GREE

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FY 2013 Second Quarter Financial Results

The second quarter of fiscal year 2013 marks a period of strategic transition, characterized by a return to quarter-on-quarter revenue growth alongside a significant downward revision of full-year forecasts. Net sales reached 39,407 million yen, a 4% increase over the previous quarter, driven by the consolidation of Pokelabo, Inc. and a recovery in coin consumption within the Japanese market. However, year-on-year performance showed a decline, with net sales down 5% and operating profit falling 37% to 14,258 million yen. This contraction is attributed to the ongoing shift from feature phones to smartphones, which has led to declining legacy advertising revenue and increased costs associated with aggressive marketing and labor. The geographic scope of these results covers Japan and global markets, specifically North America, Europe, and South Korea. In Japan, coin consumption rose across both third-party and in-house titles, particularly within the growing native app segment. Internationally, monthly coin consumption began an upward trend in October 2012, supported by the success of titles like Modern War in the United States. Despite these gains, the full-year outlook was revised downward by approximately 17-18% for sales and 29-32% for profits due to the postponement of several major titles and lower-than-expected KPIs for overseas games. Future strategy focuses on accelerating the transition to a global social gaming leader by investing heavily in smartphone-native content and new genres beyond traditional card battle games. Management plans to utilize efficient marketing to balance lifetime value against installation costs while strengthening compliance and user safety through enhanced monitoring systems. These upfront investments in development and customer support are intended to drive a recovery in sales and profit growth beginning in fiscal year 2014.

market-forecast investment japan

GREEFeb 2013

Financial

FY2013 First Quarter Financial Results

GREE’s financial results for the first quarter of fiscal year 2013 reveal a period of strategic transition and global expansion. While net sales of 37.9 billion yen represented a 5% decline from the previous quarter, they marked a 25% increase year-over-year. Operating profit reached 15.7 billion yen, down 17% sequentially due to increased labor costs and upfront investments associated with international growth. Despite the quarterly dip, monthly sales hit a trough in July 2012 and entered a recovery trend by August, driven by a strengthening lineup of social games and improved operational capabilities. The strategic focus centers on shifting toward smartphone native applications and leveraging high-profile intellectual property (IP). Domestic growth is supported by partnerships with Yahoo! JAPAN and Pokelabo, while international efforts include the acquisition of Funzio and the establishment of a development studio in Vancouver. The portfolio is expanding through collaborations with major publishers like Konami, Square Enix, and NCSoft to launch titles based on franchises such as Metal Gear Solid and Final Fantasy. These initiatives aim to secure a dominant position in the global smartphone social game market. Beyond game development, the business structure is becoming more multilayered through new ventures in merchandising and mobile advertising partnerships, such as the agreement with MobPartner. The industry environment is also evolving with the establishment of the Japan Social Game Association (JASGA), which focuses on self-regulation, youth education, and improved customer support. To maintain platform safety, a 24-hour monitoring system and strict age verification protocols remain in place. These combined efforts in IP acquisition, global infrastructure, and platform safety are designed to accelerate growth heading into the holiday season and beyond.

market-analysis mergers-acquisitions investment+1

GREENov 2012

Financial

Financial Results for the Fourth Quarter of the Fiscal Year Ended June 30, 2012

GREE, Inc. achieved record-breaking financial performance for the fiscal year ended June 30, 2012, characterized by net sales of ¥158.2 billion and a net profit of ¥48 billion. While these figures represent triple-digit year-over-year growth, the fourth quarter experienced a sequential decline in revenue. This downturn resulted from a temporary shortage of major intellectual property releases and the proactive implementation of user protection measures, most notably the discontinuation of "comp-gacha" monetization mechanics to align with evolving industry standards. Despite these short-term headwinds, the company maintains an optimistic outlook for the 2013 fiscal year, forecasting net sales to reach as high as ¥205 billion. The strategic focus for the upcoming period centers on aggressive global expansion and the diversification of the smartphone gaming portfolio. By leveraging the acquisition of Funzio and launching a unified platform across 169 countries, the company aims to establish a dominant international presence. Product development is shifting toward high-profile collaborations with established franchises such as Naruto and Bleach, while simultaneously expanding into new genres beyond traditional card battle games. This growth is supported by a significant increase in human resources and a dual-revenue model encompassing both in-game purchases and advertising media. Operational integrity and corporate social responsibility remain central to the business model. A robust safety infrastructure, including a 24/7 monitoring system staffed by 450 personnel and a CEO-led security committee, ensures content moderation and age-based restrictions. These internal controls are complemented by external initiatives, such as mobile-carrier age verification and digital literacy programs. By balancing aggressive global scaling with rigorous user protection and compliance, the company seeks to stabilize its domestic market position while capturing new opportunities in the international mobile gaming landscape.

