GREE

Organization

256 documents

Documents

FY2016 Second Quarter Financial Results

GREE’s financial results for the second quarter of fiscal year 2016 reflect a strategic transition toward native game development and diversified service platforms. The company reported net sales of ¥18.1 billion and an operating income of ¥4.0 billion, surpassing internal targets despite a year-over-year decline in revenue. This performance was driven by successful cost-control measures, including a ¥3.2 billion reduction in fixed costs compared to the previous year, and the stabilization of coin consumption in overseas markets. The geographic scope focuses primarily on Japan, with significant operational updates regarding North American and European markets. In the native game segment, the company highlighted the success of domestic titles like Shometsu Toshi, which achieved record monthly sales following a targeted television advertising campaign. The development pipeline remains robust with 11 titles in progress, including high-profile collaborations and first-party projects scheduled for release in the second half of the fiscal year. Conversely, the legacy web game business is being managed for steady profitability through the establishment of Funplex, a specialized game operations subsidiary. Beyond gaming, there is a clear expansion into home-related services and health and fitness platforms. The Renoco online renovation service and the Lespas fitness affiliate network both reported steady growth, with the company targeting multi-billion yen sales for these segments by fiscal year 2018. Additionally, the company is investing in emerging technologies, specifically through the GREE VR Studio, to secure early market positioning. The financial outlook for the full fiscal year remains conservative, forecasting net sales of ¥72.0 billion and operating income of ¥14.0 billion. This guidance accounts for the natural decline of older web games while anticipating the gradual earnings contribution from new native titles and the continued scaling of non-gaming business lines. Management intends to maintain strict control over server and outsourcing costs while selectively investing in high-potential marketing opportunities.

market-analysis investment japan

GREE Inc.Feb 2016

Financial

FY2016 First Quarter Financial Results

GREE’s financial results for the first quarter of fiscal year 2016 reflect a strategic shift toward profitability through rigorous cost management and the stabilization of its native game portfolio. The company achieved an operating income of ¥4.4 billion, representing quarter-on-quarter growth despite a slight decline in net sales to ¥19.3 billion. This performance was driven by a ¥1.8 billion reduction in total costs, achieved through lower advertising spend, reduced server leasing fees, and a streamlined consolidated headcount, which fell from 1,634 to 1,475 employees. The domestic native game segment showed resilience, with coin consumption reaching its highest level in a year. Growth was primarily fueled by titles such as Naruto: Shinobi Collection Shippu Ranbu and Shometsu Toshi. While the web game business continues to face a downward trend in coin consumption, the company maintained profitability in this segment by shifting operations offshore to Vietnam and improving management efficiency. Overseas operations also stabilized, halting the decline in monthly coin consumption through firmer trends in the July-September period. Looking ahead, the first-half earnings forecast has been revised upward to ¥37.0 billion in net sales and ¥7.0 billion in operating income. The pipeline remains robust with 14 titles in development, including high-profile projects like memories of the Blue and various IP-based titles scheduled for winter 2015. Additionally, new business ventures in home-related services and health and fitness platforms, such as Renoco and Lespas, demonstrated steady expansion. These results cover GREE’s global operations across Japan, North America, and South Korea for the three-month period ending September 30, 2015.

