while anticipating the gradual earnings contribution from new native titles and the continued scaling of non-gaming business lines. Management intends to maintain strict control over server and outsourcing costs while selectively investing in high-potential marketing opportunities.