market-analysis investment global+1

GREEAug 2012

Financial

Financial Results for the Third Quarter of the Fiscal Year Ending June 30, 2012

GREE, Inc. achieved record-breaking financial performance during the third quarter of the fiscal year ending June 30, 2012, characterized by a 182% year-over-year increase in net sales to 46.2 billion yen and a 199% surge in operating profit to 24.5 billion yen. This growth was underpinned by a massive expansion of the global user base to 234 million members, facilitated by the acquisition of OpenFeint and the strong performance of high-ARPU demographics in the Japanese market. Total assets grew by 170% to 125.4 billion yen, reflecting a period of aggressive capital investment and market consolidation aimed at establishing a dominant position in the mobile social gaming sector. Strategic expansion into international markets, particularly the United States, served as a primary growth lever through the $210 million acquisition of Funzio and the successful launch of titles such as Zombie Jombie. To unify its disparate regional operations, the company prepared for the May 2012 launch of a global platform supported by high-profile intellectual property partnerships with developers like Ubisoft and Level-5. These alliances, combined with enduring domestic hits like Tanken Doliland, created a diversified revenue stream spanning social games, virtual avatars, and mobile advertising. Sustainability and corporate responsibility emerged as core operational priorities alongside financial growth. To mitigate risks associated with social gaming, rigorous safety initiatives were implemented, including a 24/7 monitoring system staffed by 450 personnel and strict monthly spending limits for minors. These measures successfully reduced unauthorized Real Money Trading activity by 50%. By balancing aggressive global acquisition strategies with enhanced user protection protocols, the company sought to stabilize its rapid scaling within the evolving mobile ecosystem.

market-analysis monetization investment+1

GREEMay 2012

Financial

Financial Results for the Second Quarter of the Fiscal Year Ending on June 30, 2012

This financial report details GREE, Inc.’s performance for the second quarter of the fiscal year ending June 30, 2012. The primary thesis centers on the company’s aggressive transition into a global mobile social gaming powerhouse, driven by the integration of the GREE and OpenFeint platforms. By December 2011, the group reached a global registered user base of 189.2 million, with international users significantly outnumbering the domestic Japanese audience, which accounted for 15.3% of the total. Financial results for the quarter show record-breaking growth. Net sales reached 41.5 billion yen, representing a 190% year-over-year increase, while operating profit rose 225% to 22.5 billion yen. This performance was fueled by the steady monetization of smartphone services and a robust portfolio of both in-house and partner games. Paid service sales remained the dominant revenue driver, growing 39.2% quarter-over-quarter. Consequently, the company upwardly revised its full-year 2012 forecasts, projecting net sales between 160 and 170 billion yen. The strategic focus remains on global infrastructure and smartphone expansion. GREE established nine global offices and formed capital alliances, such as with Mobicle in South Korea, to bolster development capabilities. The company is preparing to launch a unified global platform in the fourth quarter of 2012, supported by a diverse content lineup from major partners like Capcom, Konami, and Square Enix. Methodologically, the report utilizes consolidated financial data and internal user metrics to track growth across Japan, North America, Europe, and Asia, while emphasizing a commitment to platform safety through 24-hour monitoring and age-based restrictions.

monetization market-forecast global+2

GREEFeb 2012

Financial

Financial Results for the First Quarter of the Fiscal Year Ending on June 30, 2012

This financial report details GREE’s performance for the first quarter of the fiscal year ending June 30, 2012, covering the period from July to September 2011. The primary thesis highlights the company’s rapid transition into a global mobile social gaming platform, driven by the integration of OpenFeint and aggressive expansion into international markets. During this period, GREE reached a milestone of 155.4 million registered users worldwide, with international users accounting for over 82% of the total base. Financial results show significant growth, with net sales reaching 30.4 billion yen, a 145% increase year-over-year. Operating profit rose 168% to 16.6 billion yen, and net income grew 156% to 9.4 billion yen. This performance was fueled by a 49.5% quarterly increase in paid services sales, particularly from in-house social games and smartphone monetization. Consequently, the company raised its full-year net sales forecast by 40% to a range of 130–140 billion yen, citing faster-than-expected monetization of smartphone content in Japan. The strategic focus remains on establishing a unified global platform by the second half of the fiscal year. This involves integrating the OpenFeint developer network, establishing new subsidiaries in Europe, Asia, and South America, and launching a robust lineup of in-house titles like "Tanken Driland" and "Sengoku Kingdom." Additionally, the company is diversifying its business through the launch of GREE Ventures to invest in Southeast Asian startups and the acquisition of FEYNMAN Co., Ltd. to strengthen its smartphone application portfolio. The report also emphasizes ongoing commitments to user safety through 24-hour monitoring and age-based restrictions.