market-analysis investment japan

GREEOct 2015

Financial

FY2015 Fourth Quarter Financial Results

GREE concluded fiscal year 2015 with net sales of ¥92.5 billion and an operating income of ¥20.2 billion, though the bottom line was impacted by a net loss of ¥10.3 billion. This deficit primarily resulted from a ¥14.2 billion goodwill impairment charge related to the North American subsidiary, Funzio. While domestic native games such as Shometsu Toshi demonstrated growth, overall coin consumption fell 11% quarter-over-quarter to 27.9 billion, driven by weakening performance in overseas markets and the legacy web game segment. Despite these challenges, the company fortified its liquidity, ending the period with ¥76.4 billion in net cash and issuing a memorial dividend to mark its tenth anniversary. The strategic transition from web-based games to native mobile applications reached completion during this period, yielding a 30% improvement in retention for core titles. To address underperformance in international markets, the company acquired the developer Twiitch to enhance mid-core capabilities in North America. Operational efficiency remained a priority, as evidenced by a 16% reduction in fixed costs and the maintenance of profitability across both web games and emerging business ventures like Renoco and Lespas. Total assets and net assets saw a year-over-year decrease, yet the financial foundation remained stable through a significant reduction in interest-bearing debt. Looking toward fiscal year 2016, the objective is to achieve sustainable growth by launching 15 new native titles and rebuilding North American operations. Management aims to further reduce fixed costs by 10% through streamlined operations and lower selling, general, and administrative expenses. Beyond gaming, the strategy involves diversifying into home services and health platforms to stabilize revenue streams. By balancing aggressive native game development with rigorous cost management and expansion into new business sectors, the company intends to pivot back toward long-term profitability and market relevance.

market-analysis investment japan

GREEAug 2015

Financial

FY 2015 Third Quarter Financial Results

GREE’s financial results for the third quarter of fiscal year 2015 reflect a strategic pivot toward native mobile games amid a softening web-based game market. The company reported net sales of ¥22.0 billion and an operating income of ¥4.9 billion. While net sales declined quarter-over-quarter, operating income saw a slight increase due to aggressive cost-cutting measures, including a 12% reduction in total costs and a substantial decrease in mass-media advertising expenditures. The data indicates a clear transition in user behavior and business focus. Overall coin consumption fell 10% to 31.3 billion coins, with web games experiencing an 11% decline. However, smartphone consumption now accounts for 77% of the total. To address these shifts, the company expanded its native game development operations in Japan to 20 pipelines and 600 personnel. Key performance drivers included the continued growth of Shometsu Toshi and the steady performance of titles like The SAMURAI Kingdom. The company is also preparing for global expansion by localizing U.S. titles for European markets and launching cross-border titles in China and South Korea. Beyond gaming, the scope of operations includes emerging platform businesses in home-related services and health and fitness. The home renovation platform reached ¥100 million in monthly orders, while the Lespas fitness subscription service launched in April 2015 to tap into the broader wellness market. For the full fiscal year, the company revised its net sales forecast to ¥93.5 billion while maintaining an operating income target of ¥20.0 billion, signaling a continued reliance on strict cost controls and the anticipated contribution of new native game releases in the fourth quarter.

market-analysis investment japan+1

GREEApr 2015

Financial

FY2015 Second Quarter Financial Results

GREE’s financial performance for the second quarter of fiscal year 2015 reflects a company in the midst of a significant structural transition, characterized by a pivot toward native mobile applications and a diversification of its business portfolio. While net sales reached ¥24.1 billion and operating income of ¥4.7 billion exceeded initial forecasts, the period was marked by a substantial net loss of ¥7.7 billion. This deficit was driven primarily by an ¥18.4 billion extraordinary loss resulting from goodwill impairment charges related to the acquisitions of OpenFeint and Pokelabo. Despite these write-downs, the organization maintains a stable full-year operating income forecast of ¥20.0 billion, supported by a robust net cash position of ¥67.60 billion and a reduction in interest-bearing debt. The strategic focus has shifted decisively toward native smartphone games to offset the gradual decline of legacy web-based titles. This transition is evidenced by a development pipeline of 17 new titles and a dedicated headcount of 550 developers. Successes such as Shometsu Toshi, which reached the Top 30 grossing charts, and revenue growth in the United States market demonstrate the viability of this native-first approach. Furthermore, the company is actively diversifying into non-gaming sectors to secure long-term growth, notably through the launch of the AdColony video advertising platform and the acquisition of the home renovation service Renoco. Operational data indicates that while total coin consumption is trending downward globally, the revenue mix is increasingly reliant on third-party titles, which now account for 38% of the ecosystem. To sustain this evolution, the company is investing in human capital through partnerships like MakeSchool to bolster its mobile app development expertise. By stabilizing its web game base and aggressively expanding its native game and advertising footprints, the organization aims to navigate the shifting mobile landscape while returning value to shareholders through a commemorative 10th-anniversary dividend.

