ReportGREE
Summary of Main Supplementary Explanations Questions and Answers: FY2023 Second Quarter
2 pages~4 min full read
GREE projects Q3 FY2023 operating income for its Internet and Entertainment Business to range between ¥1.0 billion and ¥1.5 billion, heavily dependent on the performance of new Korean and traditional Chinese releases of 'Heaven Burns Red'.
See it on page 2The 'REALITY' metaverse platform has achieved profitability, with significant overseas growth led by North America, followed by Indonesia and Thailand.
See it on page 1GREE is scaling marketing spend in Q3 to support the one-year anniversary of 'Heaven Burns Red' and the international expansion of the 'REALITY' platform.
See it on page 2The 'REALITY' user base is primarily composed of Gen Z females who prioritize private communication features, driving consistent monetization through gifting, avatar sales, and in-game purchases.
See it on page 2The Anime Business is shifting toward an in-house model to develop game-to-anime adaptations, aiming to diversify intellectual property and increase long-term user engagement.
See it on page 1The Investment and Incubation Business is expected to face short-term losses due to current market conditions, though the company maintains a strategy of diversified investment timing to stabilize long-term contributions.
See it on page 2The briefing outlines GREE’s performance and strategic outlook for the second quarter of FY2023, focusing on its Internet and Entertainment Business. Sales in the Game and Anime segment remained steady for “Heaven Burns Red,” though revenue tapered after the half‑year anniversary promotion; growth continued in Metaverse and Commerce & DX divisions. The company anticipates a one‑year anniversary event for the Japanese version of Heaven Burns Red and imminent releases in Korean and traditional Chinese, with pre‑registrations already generating significant buzz at local game shows. The Anime Business is positioned to secure and diversify intellectual property, enabling in‑house development of game‑to‑anime adaptations that can enhance user engagement and revenue.
Metaverse operations, branded as REALITY, have surpassed the break‑even point and achieved profitability. Over the past six months, overseas sales grew markedly, with North America leading after Japan, followed by Indonesia and Thailand. User demographics skew female and Generation Z, with a strong preference for private communication features. Monetization streams—live‑stream gifting, avatar sales, and in‑game purchases—are expanding consistently across regions.
Advertising spend is expected to rise in the third quarter, driven by anniversary events and new language releases for Heaven Burns Red, as well as intensified promotion of REALITY. Operating income projections for the Internet and Entertainment Business in Q3 FY2023 range from ¥1.0 billion to ¥1.5 billion, contingent on the performance of the Korean and Chinese versions.
The Investment and Incubation Business remains cautious, with potential short‑term losses anticipated due to market conditions. However, diversified investment timing and targets are projected to stabilize contributions over the medium‑to‑long term.