monetization market-analysis global+1

GREENov 2011

Financial

Financial Results for the Fourth Quarter of the Fiscal Year Ended on June 30, 2011

This financial report details the performance of GREE, Inc. for the fourth quarter and full fiscal year ending June 30, 2011. The primary thesis centers on the company’s rapid transition from a domestic Japanese social networking service to a global mobile gaming platform. A major milestone highlighted is the expansion of the global user base to 123.6 million following the acquisition of OpenFeint, significantly extending the company's reach beyond its 26.4 million users in Japan into North America, Europe, and China. Financial data indicates a period of record growth. Fourth-quarter net sales reached 21.1 billion yen, representing a 93% year-over-year increase, while operating profit rose 85% to 9.8 billion yen. For the full fiscal year 2011, net sales totaled 64.2 billion yen. Revenue is primarily driven by paid services, which contributed 18.4 billion yen in the final quarter, supplemented by a steady advertising business. The company’s demographic data shows a balanced gender split and a high concentration of users in their 20s and 30s, which supports high average monthly usage per capita. The strategic scope of the report emphasizes smartphone globalization and ecosystem expansion. Key initiatives include standardizing platform specifications with international partners like Tencent and mig33, as well as establishing a physical presence in Beijing, Singapore, and London. Methodologically, the report utilizes consolidated financial statements and internal user tracking data to project a fiscal year 2012 forecast of 90 to 100 billion yen in net sales. Conclusions point toward a long-term goal of 300 million global users, supported by an aggressive shift toward in-house smartphone game development and strategic alliances with major carriers such as KDDI and SK Telecom.

investment market-analysis japan+1

GREEAug 2011

Financial

Financial Results for the Third Quarter of the Fiscal Year Ending on June 30, 2011

This financial report details the performance of GREE, Inc. for the third quarter of the fiscal year ending June 30, 2011. The primary thesis centers on the company’s successful transition into the smartphone market and its aggressive international expansion strategy. During this period, the company solidified its position as Japan’s leading social networking service (SNS), surpassing 25 million members. Financial results show significant growth, with net sales reaching 16,372 million yen, a 77% increase year-over-year, and operating profit rising 56% to 8,199 million yen. The company maintained a high operating profit margin of 50%, driven by the monetization of original games and the expansion of the GREE Platform. The scope of the report covers domestic operations in Japan and initial global forays during the January to March 2011 period. Data indicates that while the Tohoku Region Pacific Coast Earthquake caused a momentary dip in user activity, the overall impact on performance was minimal. Demographic data reveals a balanced user base, with 48% of members aged 30 and above, a segment noted for higher average monthly payments. The methodology for these findings relies on consolidated financial statements, which were introduced for the first time this quarter, alongside internal user registration and engagement metrics. Strategic conclusions emphasize a shift toward a global "ecosystem" reaching over 800 million users through alliances and acquisitions. Key developments include the acquisition of OpenFeint, which provides a 75 million user base primarily in North America, and a strategic alliance with Tencent in China. To support this growth, GREE established subsidiaries in North America and opened offices in Beijing, Singapore, and London. Future strategies focus on multi-OS compatibility for smartphones, diversifying payment methods, and enhancing the GREE Ad Program to support partner monetization. The report also highlights ongoing commitments to platform safety through 24-hour monitoring and age-restricted functionality.

market-analysis monetization user-acquisition+2

GREEMay 2011

Financial

GREE’s Global Strategy and OpenFeint Acquisition

GREE’s acquisition of OpenFeint represents a strategic move to establish a dominant global social gaming network by integrating Japanese social networking expertise with a massive international user base. The primary thesis centers on the rapid growth of the global smartphone market, which is projected to outpace PC shipments and reach nearly 100% penetration in North America by 2014. By acquiring OpenFeint, GREE aims to transition from a Japan-centric platform to a global leader, leveraging a combined ecosystem that targets over 100 million users and eventually seeks to reach 800 million through further alliances with partners like Tencent and mig33. The acquisition, valued at approximately $104 million USD, was executed through a statutory reverse triangular merger involving GREE’s U.S. subsidiary. OpenFeint brings a robust infrastructure to the deal, including 75 million users, 5,000 games, and a network of 19,000 developers as of April 2011. The platform provides comprehensive solutions for marketing, user activation through social features like leaderboards and achievements, and monetization via microtransactions and performance-based advertising. OpenFeint’s market position is further strengthened by strategic partnerships with major U.S. carriers, including AT&T and Verizon Wireless. The strategic synergy between the two entities focuses on platform alliance and knowledge sharing. By aligning platform specifications, GREE intends to reduce porting costs for developers while enhancing OpenFeint’s social features using GREE’s established expertise in engagement and monetization. This dual-track strategy involves expanding the platform business through mergers and alliances while simultaneously developing social games through both Japanese and international studios to maximize average revenue per user across a unified global network.

