Slide 1: FY2016 Third Quarter Financial Results
GREE, Inc. FY2016 Third Quarter Financial Results April 28, 2016 Copyright © GREE, Inc. All Rights Reserved.
Slide 2: Executive Summary
Executive Summary Net Sales ¥16.8 billion, Operating Income ¥3.6 Financial Results billion Overview ⁃ Sales slightly short of expectations, but Operating Income held steady due to successful cost control Progress in development of native games to be released in 4Q ⁃ Plans to release three domest
Slide 3: Contents
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 4: 1. Financial Results Overview
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 5: FY16 3Q Financial Results Overview
1. Financial Results Overview (Consolidated) FY16 3Q Financial Results Overview Net Sales ¥16.8billion, Operating Income ¥3.6billion Billions of Yen FY16 3Q FY16 2Q FY15 3Q QoQ YoY Net Sales 16.81 -1.32 -5.18 18.13 21.99 EBITDA 3.99 -0.37 -2.02 4.36 6.01 Operating Income 3.64 -0.37 -1.27 4.00 4.91 O
Slide 6: Net Sales, EBITDA, and Operating Income
1. Financial Results Overview (Consolidated) Net Sales, EBITDA, and Operating Income Operating Income margin narrowed by 0.5 percentage points to 21.6% Billions of Yen 25.0 25.0% 22.0 22.7% 22.3% 20.9 22.1% 21.6% 20.1% 19.3 18.1 16.8 12.5 12.5% 6.0 4.9 5.1 4.7 4.2 4.4 4.4 4.0 4.0 3.6 0.0 0.0% 3Q 4Q
Slide 7: Operating Income Analysis
1. Financial Results Overview (Consolidated) Operating Income Analysis Operating Income decreased by ¥0.36 billion due to lower sales Billions of Yen ¥0.36 billion Decrease 4.00 -1.32 ＋ 0.88 ＋0.08 3.64 Operating Decrease in Decrease Decrease in Operating Income Net Sales in Fixed Costs* Income Varia
Slide 8: FY16 3Q Cost Structure
1. Financial Results Overview (Consolidated) FY16 3Q Cost Structure Total costs decreased by ¥1.0 billion QoQ to ¥13.2 billion Billions of Yen FY16 FY16 FY15 Factors in change（QoQ） 3Q QoQ YoY 2Q 3Q Mass-media promotion costs (ratio to Net Sales: 2Q 8.9% → Advertising 1.09 -0.53 -0.96 1.61 2.05 3Q 6.
Slide 9: FY16 Earnings Forecast
1. Financial Results Overview (Consolidated) FY16 Earnings Forecast Net Sales of ¥70.0billion, Operating Income of ¥14.0billion Billions of Yen FY16 Forecast Previous 1H Results 2H Forecast Full-year Forecast Difference Forecast （ announced （as of 4/21） 2/4） Net Sales 37.4 32.6 70.0 72.0 -2.0 Operat
Slide 10: 2. Operational Overview
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 11: Review and Summary of 3Q
2. Operational Overview: Summary Review and Summary of 3Q Business Plan Review Launch new titles • Made steady progress toward release of Japan and generate hit Memories of the Blue Native titles • Soul Arms off to a strong start Game Business Over- Business seas • Released League of War Mercenaries
Slide 12: Native Game Pipeline
2. Operational Overview: Summary Native Game Pipeline Plan to release 3 new titles in 4Q, 8 in pipeline for release by 1H FY17 FY16 FY17 Market 3Q 4Q 1H ― Approx. 3titles Approx. 5titles Japan Self-Developed: 2 titles 2 titles Co-Developed: 1 title 3 titles League of War Mercenaries (co-developed) O
Slide 13: Native Games: Progress Made
2. Operational Overview: Native Games Progress Made Coin Consumption Topics Billions of coins Soul Arms released on April 25th 60 6 • Off to a strong start 4.9 4.7 4.4 4.6 4.4 Steady progress in development of Memories of the Blue • Currently preparing for beta testing 3 30 Steady progress in
Slide 14: Releasing New Titles (Soul Arms)
2. Operational Overview: Native Games (Japan) Releasing New Titles Soul Arms released on April 25th • Next-generation full-blown action RPG featuring a battle system that allows multiple players to join-in and amazing belt-scroll action • Playerʼs strive to become the ultimate warrior utilizing over
Slide 15: Development of New Titles (1)
2. Operational Overview: Native Games (Japan) Development of New Titles (1) Steady progress in development of Memories of the Blue • Currently adjusting game balance for beta testing and marketing planning in partnership with LINE Note: Screenshots are of development version 14 Copyright © GREE, Inc
Slide 16: Development of New Titles (2)
2. Operational Overview: Native Games (Japan) Development of New Titles (2) Currently developing Crash Fight • 100% real-time battle game for up to 6 players takes advantage of Pokelaboʼs advanced real-time network technology • Currently debugging and adjusting game balance in preparation for beta t
Slide 17: Native Games (Overseas): Business Progress
2. Operational Overview: Native Games (Overseas) Business Progress Coin Consumption Topics Billions of Coins League of War Mercenaries 6 60 • Global release on March 31st 5.2 • Developing the European market business with this follow up to Knights & Dragons 4.3 3.9 Restructuring to re-ignite gro
Slide 18: Release of New Titles
