Market Analysis
Report
HY 1 2021/22 Consolidated Results: Impacted by an Unfavourable Basis Comparison
Nacon released audited consolidated results for the first half of fiscal year 2021/22, reporting sales of €73.0 million, a 15.7 % decline from the comparable period in 2020/21. Gross margin fell to €38.0 million (52.1 % of sales) and EBITDA dropped 29.7 % to €21.4 million (29.3 % of sales). Current operating income fell 46.3 % to €8.4 million, representing 11.6 % of sales, while net profit contracted 60.4 % to €3.8 million (5.2 % of sales). The decline is attributed mainly to a weaker editorial portfolio—video‑game sales fell 16.9 % to €27.3 million—and a high comparison basis for accessory sales, which decreased 15.1 % to €43.7 million. The balance sheet remained solid, with shareholders’ equity at €219.0 million and cash reserves of €62.6 million, reflecting recent studio acquisitions and catalogue development. Working‑capital requirements increased by €2.5 million due to inventory build‑up, while operating cash flow reached €17.7 million and investment outflows rose to €45.6 million. In response, Nacon revised its 2021/22 targets downward (sales €150–180 million; current operating income near €20 million) and lifted 2022/23 expectations (sales €250–300 million; operating‑income rate >20 %). The company postponed several high‑profile releases to 2022/23, citing a need for additional development time to enhance quality. The acquisition of Ishtar Games was completed on 25 November 2021, expanding Nacon’s studio portfolio. The outlook highlights a strong editorial pipeline for 2022/23, with over fifteen new titles and continued growth of the back‑catalogue.
Nacon
Report
Summary of main supplementary explanations questions and answers at the FY2022 First Quarter GREE results briefing held on November 5, 2021 PDF
The briefing clarified GREE’s strategic priorities for FY2022, focusing on the Reality metaverse platform and its associated investment plans. GREE intends to sustain its advertising spend at the level of Q1, while allocating additional capital toward app development, specifically labor and outsourcing costs to enhance functionality. The company positions Reality as a distinct metaverse by leveraging Japanese anime aesthetics, citing growing global interest in anime‑styled content and the platform’s dual social networking and gaming capabilities as key differentiators. In terms of financial outlook, GREE acknowledges volatility in its Investment and Incubation Business due to the unpredictable nature of venture‑capital returns, which are largely driven by dividend distributions. Despite this uncertainty, the company expects a measurable income contribution from these investments. For the Internet and Entertainment Business in Q2 FY2022, GREE projects operating income in the several‑hundred‑million‑yen range. This forecast is supported by anticipated revenue from new game applications, increased development expenditures—including outsourcing—and heightened advertising investment aimed at accelerating Reality’s growth. The briefing covers the Japanese market with a global reach for anime‑centric audiences, spans the first quarter of FY2022 through Q2 projections, and addresses both platform development and financial performance. Methodological details are limited to internal budgeting assumptions rather than external data sources, reflecting an internally driven strategic assessment.
GREE
