Slide 1: Financial Results for the Third Quarter of FY Ending June 30, 2012
GREE, Inc. Financial Results for the Third Quarter of the Fiscal Year Ending June 30, 2012 May 8, 2012 Copyright © GREE, Copyright Inc. All Rights © 2004-2007 Reserved. GREE,Inc. All Rights Reserved.
Slide 2: Contents
Contents Initiatives to Improve User Environment FY2012 Third Quarter Business Results Global Strategy Copyright © GREE, Inc. All Rights Reserved.
Slide 3: Initiatives to Improve User Environment
Initiatives to Improve User Environment Copyright © GREE, Inc. All Rights Reserved.
Slide 4: Our Mission and Initiatives to Date
Our Mission and Initiatives to Date Our mission Making the world a better place through the power of the Internet Provide a wide range of useful Internet services to people around the world Accomplishing our mission Encourage more people around the world to use GREE Services that enrich communicatio
Slide 5: Further Initiatives to Improve User Environment
Further Initiatives to Improve User Environment In view of the increased number of users and growth of the social gaming market, we determined it necessary to further strengthen the security of our user environment and ensure its healthy development. As part of this we are implementing the following
Slide 6: Establishment of a System for Promoting User Environment Improvement
Establishment of a System for Promoting User Environment Improvement User Environment Improvement Committee Chairperson (CEO) An internal committee under the direct supervision of the CEO, established to discuss and plan Public measures for improving services, promoting proper Game Customer use of s
Slide 7: Enhancing Customer Support System
Enhancing Customer Support System Customer support system Customer support and website patrol system staffed by approx. 600 personnel GREE Coin Telephone Support, a call center for paid service users Cooperation with consumer organizations Dedicated call centers; full-time staff deal with each
Slide 8: Promoting Service Improvement and Proper Use
Promoting Service Improvement and Proper Use Measures relating to underage users Monthly limits: 15 years old or younger: 5,000 yen per month; 16-19 years old: 10,000 yen per month Provision of clearer guidance at the time of item purchases Measures relating to settlement services Improvement
Slide 9: Enforcing Prohibition of Real Money Trading
Enforcing Prohibition of Real Money Trading Raising awareness of RMT prohibition among users Producing a special page for educational purposes and notes for users Developing a support center for dealing with inquiries regarding RMT activity Tightening monitoring for RMT prohibition on GREE Str
Slide 10: Decline in RMT Activity
Decline in RMT Activity Number of bids for GREE items on a major auction website Unit: items 3500 -50% 3000 2500 2000 1500 1000 500 0 3/6 3/7 3/8 3/9 4/1 4/2 4/3 4/4 4/5 4/6 4/7 4/8 4/9 3/10 3/11 3/12 3/13 3/14 3/15 3/16 3/17 3/18 3/19 3/20 3/21 3/22 3/23 3/24 3/25 3/26 3/27 3/28 3/29 3/30 3/31 4/10
Slide 11: Reference: Underage Usage
Reference: Underage Usage Breakdown of registered members by age group Percentage of paid services revenue deriving from underage users 3.0% 3.3% 0～15歳 0–15 Under 18 18歳未満 16歳～19歳 16–19 21% 12% 6% 18–19 18～19歳 20– 20歳～ 20s 20代 34% 27% 30s 30代 40s– 40代以上 93.7% * As of March 2012 Copyright © GREE, Inc
Slide 12: FY2012 Third Quarter Business Results
FY2012 Third Quarter Business Results Copyright © GREE, Inc. All Rights Reserved.
