FinancialGREE
Summary of Main Questions and Answers at the FY2017 Fourth Quarter GREE Results Briefing
1 Aug 20173 pages~3 min full read
GREE is pivoting its business model from web-based games to high-quality native applications to drive long-term earnings growth.
The company is prioritizing the development of native titles using both first-party and third-party intellectual property, exemplified by the smartphone adaptation of Wild Arms.
Financial performance is being impacted by higher commission fees and advertising costs associated with native apps, which the company is offsetting by closing development bases and streamlining overseas operations.
For Q1 FY2018, GREE plans to increase spending on outsourcing for quality assurance and operating systems, alongside higher marketing budgets for new product launches.
GREE is implementing a global strategy that features simultaneous development for Japanese and international markets, supported by localized operating systems.
Recent titles such as Library Cross Infinite and AKB48 Stage Fighter 2 Battle Festival have shown strong momentum, with pre-registration volumes exceeding internal targets.
The fiscal year 2017 fourth quarter results briefing for GREE highlights a strategic pivot toward sustainable earnings growth driven by high-quality native game development and global expansion. Management indicates that the company has successfully enhanced its development capabilities, allowing for a more robust pipeline and improved user retention. A central component of this strategy involves leveraging strong first-party and third-party intellectual property, such as the smartphone adaptation of the classic RPG Wild Arms, while ensuring compatibility between chosen IPs and internal game engines.
Financial performance and cost structures are increasingly influenced by the shift from web-based games to native applications. While native games based on popular IPs drive sales growth, they also carry higher commission fees and advertising costs. For the first quarter of fiscal year 2018, the company anticipates increased spending on outsourcing to bolster operating systems and quality assurance, alongside higher marketing expenses for successful new launches. These costs are partially offset by reduced labor expenses following the closure of certain development bases and the transfer of overseas operations.
The geographic scope of operations is expanding through a global strategy that emphasizes simultaneous development for Japanese and international markets. GREE is currently implementing operating systems designed to support localized versions of its native titles to capitalize on global demand. Furthermore, the company reports positive momentum from recent releases like Library Cross Infinite and AKB48 Stage Fighter 2 Battle Festival, noting that pre-registration volumes exceeded internal targets. This performance, combined with more effective television advertising and content updates for existing titles, supports the company’s outlook for long-term fan engagement and stabilized revenue streams.