2. Operational Overview: Native Games (Overseas) Release of New Titles Global release of League of War Mercenaries on March 31 • 3D action strategy game developed in cooperation with MunkyFun Inc. • Selected on the recommended list for App Store and Google Play (in North America) 17 Copyright © GREE
Slide 19: Web Games: Business Progress
2. Operational Overview: Web Games Business Progress Coin Consumption Topics Billions of Coins funplex, Inc.: Game Operator • Smooth launch 25.0 250 • Acquisitions/operation contracts trending 21.7 well above expectations 18.8 16.8 ExPlay: Customer Experience Provider 15.8 14.7 • Leveraging our
Slide 20: New Businesses (1)
2. Operational Overview: Web Games New Businesses (1) Leveraging our know-how from years of game operation to create new service businesses Funplex off to a strong start ExPlay services launched Game operation business Customer experience business Strengths in Game Operation Strengths in Customer Se
Slide 21: New Businesses (2)
2. Operational Overview: Web Games New Businesses (2) Achieving stable growth in markets with growth potential Outlook for growth in Size of game operation game operation business business market Acquisitions/operation contracts Market expanding rapidly trending well above expectations Billions of c
Slide 22: Topics: Home-related Business
2. Operational Overview: Home-related Business Topics Increased orders at Renoco Launch of LIMIA service Steady growth in number of orders Launch of LIMIA Marketplace Member Business Customers / Specialist Response & Broad Needs Proposals to Enquiries 4Q 1Q 2Q 3Q FY15 FY16 • Targeting orders of roug
Slide 23: Topics: Health & Fitness Business
2. Operational Overview: Health & Fitness Business Topics Increased Usage of Increased Usage of Lespas Service Smart Sitter Services Fixed-price fitness lesson service Babysitter introduction service 4Q 1Q 2Q 3Q 12月 1月 2月 3月 FY15 FY16 • Steadily expanding network of affiliates • Steadily expanding n
Slide 24: Topics: Ad Media Business
2. Operational Overview: Ad Media Business Topics Steady Sales Growth at Steady Sales growth at AdColony WOOZ Video advertising distribution platform Video production and casting service 4Q 1Q 2Q 3Q 12月 1月 2月 3月 FY15 FY16 • Steady progress in attracting valuable media • Providing full range of servi
Slide 25: Topics: VR Business
2. Operational Overview: VR Business Topics Establishment of VR Fund Investing in the top VR companies in North America across industries Inves tment Tomb of the Golems Japan VR Summit VR business strategy Marke Devel t opme Prom nt otion First global VR release by a May 10, 2016 Japanese developer
Slide 26: 3. Appendix
Contents 1. Financial Results Overview 2. Operational Overview 3. Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 27: Coin Consumption (1)
3. Appendix Coin Consumption (1) Overall Coin Consumption Web Game Coin Consumption Billions of Coins Billions of Coins 400 40 25 250 21.7 31.3 18.8 27.9 16.8 7.3 25.7 9.1 15.8 24.0 14.7 5.9 22.2 7.8 5.2 4.7 7.0 200 20 4.2 13 125 6.4 5.8 14.4 13.0 11.7 11.0 10.4 12.7 11.0 9.9 9.4 8.8 9.5 9.0 8.8 8.3
Slide 28: Coin Consumption (2)
3. Appendix Coin Consumption (2) Overseas Japan (MM USD) Billions of Coins 300 30 60 60 26.1 23.6 44 21.7 20.4 19.1 12.7 35 11.8 32 10.7 30 30 27 150 15 9.8 9.1 13.4 11.8 11.0 10.5 9.9 0 0 3Q 4Q 1Q 2Q 3Q 3Q 4Q 1Q 2Q 3Q FY15 FY16 FY15 FY16 ■ Third Party ■ Self-Developed Notes: • Classified by area of
Slide 29: FY16 3Q Cost Structure
3. Appendix FY16 3Q Cost Structure Millions of Yen FY15 FY16 3Q FY16 2Q QoQ YoY 3Q Rental Charges 720 - 126 199 846 919 Labor Costs 2,217 - 64 - 809 2,280 3,025 Others 1,274 - 244 - 909 1,517 2,183 Cost of sales 4,210 - 433 - 1,917 4,643 6,127 Advertising 1,088 - 526 - 958 1,614 2,046 Commission Fee
Slide 30: FY16 3Q Balance Sheet
3. Appendix FY16 3Q Balance Sheet Billions of Yen FY16 3Q FY16 2Q FY15 3Q QoQ YoY Current Assets 88.75 - 1.89 - 9.55 90.64 98.30 Fixed Assets 22.06 0.62 - 15.29 21.43 37.35 Total Assets 110.81 - 1.27 - 24.84 112.07 135.65 Current Liabilities 10.29 - 3.69 - 15.80 13.97 26.09 Fixed Liabilities 0.63 -
Slide 31: Breakdown of Group Headcount
3. Appendix Breakdown of Group Headcount Number of Employees Headcount at Group companies End-3Q Japan Game Business - 849 Native Game Business Pokelabo, Wright Flyer Studios (460) Web Game Business - (234) Shared Game Depts. - (155) Includes GREE International (U.S. Studio), GREE Native Game Busine
Slide 32: ■ This document includes some forecasts, which are based on currently available information. Actual
■ This document includes some forecasts, which are based on currently available information. Actual performance may differ due to various factors. ■ When producing this document, we were careful to avoid errors or omissions, but the accuracy and completeness of the provided information is not guaran