Slide 13: FY2012 Third Quarter Highlights
FY2012 Third Quarter Highlights Strong start for GREE’s first social games to target global market (*1) Number of members reached 230 million(*2) worldwide and is increasing at an accelerated pace Progress of global Continued investments globally in strengthening data expansion center infrastruc
Slide 14: FY2012 Third Quarter Financial Results (Consolidated)
FY2012 Third Quarter Financial Results (Consolidated) (Unit: million yen) 3Q of FY2012 ※ 2Q of FY2012 QoQ 3Q of FY2011 YoY (Jan.-Mar. 2012) (Oct-Dec. 2011) (%) (Jan.-Mar 2011) (%) Net sales 46,189 41,529 +11% 16,372 +182% Operating profit 24,549 22,535 +9% 8,199 +199% Ordinary profit 24,505 22,461 +
Slide 15: Net Sales & Operating Profit (Consolidated)
Net Sales & Operating Profit (Consolidated) (Unit: million yen) 50,000 46,189 45,000 41,529 40,000 35,000 30,432 30,000 24,549 25,000 22,535 21,093 20,000 16,372 16,646 14,302 15,000 12,410 9,789 10,000 8,199 6,221 6,924 5,000 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2011年6月期 FY2011 2012年6月期 FY2012 売上高 Net sales 営業利益
Slide 16: Sales by Business (Consolidated)
Sales by Business (Consolidated) Paid Services Sales Advertisement Sales (Unit: million yen) (Unit: million yen) 50,000 3,500 3,238 3,306 45,000 42,882 3,000 2,928 40,000 38,290 2,706 2,466 35,000 2,500 2,363 2,262 30,000 27,503 2,000 25,000 18,387 1,500 20,000 15,000 13,906 11,938 1,000 10,147 10,0
Slide 17: FY2012 Third Quarter Operating Expenses (Consolidated)
FY2012 Third Quarter Operating Expenses (Consolidated) (Unit: million yen) 3Q of FY2012 2Q of FY2012 QoQ 3Q of FY2011 YoY (Jan.-Mar. 12) (Oct.-Dec. 11) (%) (Jan.-Mar. 11) (%) Cost of sales: 3,678 2,745 +34% 1,443 +155% Rental charges 2,099 1,257 +67% 566 +271% Labor costs 979 951 +3% 525 +86% Others
Slide 18: FY2012 Third Quarter Balance Sheet (Consolidated)
FY2012 Third Quarter Balance Sheet (Consolidated) (Unit: million yen) 3Q of FY2012 2Q of FY2012 QoQ 3Q of FY2011 YoY (Mar. 31, 2012) (Dec. 31, 2011) (%) (Mar. 31, 2011) (%) Current assets 102,657 84,851 +21% 41,108 +150% Cash and cash 51,662 31,634 +63% 23,165 +123% equivalents Receivables 32,993 38
Slide 19: GREE Global User Base
GREE Global User Base Registered users (Unit: millions of people) 欧米アジア等 Europe, U.S., Asia, etc. 日本 Japan 250 +45 234 100% 220 15.3% 14.3% 13.5% 12.9% 19.9% 18.8% 17.8% 17.4% 16.4% 24.3% 22.9% 21.4% 205 200 189 80% 174 162 155 145 60% 150 134 123 113 105 84.7% 85.7% 86.5% 87.1% 100 40% 75.7% 77.1%
Slide 20: User Demographics (Japan)
User Demographics (Japan) By area By gender Hokkaido 9% 男性 Male Tohoku 47% 53% 女性 Female 7% Tokyo Metropolitan Koshin-etsu/ Area Hokuriku 34% By age 5% Chugoku/ Shikoku Tokai 7% 11% 21% 12% 6% Under 18 18歳未満 18～19歳 18,19 Kyushu/ 20代 20 to 29 Okinawa Kinki 27% 34% 30 to 39 30代 11% 16% 40 and above 40
Slide 21: FY2012 Third Quarter Operational Review (Japan)
FY2012 Third Quarter Operational Review (Japan) Progress in smartphone support Decoration photo app for smartphones More in-house and cobranded social “GREE Deco Photo,” a decoration games for smartphones, such as photo app for smartphones, launched “Dragon Ark,” “Majin Kingdom” and as the first
Slide 22: FY2012 Business Strategy (Japan)
FY2012 Business Strategy (Japan) Strengthen in-house and partner game lineup using strong IP Title Device Period Some in-house titles Dragon Ark Feb. (Jan.–Mar.) SP FY2012 2Q Majin Kingdom SP March AKB48StageFighter SP March 2–3 in-house titles SP Apr.–Jun. “Dobutsu Friends” (scheduled to be
Slide 23: Global Strategy
Global Strategy Copyright © GREE, Inc. All Rights Reserved.
