FY2023 Second Quarter Financial Results

GREE’s financial results for the second quarter of fiscal year 2023 reflect a period of strategic global expansion and aggressive investment in the Metaverse, despite a decline in overall profitability. The company reported net sales of ¥16.6 billion and an operating income of ¥1.7 billion. While operating income surpassed forecasts due to the sustained performance of the hit title Heaven Burns Red, the company recorded a net loss of ¥0.9 billion for the quarter, primarily driven by foreign exchange losses and valuation losses on investment securities.

The Internet and Entertainment segment remains the primary revenue driver, bolstered by the success of Heaven Burns Red, which received multiple accolades in Google Play’s Best Games of 2022. To sustain growth, the company is executing a global rollout, specifically targeting Korean and traditional Chinese markets. Simultaneously, the Metaverse business, centered on the REALITY platform, demonstrated steady growth in overseas sales. GREE is prioritizing the expansion of REALITY’s communication functions and world-building features, such as the Tokyo Dome World collaboration, to energize its international user base.

The Investment and Incubation segment manages total assets of ¥77.3 billion. Although asset revaluation led to a slight quarter-on-quarter decrease in total value, the company continues to see high long-term returns from its venture capital funds and startup investments. GREE’s cost structure showed a slight reduction in total costs to ¥14.8 billion, aided by lower variable expenses. Looking ahead, the company anticipates stable income but expects a year-on-year decline in total profit as it continues to pivot toward aggressive medium-to-long-term investments in the Metaverse and new intellectual property development.