Report

Summary of Main Supplementary Explanations Questions and Answers: FY2021 Third Quarter GREE Results Briefing

Published by GREE

Summary

The briefing outlines GREE’s strategic outlook for the remainder of FY2021 and beyond, focusing on its core Game business, profitability trajectory, investment income sustainability, and short‑term financial expectations. GREE anticipates a medium‑to‑long‑term sales uptrend driven by the release of new game titles in FY2022 and subsequent years, while simultaneously strengthening operational capabilities for existing titles. Profitability is expected to broaden through the creation of more profitable business structures and favorable contractual terms, aligned with a strategy centered on Game engine development, intellectual property acquisition, and global expansion. Investment income derives primarily from gains on venture‑capital partnerships in Japan and overseas, as well as the consolidation of previously unconsolidated subsidiary STRIVE Inc. The company notes that short‑term returns may fluctuate due to diversified investment portfolios, but medium‑to‑long‑term sustainability is projected. Planned allocation of these gains targets reinvestment in core businesses and shareholder returns. Financially, GREE projects operating income for the fourth quarter of FY2021 at approximately ¥1.0 billion, reflecting confidence in its current revenue streams and cost management. The briefing covers Japan’s domestic market with implications for global expansion, covering the period up to FY2021 and projecting into FY2022. Methodological details are limited, but the focus remains on strategic investment, operational efficiency, and incremental revenue growth.

From the report

■Summary of main supplementary explanations questions and answers at the FY2021 Third Quarter GREE results briefing held on May 10, 2021 【Q1】 What is the outlook for sales trends in the Game business? 【A1】 In addition to developing and releasing new game app titles, we are steadily strengthening our capabilities in terms of operating these titles. We feel that we can fuel a sales uptrend over the medium-to-long term by targeting sales upside from the release of new titles in FY2022 and beyond. 【Q2】 What is the outlook for profitability in the Game business? 【A2】 In the game business, we will focus on creating more profitable business structures and entering into business deals with favorable terms as we continue to follow our basic strategy of evolving in the areas of “Game engine, IP, and Global”. We believe this will allow us to continue to broaden our profitability. 【Q3】 What is the breakdown of investment income? And is it sustainable? 【A3】 Gain on investments in partnership was posted based on gains on investments made via venture capital firms in Japan and overseas and the consolidation of previously unconsolidated corporate venture capital subsidiary STRIVE Inc. We also posted gains on sales of investment securities resulting from sales of shares of unlisted companies. Gain on investments in partnership is achieved by making diversified investments via many venture capital firms over a long period of time. We therefore expect to see considerable variation in return when viewed over short periods of time, but we also expect to achieve sustainable medium-to-long-term returns.

estments in partnership is achieved by making diversified investments via many venture capital firms over a long period of time. We therefore expect to see considerable variation in return when viewed over short periods of time, but we also expect to achieve sustainable medium-to-long-term returns. We plan to allocate the income derived from these investments mainly to investment in our businesses, while also taking into consideration shareholder returns. 【Q4】 What is the income outlook for 4Q FY2021? 【A4】 We expect 4Q operating income of roughly ¥1.0 billion.

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