market-analysis investment japan

GREEFeb 2015

Financial

FY 2015 First Quarter Financial Results

GREE’s financial results for the first quarter of fiscal year 2015 reveal a strategic pivot toward native mobile applications amid declining revenues from its legacy web game business. Net sales reached ¥25.4 billion, a decrease from the previous quarter driven by softening sales of existing titles in both Japan and overseas. Despite this top-line pressure, operating income remained stable at ¥6.4 billion due to a significant 7% reduction in total costs, primarily achieved by curbing mass-media advertising and optimizing labor and server expenses. The company is aggressively shifting resources from web games to native game development, increasing its production lines to 12 and expanding its native development headcount to approximately 500. While native game coin consumption fell 10% to 10.2 billion coins, the company reported strong early performance from new titles like Shometsu Toshi and Cross Summoner. To mitigate risks, the firm recorded a ¥2.0 billion extraordinary loss following a portfolio review that led to the termination of underperforming titles, including the overseas project City of Rivals. Geographically, the report covers GREE’s consolidated global operations, with specific focus on the Japanese and U.S. markets. Looking ahead to the second quarter, the company issued a conservative forecast of ¥23.6 billion in net sales and ¥4.1 billion in operating income. This outlook assumes minimal seasonal growth and prioritizes strict cost control. Strategic initiatives for the remainder of the half-year include expanding into the mobile video ad market through a partnership with AdColony and pursuing cross-platform growth via joint ventures with LINE and KDDI.

market-analysis monetization global+1

GREENov 2014

Financial

FY2014 Fourth Quarter Financial Results

Fiscal year 2014 marked a period of structural transition for GREE, characterized by a decline in net sales to ¥125.6 billion and operating income to ¥35.0 billion. These financial contractions were primarily driven by the rapid obsolescence of the feature phone market and a temporary shortage of breakout smartphone hits. In response, the organization aggressively streamlined its operations, reducing fixed costs by 31% and ending the year with a strengthened cash position of ¥65.5 billion. This fiscal discipline provided the necessary liquidity to fund a comprehensive strategic shift toward native mobile application development. The core of this transformation involves a decisive pivot to native games for fiscal year 2015, with plans to triple native game operations and expand the Japanese studio headcount to 1,000 employees. While the legacy web game business is being optimized for stable cash flow, the primary growth engine is now centered on high-performance titles like Shometsu Toshi and the Wright Flyer Studios label. This internal restructuring is complemented by an international strategy that achieved quarterly profitability in 2014 through success in the hardcore and mid-core genres. Key drivers included the expansion of titles like Knights & Dragons and strategic cross-border collaborations, such as developing a Naruto mobile title for the Chinese market. Looking forward, the strategy prioritizes high-ARPU titles and global publishing efficiency. By doubling production lines and appointing new leadership to oversee international operations, the focus has shifted toward scaling native hits across both iOS and Android platforms. With a global workforce of nearly 1,900 employees and a user base of 53.7 million in Japan, the objective for the coming year is to leverage localized overseas releases and third-party IP to reverse the recent sales decline and establish a sustainable lead in the competitive smartphone gaming landscape.

