Report
Summary of Main Supplementary Explanations Questions and Answers: FY2023 First Quarter GREE Results Briefing
The briefing outlines GREE’s strategic outlook and performance expectations for FY2023, focusing on its core gaming, metaverse, and investment activities. The company reports a stable user base for the flagship title “Heaven Burns Red,” anticipating steady earnings while continuing to develop new content. Other major titles are expected to experience a typical first‑quarter slowdown after a fourth‑quarter peak, with the company preparing anniversary events and content releases to sustain engagement through late 2022 and beyond. GREE plans to replicate the success of “Heaven Burns Red” by applying lessons learned in development and operations to future titles, emphasizing expressive design and multifaceted marketing know‑how. In the metaverse segment, profitability has reached breakeven; the firm is expanding its user base for REALITY and reinvesting profits into promotional activities to support further growth. The investment and incubation arm faces a cautious outlook for FY2023, with potential quarterly losses if exit distributions remain low despite some expected payouts. For the Internet and Entertainment Business, operating income for Q2 FY2023 is projected between ¥1.0 billion and ¥1.5 billion, reflecting moderate growth expectations amid market uncertainties. Overall, GREE’s strategy centers on leveraging proven game development expertise, expanding metaverse user engagement, and managing investment risks while targeting modest income growth in its entertainment portfolio.
GREE
Report
FY2023 First Quarter Financial Results
The FY2023 first‑quarter results show a net sales volume of ¥16.6 billion, operating income of ¥1.6 billion and EBITDA of ¥1.7 billion, reflecting a decline from the previous year’s strong performance driven by hit titles such as *Heaven Burns Red*. Net sales fell 4.3 % QoQ and operating income dropped 2.3 % QoQ, largely due to reduced sales in the Internet and Entertainment Business after FY22’s peak. Operating income margin contracted from 23 % in Q4 FY22 to 9.5 % in Q1 FY23, with variable costs rising by ¥2.0 billion to ¥15.0 billion. Cost structure analysis indicates advertising and commission fees were the largest expense categories, with commission fees decreasing by ¥1.27 billion QoQ due to lower sales. Labor and rental costs remained relatively stable, while other operating expenses fell slightly. Total cost reductions of ¥2.0 billion QoQ helped offset revenue declines. Strategic initiatives highlighted include aggressive investment in the Metaverse Business, where global downloads of *REALITY* surpassed 10 million across 63 countries, and expansion of content communication features. The Entertainment segment continued to leverage *Heaven Burns Red* through storyline extensions, anniversary campaigns, and merchandise collaborations, maintaining high App Store rankings. The Investment and Incubation arm reported a total AUM of ¥78.9 billion, up ¥7.3 billion QoQ, driven by gains in venture fund valuations and new investments in Japanese and U.S. startups. Overall, the quarter demonstrates a shift from FY22’s high‑growth momentum to a more stable income outlook, with continued focus on IP development, Metaverse expansion, and venture investment to sustain long‑term earnings.
GREE
