GREE Annual Report 2011

Key insights

6 takeaways

01
GREE reported 64.1 billion yen in consolidated net sales and 31.1 billion yen in operating income for 2011, driven by a portfolio of over 1,100 titles.See it on page 42
02
The company is pursuing a long-term goal of reaching one billion global users, building upon its existing base of approximately 190 million registered users.See it on page 11
03
Strategic international expansion is being executed through the acquisition of OpenFeint and partnerships with major entities including Tencent and SK Telecom.See it on page 20
04
GREE is pivoting toward the smartphone market by utilizing development tools like Unity and scaling its proprietary ad network, AdLantis, to support third-party developers.See it on page 19
05
Management identifies intense market competition, rapid technological shifts, and the complexities of international regulatory compliance as the primary risks to future performance.See it on page 34
06
The company maintains a robust corporate governance framework, including independent oversight and 24/7 monitoring, to manage risks related to system stability and intellectual property.See it on page 24

Summary

GREE, Inc. stands as a dominant force in the 2011 social gaming landscape, characterized by rapid international expansion and a strategic pivot toward the burgeoning smartphone market. With consolidated net sales reaching 64.1 billion yen and an operating income of 31.1 billion yen, the company successfully leveraged a portfolio of over 1,100 titles to engage a massive user base. Headquartered in Tokyo and listed on the Tokyo Stock Exchange, the organization operates with a clear objective: to transition from its current scale of approximately 190 million registered users toward a long-term goal of one billion global participants.

The company’s growth strategy centers on the creation of a unified, borderless social gaming ecosystem. Key milestones in 2011 included the acquisition of OpenFeint and the formation of strategic alliances with international partners such as Tencent and SK Telecom. By integrating these platforms and utilizing development tools like Unity, the company aims to lower entry barriers for third-party developers while scaling its proprietary ad network, AdLantis. This expansion is supported by a robust corporate governance framework, which includes independent oversight and a dedicated internal audit office to ensure transparency and maximize shareholder value.

Despite this momentum, the company faces significant operational and market-related risks. Management identifies intense competition, rapid technological shifts, and the complexities of maintaining regulatory compliance across diverse jurisdictions as primary threats to future performance. To mitigate these, GREE employs strict internal controls, 24/7 monitoring for user safety, and comprehensive intellectual property protections. While the company remains focused on aggressive growth and the retention of key personnel, it acknowledges that potential system failures, evolving legal landscapes, and reliance on third-party payment processors necessitate continuous capital investment and rigorous risk management to sustain its market position.