KLab Financial Results Briefing for the Fiscal Year Ended August 2011

KLab’s financial results for the fiscal year ended August 2011 demonstrate a period of significant growth, characterized by a successful pivot toward the social gaming market. The company reported annual sales of 5,664 million yen, with operating income reaching 961 million yen, representing an operating margin of 17.0%. This performance marks a substantial upward trend compared to previous years, driven primarily by the rapid expansion of the social business segment, which accounted for 63% of total sales.

The company’s success is attributed to a robust organizational structure that emphasizes a short-term PDCA (Plan-Do-Check-Act) cycle for game optimization, a quasi-studio system for knowledge sharing, and the strategic use of licensed intellectual property. By June 2011, the company surpassed 10 million registered social game players. Key operational highlights include the successful launch of multiple titles, the completion of smartphone porting for existing games, and the establishment of international partnerships, such as a collaboration with the Chinese mobile game company Pearl in Palm.

Looking forward, the company intends to maintain this momentum by maximizing profits from its domestic social game portfolio while aggressively pursuing a "Worldwide x Smartphone" strategy. This includes expanding into global smartphone application markets and leveraging Facebook-based architectures. Furthermore, the company is diversifying its business model by developing non-game social services, such as the "Cheerz" social layer service and a social recruiting portal.

Projections for the first quarter of the fiscal year ending August 2012 indicate continued acceleration, with estimated sales of 2,917 million yen and an operating income of 710 million yen. These forecasts reflect the company's commitment to balancing stable infrastructure and licensing revenue with the high-growth potential of its social gaming and smartphone application divisions.