FinancialGREE
Summary of Main Supplementary Explanations: FY2021 Fourth Quarter Results Briefing
5 Aug 20212 pages~2 min full read
GREE is committing approximately ¥10 billion over the next two to three years to scale its REALITY Metaverse platform globally through increased spending on advertising, labor, and outsourcing.
The REALITY platform currently operates in 63 countries and territories, with significant traction in North America, Southeast Asia, Central and South America, and Russia.
Heavy upfront investment in the Metaverse and new mobile game development is projected to cause an operating loss of several hundred million yen in the first quarter of fiscal year 2022.
The company’s investment and incubation segment is managed to provide a consistent medium-to-long-term return of over 10%.
GREE’s core strategy for fiscal year 2022 balances the high-growth potential of the Metaverse with the steady financial contributions of its diversified investment portfolio.
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.
