Summary of Main Supplementary Explanations: FY2021 Fourth Quarter Results Briefing

GREE’s strategic focus for the 2022 fiscal year centers on the aggressive expansion of the Metaverse through its REALITY platform and the stabilization of its investment and incubation business. The Metaverse is defined as a next-generation internet space where avatars facilitate social interaction, work, and play, bridging the gap between physical and virtual realities. This sector has seen accelerated growth due to technological shifts and increased demand for digital communication during the COVID-19 pandemic. To capitalize on this momentum, the company plans to invest approximately ¥10 billion over the next two to three years, specifically targeting advertising, labor, and outsourcing to scale the platform globally.

The REALITY platform has already established a presence in 63 countries and territories, showing significant traction in North America, Southeast Asia, Central and South America, and Russia. Management attributes this success to a lack of direct global competitors offering similar avatar-based livestreaming services. Future growth strategies involve leveraging existing expertise in communication and gaming while implementing localized events and expanded language support. Despite this long-term optimism, the heavy upfront investment in the Metaverse and development costs for new mobile titles are expected to result in an operating loss of several hundred million yen for the first quarter of fiscal year 2022.

Beyond the Metaverse, the investment and incubation segment is positioned as a consistent contributor to medium-to-long-term income. While short-term returns may fluctuate due to the nature of venture capital, the company targets a consistent return of over 10%. This dual approach seeks to balance the high-growth potential of emerging virtual spaces with the steady financial contributions of a diversified investment portfolio, ensuring the company remains competitive as digital social interactions continue to evolve.