Summary of Main Questions and Answers at the FY2017 Second Quarter GREE Results Briefing

The second quarter fiscal year 2017 financial briefing for GREE highlights a strategic pivot toward balancing internal intellectual property development with high-profile partner collaborations. A primary focus of the mid-term pipeline is the joint development of a smartphone version of Wild Arms with ForwardWorks, currently slated for release in fiscal year 2018 or later. Management intends to maintain a diversified portfolio by combining established fan bases from partner IP with original assets, while simultaneously refining the release schedule for six additional titles expected to launch across the third and fourth quarters of the current fiscal year.

Operational efficiency remains a core objective for the game operations business. To stabilize earnings and control costs, the company is shifting specific operational tasks to Vietnam and leveraging a larger portfolio to improve marketing efficiency. While coin consumption for existing overseas titles has seen a quarter-on-quarter decline, the company is mitigating this through the development of new international titles and a rigorous evaluation process for underperforming games. Management indicated a willingness to shutter titles that do not meet growth expectations or lack sufficient content depth to maintain user momentum.

Beyond core gaming, significant investments are being directed toward video advertising and virtual reality. The acquisition of 3Minute serves as a strategic move to bolster video production and marketing capabilities. Although these segments currently require upfront investment, the company targets overall profitability for the new business segment by fiscal year 2019. Despite an anticipated short-term decline in operating income for the third quarter due to rising fixed costs associated with new launches, the long-term outlook emphasizes a transition toward sustainable growth through diversified media and enhanced development capabilities.