mergers-acquisitions market-analysis global+1

GREEApr 2011

Financial

Financial Results for the Second Quarter of the Fiscal Year Ending on June 30, 2011

This financial report details the performance of GREE, Inc. for the second quarter of the fiscal year ending June 30, 2011. Covering the three-month period from October to December 2010, the data reflects a period of significant growth for Japan’s largest social networking service. The company reported record net sales of 14.3 billion yen, representing a 15% increase quarter-over-quarter and a 75% increase year-over-year. Operating profit reached 6.9 billion yen, up 36% from the previous year, despite increased investments in data center infrastructure and personnel to support a growing user base of 23.83 million subscribers. The primary drivers of this financial success were paid services and the expansion of the GREE Platform. Paid service sales rose 18% quarter-over-quarter, fueled by the monetization of original titles such as Pirate Kingdom Columbus and Monster Planet. The platform ecosystem also matured, doubling its title count to 560 within three months and introducing monthly fee plans for partner applications. While feature phones remained a core segment, the company aggressively pivoted toward smartphones, launching beta versions for Android and free casual games for iOS. Strategic expansion and safety initiatives define the forward-looking outlook. GREE established a U.S. subsidiary and formed a major partnership with Tencent to enter the Chinese market, aiming to share APIs and cross-promote social games internationally. Simultaneously, the company implemented rigorous safety measures to protect younger users, including 24-hour monitoring, age verification through carrier data, and functional restrictions on interactions between minors and adults. These efforts aim to maintain a secure environment as the company transitions its social graph-based advertising and gaming services to a global, smartphone-centric market.

market-analysis monetization japan+1

GREEFeb 2011

Financial

Financial Results for the First Quarter of the Fiscal Year Ended on June 30, 2011

This financial report details the performance of GREE, Inc. for the first quarter of the fiscal year ending June 30, 2011, covering the period from July to September 2010. The primary thesis highlights GREE’s emergence as Japan’s leading social networking service (SNS) and its successful transition into a robust social gaming platform. By September 2010, the service reached 22.46 million members, demonstrating a broad demographic appeal with 46% of users aged 30 or older. Financial data indicates significant growth, with net sales reaching 12,410 million JPY, an 82% increase year-over-year. Operating profit rose 58% to 6,221 million JPY, while net income grew 74% to 3,695 million JPY. This growth was primarily driven by paid services, particularly first-party social games like Pirate Kingdom Columbus and Mon-Pla, as well as the expansion of the GREE Platform to third-party developers. By October 2010, the platform hosted approximately 200 third-party titles, contributing to a steady increase in average revenue per user (ARPU) and advertisement sales. The strategic focus during this period involved diversifying content and expanding the ecosystem through partnerships with hosting and customer support providers. Looking forward, the strategy emphasizes multi-device compatibility, specifically developing content for smartphones, and international expansion through a capital partnership with Project Goth, Inc. (mig33). Additionally, the report underscores a commitment to platform safety, detailing a 24-hour patrol system and age-based usage restrictions to protect minor users, which earned the company certification as a safe content site.

investment market-analysis japan

GREENov 2010

Report

Summary of Main Supplementary Explanations Questions and Answers: FY2024 First Quarter GREE Results Briefing

The briefing clarified GREE’s strategic focus and financial outlook for FY2024. Development activities remain fluid, with no concrete release schedule disclosed due to external IP dependencies and shifting priorities. In the Metaverse platform segment, the REALITY service showed robust growth in the first quarter, driven by Japan and North America. Monetization diversified across avatars and gifting, contributing to earnings from the platform business. The DX Business continues to expand its client base, split between game and entertainment firms—leveraging GREE’s expertise in advertising, customer service, and quality assurance—and national‑scale food and beauty companies that benefit from digital marketing support. Growth in the latter segment is noted to outpace industry averages. Financial projections for the second quarter exclude investment activities, estimating consolidated operating income around ¥0.5 billion. Year‑end guidance remains unchanged from the August 3, 2023 announcement, targeting consolidated operating income between ¥4.0 and ¥5.0 billion for FY2024, with no significant impact expected from new game or anime titles or the investment arm. The company’s emphasis on platform monetization and diversified DX services underpins its confidence in maintaining steady earnings growth amid a competitive digital landscape.

market-analysis game-development metaverse+2

GREE