GREE Holdings, Inc. Annual Securities Report: 21st Fiscal Term

Key insights

7 takeaways

01
GREE Holdings' consolidated net sales for the fiscal year ended June 30, 2025 fell 6.8% to 57,111 million yen, while profit attributable to shareholders dropped 74.2% to 1,194 million yen.See it on page 163
02
The core Game and IP businesses underperformed and drove the decline, while the Metaverse and Investment segments grew.See it on page 20
03
Effective January 2025, GREE moved to a holding company structure overseeing five sectors: Game, Metaverse, IP, DX, and Investment.See it on page 7
04
The reorganization separates strategic decision-making from execution through an executive officer system, aiming to improve agility, support sustainable growth, and maximize corporate value.See it on page 55
05
The company is betting on scaling emerging ventures such as the REALITY metaverse to offset intense competition in the smartphone gaming market.See it on page 15
06
The balance sheet remains strong, with 83,901 million yen in cash and cash equivalents and a 70.0% equity ratio.See it on page 100
07
Management is prioritizing recurring-revenue models in the DX segment and has introduced performance-linked executive compensation tied to Total Shareholder Return and operating profit. Ernst & Young ShinNihon LLC issued an unqualified audit opinion, including on the valuation of significant unlisted stock holdings.See it on page 12

Summary

GREE Holdings, Inc.’s 21st fiscal term report outlines the company’s strategic transition into a holding company structure, effective January 2025, to oversee a diversified portfolio spanning the Game, Metaverse, IP, DX, and Investment sectors. The primary thesis of this reorganization is to enhance operational agility, foster sustainable long-term growth, and maximize corporate value through a more focused management approach. By separating strategic decision-making from business execution via an executive officer system, the company aims to navigate intense competition in the smartphone gaming market and scale emerging ventures like the REALITY metaverse.

Financial performance for the fiscal year ended June 30, 2025, reflects a challenging period, with consolidated net sales declining 6.8% to 57,111 million yen and profit attributable to shareholders dropping 74.2% to 1,194 million yen. While the Metaverse and Investment segments demonstrated growth, the core Game and IP businesses underperformed. Despite these pressures, the company maintains a strong financial position, characterized by 83,901 million yen in cash and cash equivalents and an equity ratio of 70.0%. Management is responding to these results by prioritizing recurring-revenue models in the DX segment and implementing a performance-linked executive compensation structure tied to metrics such as Total Shareholder Return and operating profit.

The scope of this report covers the group’s operations in Japan and globally, focusing on the fiscal year 2025. Governance remains a central pillar, with the company utilizing independent outside directors and rigorous internal controls to manage risks related to regulatory compliance, data privacy, and intellectual property. Ernst & Young ShinNihon LLC has provided an unqualified opinion on the financial statements, confirming the effectiveness of internal controls and the fair presentation of the company’s financial position, including the valuation of significant unlisted stock holdings.