Mobile
Report
Financial Results for the Fourth Quarter of FY2011
GREE, Inc. reported a robust fourth‑quarter performance for the fiscal year ending June 30 2011, driven by rapid user growth and expanding monetization across its global platform. Net sales rose 29 % to ¥21,093 million, while operating profit increased 19 % to ¥9,789 million; both figures represent the largest quarterly gains of FY2011. The company’s consolidated user base reached 123.6 million worldwide, with 26.4 million in Japan and a growing presence in the United States, Europe, China, and other Asian markets. The acquisition of OpenFeint added 50 million users and broadened GREE’s reach in emerging mobile markets. Revenue diversification is evident: paid‑service sales grew to ¥18,387 million, and advertising revenue climbed to ¥3,000 million. The company launched “GREE Market,” a pre‑installed app store on KDDI’s Android platform, and expanded its in‑app billing to web, Android, and iOS. Operating expenses rose 37 % YoY, largely due to increased advertising spend (27 %) and rental fees for data‑center decentralization. Strategic initiatives include standardizing smartphone platform specifications with mig33, partnering with Tencent and SK Telecom, and establishing a Beijing office to support development in China. Forecasts for FY2012 target net sales of ¥90–100 billion, operating profit of ¥40–50 billion, and net income of ¥22–28 billion, reflecting continued emphasis on user acquisition, platform expansion, and diversified revenue streams.
GREE
Report
GREE’s Global Strategy and OpenFeint Acquisition
GREE’s strategy centers on expanding a global social‑gaming network and monetizing through mobile games developed in Japan and internationally, targeting the rapidly growing smartphone market. The company plans to leverage its existing platform business while acquiring and partnering with key global players, notably OpenFeint, to accelerate market penetration. Data from the document show smartphone shipments worldwide rising from 180 million in 2005 to over 700 million by 2013, with smartphone penetration reaching 82 % of total shipments in 2010, underscoring the strategic timing for mobile expansion. OpenFeint, with 75 million users and 5,000 games as of April 2011, offers a robust developer ecosystem and monetization tools such as micro‑transactions and performance‑based advertising. Partnerships with Verizon Wireless, AT&T, and T‑Mobile provide access to 30–32 % of the U.S. carrier market, amplifying user acquisition potential. GREE intends to share platform specifications and co‑develop social features with OpenFeint, aiming to reduce porting costs and boost user engagement across both networks. The acquisition is structured as a triangular merger, with GREE International creating a subsidiary to acquire OpenFeint for approximately $104 million in cash. Financial and legal advisors, including Mitsubishi UFJ Morgan Stanley Securities and Morrison & Foerster LLP, guided valuation and transaction structure. Post‑merger, OpenFeint becomes a wholly owned subsidiary of GREE International, positioning the combined entity to compete for the top spot in global social gaming.
GREE
