FinancialGREE
FY2019 Second Quarter Financial Results
1 Feb 201932 pages~13 min full read
GREE reported Q2 FY2019 net sales of ¥17.7 billion and operating income of ¥1.0 billion, reflecting a year-over-year decline in profitability due to deliberate reinvestment strategies.
The company maintains a strong liquidity position with ¥86.9 billion in net cash, which is being deployed to fund the development of the REALITY Avatar platform and the growth of the media app aumo.
GREE is shifting its business model from domestic mobile dominance toward a global, multi-platform strategy, including self-distribution in international markets and the release of titles like Fishing Star on Nintendo Switch.
Operating income is projected to decline further in Q3 to between ¥0.3 billion and ¥0.8 billion as the company continues to absorb high development and overseas marketing costs.
To offset investment costs, the organization is streamlining operations by withdrawing from unprofitable titles and optimizing its workforce, which totaled 1,701 employees as of December 2018.
Core intellectual properties, specifically DanMachi and Another Eden, are being prioritized for international expansion to support the company's long-term growth objectives.
GREE reported second-quarter net sales of ¥17.7 billion and operating income of ¥1.0 billion for the fiscal year ending June 2019. While these figures represent a year-over-year decline in profitability, they align with internal forecasts and reflect a deliberate period of reinvestment. The company is currently prioritizing long-term growth through increased fixed costs associated with full-scale development for new titles and the expansion of overseas distribution for core intellectual properties such as DanMachi and Another Eden. This strategic shift includes a transition toward self-distribution in international markets and the diversification of the portfolio across multiple platforms, exemplified by the release of Fishing Star on the Nintendo Switch.
The financial landscape is characterized by a robust net cash position of ¥86.9 billion, providing the necessary liquidity to fund the development of the REALITY Avatar livestreaming platform and the growth of the award-winning media app aumo. Despite a projected dip in third-quarter operating income to between ¥0.3 and ¥0.8 billion, the organization is streamlining operations by withdrawing from unprofitable titles and optimizing its workforce. As of December 2018, the group employed 1,701 personnel, with the vast majority concentrated in the Game and Entertainment segment to support its multiplatform and global expansion initiatives.
Ultimately, the current fiscal performance underscores a transition from domestic mobile dominance toward a global, multi-faceted entertainment model. By leveraging first-party IPs and expanding into the VTuber and advertising media sectors, the strategy aims to stabilize future earnings through a broader geographic and platform reach. Although development investments and overseas marketing costs currently weigh on margins, the focus remains on strengthening media potential and establishing a sustainable international presence across Asia and other global markets.
