FinancialGREE
FY2018 First Quarter Financial Results
27 Oct 201731 pages~11 min full read
GREE reported Q1 FY2018 net sales of ¥21.6 billion and operating income of ¥2.7 billion, marking growth both quarter-on-quarter and year-on-year.
Revenue growth was primarily driven by high coin consumption in hit titles 'Another Eden' and 'SINoALICE', alongside a 2.4x increase in page views within the advertising and media segment.
The company is shifting its cost structure by increasing variable spending on advertising and platform commissions by ¥2.73 billion while reducing fixed costs by ¥0.64 billion.
GREE is pivoting its global strategy by closing select overseas bases to cut fixed labor costs while partnering with Sumitomo Corporation to export Japanese anime-based IP.
The development pipeline currently includes five titles, with a strategic focus on leveraging third-party intellectual property.
Management maintains a conservative net sales forecast of ¥40.5 billion for the first half of FY2018, citing expected performance declines in existing titles.
GREE’s financial results for the first quarter of fiscal year 2018 reflect a period of significant growth driven by the successful scaling of native mobile games and strategic investments in media operations. The company achieved net sales of ¥21.6 billion and an operating income of ¥2.7 billion, representing both quarter-on-quarter and year-on-year increases. This performance was primarily fueled by high coin consumption in hit titles such as Another Eden and SINoALICE, alongside the expansion of the advertising and media segment, where page views grew 2.4 times over the previous quarter.
The scope of these results covers the company’s consolidated global operations for the three-month period ending September 30, 2017. While the game and entertainment business remains the core revenue driver, the company is diversifying through its advertising and media arm and emerging VR initiatives. Geographically, the company is pivoting its strategy by closing certain overseas bases to reduce fixed labor costs while simultaneously signing joint publishing agreements with partners like Sumitomo Corporation to aggressively export Japanese anime-based intellectual property to international markets.
Methodological data indicates a shift in the cost structure, where a ¥2.73 billion increase in variable costs—driven by higher advertising spend and platform commission fees—was partially offset by a ¥0.64 billion reduction in fixed costs. The development pipeline remains robust with five titles currently in progress, primarily focusing on third-party IP. Looking ahead to the first half of FY2018, the company maintains a conservative forecast of ¥40.5 billion in net sales, anticipating a temporary decline in existing titles following their initial peak performance while continuing aggressive investment in growth-oriented media businesses.
