GREE Annual Securities Report: 20th Fiscal Term

Key insights

7 takeaways

01
GREE's consolidated net sales fell 18.7% to 61,309 million yen in the fiscal year July 2023–June 2024, and operating profit dropped 52.1%.See it on page 120
02
GREE retains a strong balance sheet with an equity ratio of 73.7% and cash equivalents of 77,288 million yen, providing liquidity for its restructuring.See it on page 38
03
GREE is transitioning into a holding company, rebranded as GREE Holdings, Inc. effective January 2025, alongside consolidation of its Commerce and DX business segments.See it on page 113
04
The Metaverse platform reached profitability and is positioned as a key pillar for future growth, while the Game and Anime segment faced performance challenges.See it on page 18
05
Valuation of unlisted stocks held for business alliances and incubation was identified as a key audit matter, requiring scrutiny of management's earnings projections and impairment testing.See it on page 134
06
Executive incentives are tied to long-term corporate value through an Executive Remuneration BIP Trust and share acquisition rights, some linked to ambitious market capitalization targets.See it on page 39
07
Sequoia, Inc. remained the majority shareholder as of June 2024, providing stability during the group's transition.See it on page 37

Summary

The 20th fiscal year report for GREE, Inc. (July 2023–June 2024) details a period of significant financial contraction and strategic organizational restructuring. The company reported consolidated net sales of 61,309 million yen, an 18.7% decline from the previous year, and a 52.1% drop in operating profit. Despite these headwinds, GREE maintained a stable financial foundation, characterized by an equity ratio of 73.7% and cash equivalents totaling 77,288 million yen. This liquidity supports the company’s ongoing transition toward a holding company structure, rebranded as GREE Holdings, Inc., effective January 2025, alongside a consolidation of its Commerce and DX business segments.

The company’s operations span the Game and Anime, Metaverse, DX, Commerce, and Investment sectors. While the Game and Anime segment faced performance challenges, the Metaverse platform achieved profitability, serving as a key pillar for future growth. To align management interests with long-term corporate value, GREE utilizes an Executive Remuneration BIP Trust and various share acquisition rights, some of which are tied to ambitious market capitalization targets. Governance remains a central focus, with an Audit & Supervisory Committee composed entirely of independent outside directors and a rigorous internal control framework overseen by Ernst & Young ShinNihon LLC.

Risk management remains critical, particularly regarding the valuation of unlisted stocks held for business alliances and incubation. Auditors identified the valuation of these assets as a key audit matter, necessitating careful review of management’s earnings projections and impairment testing. While the company faces intense competition in the smartphone gaming market and strict regulatory requirements, it continues to prioritize sustainable growth through TCFD-aligned climate disclosures and human capital development. As of June 2024, Sequoia, Inc. remains the majority shareholder, providing stability as the group navigates its transition into a holding company model.