investment market-analysis japan+1

GREEAug 2014

Financial

FY 2014 Third Quarter Financial Results

The third quarter of fiscal year 2014 reflects a period of strategic transition characterized by rigorous cost management and a shift in product focus. Net sales reached ¥31.07 billion with an operating income of ¥9.95 billion, maintaining a robust 32% operating margin despite a general decline in revenue. This profitability was largely driven by a 12.6% reduction in fixed costs and the achievement of quarterly profitability within overseas operations across the United States, Canada, and South Korea. While a business turnaround was initially anticipated sooner, revised release schedules for new titles have pushed the projected recovery target into fiscal year 2015. The operational landscape shows a divergence between legacy web games and emerging native applications. Smartphone coin consumption for web games declined by 3% during the quarter, prompting a consolidation of existing titles and an accelerated push for new first-party and partner releases. Although Japanese-developed titles faced challenges in international markets, the broader native game segment reached a profitable milestone globally. To diversify revenue streams beyond traditional gaming, expansion is underway into commerce, advertising, and venture capital, supported by new development labels such as Wright Flyer Studios. Financial stability remains a core strength, with net cash increasing significantly to ¥44.78 billion and total liabilities decreasing by over ¥17 billion year-over-year. Despite a downward trend in Japanese market coin consumption compared to the previous fiscal year, the domestic user base remains substantial at 53.7 million, skewed toward a mature demographic aged 30 and above. As of March 31, 2014, the workforce of 1,894 employees is primarily concentrated in headquarters operations and native game development, signaling a long-term commitment to evolving the product pipeline toward modern mobile platforms.

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GREEMay 2014

Financial

FY2014 Second Quarter Financial Results

GREE reported second-quarter net sales of ¥32.6 billion and operating income of ¥9.2 billion for the 2014 fiscal year, reflecting a strategic focus on stabilizing profitability amidst a shifting mobile landscape. By implementing a 15% reduction in fixed costs and achieving ¥2.1 billion in total cost savings, the company successfully mitigated profit declines. A significant transition in consumer behavior is evident as smartphone coin consumption rose to 68% of the total mix, signaling a decisive move away from legacy feature phone platforms toward modern mobile ecosystems. The native game segment reached a critical milestone by achieving monthly profitability in overseas operations as of December 2013. This international growth was largely propelled by the success of titles such as Knights & Dragons, which generated over $5 million in revenue within a 30-day window. Domestically, the web game business showed signs of recovery with a 15% month-over-month increase in coin consumption, supported by the launch of several high-performing partner titles. These operational successes are bolstered by a robust pipeline of upcoming releases across diverse genres, which management expects will drive a full turnaround by the fourth quarter. Beyond its core gaming operations, the company is diversifying into advertising, venture capital, and offline entertainment to broaden its revenue base. Organizational adjustments include a total headcount of 2,051 employees and the establishment of a new customer support center in Sendai to improve service quality. As the company enters its tenth year of operation, it remains focused on maintaining strict cost controls while expanding its global footprint and diversifying its business domains to ensure long-term sustainability in the competitive digital entertainment market.

investment market-analysis japan

GREEFeb 2014

Financial

FY2014 First Quarter Financial Results

The financial results for the first quarter of fiscal year 2014 reflect a strategic pivot toward smartphone-centric operations and strict cost management. While net sales decreased quarter-over-quarter to ¥35.3 billion, operating profit rose to ¥9.8 billion, a ¥2.0 billion increase driven by a 12% reduction in total costs. This improvement was achieved through a ¥3.7 billion cut in advertising and fixed expenses, successfully meeting cost-reduction targets ahead of schedule. However, the period also saw a ¥5.2 billion extraordinary loss due to asset write-offs for underperforming titles and provisions for a voluntary retirement program. The operational focus has shifted heavily toward the smartphone market, which now accounts for approximately 65% of total coin consumption. While coin consumption on feature phones continues to decline, smartphone consumption grew by ¥1.6 billion during the quarter. This growth was particularly strong in native game apps for overseas markets and third-party browser games. Overseas operations are currently on track to reach monthly profitability by the end of 2013, supported by the horizontal deployment of successful game engines and marketing techniques. Management expects a full turnaround in sales and profits by the fourth quarter of FY2014. This outlook is based on a revised development pipeline that prioritizes high-quality releases and a transition into new genres beyond traditional card battle games. By realigning development resources and maintaining a leaner cost structure, the company aims to achieve a 15% year-over-year reduction in fixed costs by the end of the fiscal year while expanding its presence in the global native app market.