Slide 24: Rapidly Growing Global Mobile Gaming Market
Rapidly Growing Global Mobile Gaming Market Computer and smartphone shipments(global) Mobile gaming market transition (global) Global PC and Smartphone Shipments Global Mobile Gaming Market Growth Estimate （Unit: millions） （Unit: Billion yen） 1,600 1,400 1,400 1,200 1,000 800 600 400 306 200 0 2010
Slide 25: Global Initiatives to Date
Global Initiatives to Date While preparing for the global rollout of the GREE Platform, we launched three in-house social games targeting the global market(*) Proved that expertise acquired from social games (card games and game events, etc.) popular in Japan can be applied globally 2011 2012 Fe
Slide 26: Strategy: Accelerate Success Models Globally
Strategy: Accelerate Success Models Globally Accelerate global monetization by leveraging development capabilities to provide a rich variety of social games and marketing expertise to grow user base ✔： In progress ✔： Completed ✔： Scheduled Elements Measures Status Expansion of Japan success mode
Slide 27: Acquisition of Funzio: Secures success model in N. America, Europe
Acquisition of Funzio: Secures success model in N. America, Europe Secured tactical roleplaying games popular in North America and Europe Timing of Timing of Timing of release Aug. 2011 release Dec. 2011 release Apr. 2012 Cumulative 8.59 million DL (as of the end of Cumulative 6.82 million DL (as of
Slide 28: Acquisition of Funzio: Secured experienced management team
Acquisition of Funzio: Secured experienced management team Core members • Ken Chiu, CEO overall direction & product strategy • Co-Founder and CEO of Storm8 • General Manager at Zynga heading the XWars • Joined Zynga following acquisition of his Facebook application • Anil Dharni, President & COO
Slide 29: Acquisition of Funzio: Sales and market position
Acquisition of Funzio: Sales and market position U.S. App Store Overall Grossing Funzio quarterly sales Comparison in the number of applications in top 50 (*1) (Unit: US$ million) Rank Corporate name No. of applications 1st Zynga(*2) 4 2nd Funzio, Inc 3 2nd Electronic Arts(*3) 3 2nd TinyCo, Inc. 3 3
Slide 30: Acquisition of Strong Global IP
Acquisition of Strong Global IP “Assassin’s Creed,” a popular series with over 38 The “Gang Star” series has been in the top ten of million units sold worldwide since its release the App Store sales rankings in Europe and Asia Ubisoft® “Assassin’s Creed” Gameloft “Gang Domination” The first mobile
Slide 31: Enhancing Cutting-edge Development Technology
Enhancing Cutting-edge Development Technology Capital and Business Alliance with Wizcorp Capital Alliance with Canada’s IUGO Mobile Entertainment Company Wizcorp Inc. Company IUGO Mobile Entertainment Inc. Representative Hansali Guillaume Representative Hong-Yee Wong Location Higashi-nihonbashi, Chu
Slide 32: Create a 1 billion user service
Looking ahead Further promote expansion and monetization of members, through the global rollout of the GREE Platform and a rich variety of social games 2012 May 2012 May 2012 Jul.–Sep. 2012 (4Q) Sep. 2012 By Dec. 2012 Acquire Funzio Begin global rollout of 50–60 partner games GREE Platform plan to
Slide 33: Appendix
Appendix Copyright © GREE, Inc. All Rights Reserved.
Slide 34: SNS + Social Games
SNS + Social Games 会 員 Users SNS Social games My Apps Diary / Comments Community / MB Growth in Purchase of Page Views items Advertisement Sales Paid Service Sales GREE 33 Copyright © GREE, Inc. All Rights Reserved.
Slide 35: In-house social games
In-house social games “Tsuri-Sta” “Tanken Doliland” “Hacöniwa” “Odoriko Clinoppe” “Mon-Pla” Feeling Fantastic! Play Fishing New exploration type card game Easy gardening experience One-of-a-kind pet you can keep in A Blockbuster! Monster Adventure Game with your mobile! (released in (released in Aug
Slide 36: Wide Variety of Revenue Sources
Wide Variety of Revenue Sources Advertisement - Original ads (banners/text) - Tie-up ads GREE Mobile screen Advertisement Sales Social games - Free-to-play games linked to social network - Rich lineup includes in-house games Paid Avatar Service Sales - User can create a virtual self by combining fac
Slide 37: Improving Safety & Security
Improving Safety & Security 24時間365日の GREE patrol system runs パトロール体制 GREE 24 hours a day, 365 days a year A 24 hour, 365 days per year patrol service begun in November 2006. EMA GREE Patrol Centers were established in Tokyo, Hokkaido, and Okinawa, employing about (Content Evaluation and Monitor
Slide 38: Improving Safety & Security: Educational Activities On- and Off-site
Improving Safety & Security: Educational Activities On- and Off-site Educational activities on-site From February 2009, GREE joined the “Motto Good Net” initiative of the Safe Net-Making Promotion Conference, and maintains an official “Motto Good Net” account in GREE. From July 2011, links were
Slide 39: Making the world a better place through the power of the Internet.
Making the world a better place through the power of the Internet. ■ This document includes some forecasts, which are based on currently available information. The authenticity of the information is not guaranteed. Actual performance may differ due to various factors, etc. ■ When producing this docu