FinancialGREE
Summary of Main Supplementary Explanations Questions and Answers at the FY2023 Fourth Quarter GREE Results Briefing
3 Aug 20232 pages~3 min full read
GREE projects consolidated operating income for fiscal year 2024 to be between 4.0 and 5.0 billion yen, reflecting a conservative outlook due to a lack of major new title releases.
The company aims to shift its income structure by fiscal year 2026, targeting 50% of non-investment operating income to originate from segments outside of the Game and Anime Business.
The Metaverse Business is a core growth pillar, with the Platform and B2B divisions already profitable and a goal for all four sub-sectors to reach profitability by fiscal year 2026.
GREE is diversifying its game development strategy into four categories—in-house, regional expansion, joint development, and licensing—to counter low-margin pressures in the smartphone market.
The Investment Business maintains a medium-term target of achieving consistent 10% returns to support overall group earnings stability.
Earnings from profitable metaverse divisions are currently being reinvested to scale the company's VTuber and Web3 business segments.
GREE’s strategic outlook following the fourth quarter of fiscal year 2023 emphasizes a transition toward a more diversified business portfolio to mitigate the challenges of an increasingly low-margin smartphone game market. The company is shifting its development pipeline into four distinct categories: in-house development, regional expansion, joint development, and licensing. This approach leverages successful intellectual properties like Heaven Burns Red to secure collaboration opportunities with global IP holders. While specific release dates for the 2024 fiscal year remain undisclosed, the focus is on maintaining high quality despite rising development scales that have pressured industry-wide profitability.
The Metaverse Business segment represents a critical growth pillar, with the Platform and B2B Metaverse divisions already achieving profitability. Earnings from these areas are being reinvested into the VTuber and Web3 businesses. The long-term objective is for all four metaverse sub-sectors to be profitable by fiscal year 2026, contributing significantly to group earnings. Current synergies are primarily indirect, such as the high international profile of the REALITY platform driving interest in English-speaking VTuber auditions, though more direct promotional integrations are planned as these businesses mature.
Financial projections indicate a conservative near-term outlook, with consolidated operating income for fiscal year 2024 estimated between 4.0 and 5.0 billion yen. This forecast accounts for a lack of major new title contributions and a reactive decline following previous investment gains. By fiscal year 2026, the company aims for a more balanced income structure where approximately half of non-investment operating income is generated by segments outside of the Game and Anime Business. This medium-term strategy focuses on stabilizing earnings through business portfolio adjustments while targeting consistent 10% returns from the Investment Business.