market-analysis player-demographics mobile+1

GREENov 2013

Financial

FY2013 Fourth Quarter Financial Results

The fiscal year ending June 2013 marked a significant transitional period for GREE, characterized by a decline in overall financial performance alongside a strategic pivot toward the smartphone market. Net sales fell to ¥152.2 billion, while operating profit experienced a 41% year-over-year drop to ¥48.6 billion. This downturn was primarily driven by the erosion of the legacy feature phone web game market and rising fixed costs. To address these challenges, the company recorded a ¥6.7 billion net extraordinary loss for asset write-offs, signaling a commitment to a "selection and concentration" strategy designed to streamline operations and reduce fixed costs by 10% by the end of the following fiscal year. Despite the contraction in traditional segments, the native games business emerged as a critical growth engine, achieving over 30% quarterly growth and accounting for more than 20% of total coin consumption by the fourth quarter. Success was bolstered by global franchises such as Knights & Dragons, which helped establish a stronger international footprint. Moving into fiscal year 2014, the growth strategy centers on the launch of approximately 25 new titles, focusing on smartphone-centric web games and high-performance native apps. The company is also diversifying its revenue streams by expanding into advertising, merchandise, and other non-gaming ventures. Operational stability is supported by a domestic user base of 44.8 million, predominantly composed of adults over the age of 20. To maintain platform integrity and safety, extensive resources are dedicated to 24/7 content monitoring and age verification protocols. These efforts are complemented by industry-wide self-regulation through the Japan Social Game Association, focusing on the prohibition of real money trading and the promotion of educational outreach. This combination of fiscal restructuring, aggressive product development for mobile platforms, and robust safety standards forms the foundation for the company’s projected turnaround.

market-analysis monetization japan

GREEAug 2013

Financial

FY2013 Third Quarter Financial Results

GREE’s financial performance during the third quarter of fiscal year 2013 reflects a period of significant transition and operational restructuring. Net sales declined 4% quarter-on-quarter to ¥37.8 billion, while operating profit fell 24% to ¥10.8 billion, primarily due to the underperformance of smartphone titles in the Japanese market. Despite these domestic challenges, overseas coin consumption doubled, driven by the success of U.S.-based studios. However, the company recorded a ¥4.03 billion extraordinary loss for asset write-offs and issued a downward revision for its full-year forecast, signaling a need for a fundamental shift in business strategy. To address these financial pressures, management is implementing a "selection and concentration" strategy focused on streamlining the title portfolio and enforcing rigorous cost controls. This includes closing the China studio, consolidating office space, and narrowing the development pipeline to approximately 15–20 domestic and five overseas smartphone titles for the year. The company is also leveraging strategic joint ventures with partners like Yahoo! JAPAN and CyberAgent, while integrating Pokelabo’s expertise to improve performance on iOS. The primary objective is to achieve cash-basis profitability for overseas operations by December 2013 through the scaling of successful U.S. studio models. Despite the recent downturn, the company maintains a strong market position with a domestic user base of 40.8 million and a top-ten global ranking for sales on both Google Play and the App Store. Efforts to stabilize the user environment include resolving previous system failures regarding spending limits for minors and establishing new compliance committees with 24/7 monitoring systems. By prioritizing high-performing intellectual property and operational efficiency, the organization aims to recover profitability and accelerate development speed within the competitive global smartphone gaming landscape.

investment market-analysis japan+1

GREEMar 2013

GREE

Documents

FY2016 Second Quarter Financial Results

FY2016 First Quarter Financial Results

FY2015 Fourth Quarter Financial Results

FY 2015 Third Quarter Financial Results

FY2015 Second Quarter Financial Results

FY 2015 First Quarter Financial Results

FY2014 Fourth Quarter Financial Results

FY 2014 Third Quarter Financial Results

FY2014 Second Quarter Financial Results

FY2014 First Quarter Financial Results

FY2013 Fourth Quarter Financial Results

FY2013 Third Quarter Financial Results

FY 2015 Third Quarter Financial Results