GREE Annual Securities Report 2019

The 2019 Annual Securities Report for GREE, Inc. provides a comprehensive overview of the company’s financial performance, governance structure, and operational strategy for the fiscal year ending June 30, 2019. Operating primarily as an online media business, GREE focuses on mobile gaming, advertising, and live entertainment, anchored by its Engine, IP, and Global strategy. The report serves as a formal disclosure of the company’s fiscal health, internal controls, and risk management protocols, reflecting a period of significant financial contraction and strategic transition.

Financially, the company experienced a downturn during the 2019 fiscal year, with consolidated net sales declining 9.0% to 70,936 million yen and operating profit falling 41.9% year-on-year. This performance was impacted by increased investment activities, impairment losses on goodwill related to the acquisition of ORATTA, Inc., and a general decline in the mobile gaming sector. Despite these challenges, GREE maintains a stable financial foundation, characterized by an 89.9% equity ratio, 84,472 million yen in cash and equivalents, and an absence of long-term interest-bearing debt. The company continues to prioritize shareholder returns, maintaining a dividend policy targeting a 2% dividend on equity ratio and a minimum 20% consolidated payout ratio.

Operational risks remain a central concern, with management identifying vulnerabilities in game development costs, technological shifts, and regulatory compliance. To mitigate these, GREE employs a robust corporate governance framework featuring an executive officer system, independent outside directors, and an Audit & Supervisory Board. By leveraging its strong cash position and focusing on new ventures like the REALITY virtual YouTuber platform, the company aims to navigate market volatility while maintaining strict internal controls and transparency. The report concludes with an unqualified audit opinion from Ernst & Young ShinNihon LLC, confirming the integrity of the company’s financial reporting and internal governance standards.