Gree (TYO:3632 isn’t leaving gaming. That was the message from today’s earnings report which covered the company’s entire 2014 fiscal year. Revenue and net income continued to slide both for the quarter and for the year. Revenue fell JPY 26.64 billion to JPY 125.6 billion (US$1.23 billion) and net income dropped JPY 5.1 billion to JPY 17.35 billion (US$169.6 million). Although it’s a far cry from the heady days of 2012 when the company scored JPY 47.97 billion (US$469 million) in yearly net income, Gree appears fully determined to return to its former glory.
The company believes that it must double down on “full native” games. A Gree spokesperson spoke with Tech in Asia and explained that the term full native refers to games that are purpose-built to make the most of the graphics and sound effects possible on smartphones and tablets. That’s in contrast to games that were built as web games and then adapted for Android or iOS.
In 2012, the company announced that it would focus on browser-based gaming using HTML5. That era is essentially over. Gree said in today’s earnings report that it decided to initiate an internal restructuring that will take the 700 employees currently working on browser games and have them join the team focusing on full native games. The company will now have 1,000 employees dedicated to full native games, over half of its 1,894 staff. Two titles leading the charge are Shometsu Toshi (released in May) and Cross Summoner (2015 1Q release).
Despite the change in business strategy, Gree maintains HTML5-based browser games will not be a complete relic of the past. The company spokesperson said, “We’ll still be maintaining Gree Platform and welcome third-party game developers launching and operating web games on it. The idea is more to streamline our engineering operations for web games so that in terms of first-party game development we can shift our emphasis toward native games.”
Gree’s insistence that it can win in mobile gaming echoes the claims DeNA (TYO:2432) made during its own most recent subpar earnings. Also similar to DeNA is Gree’s quiet search for alternative revenue streams.
Gree might be committed to mobile gaming but it is still smart enough to hedge its bets.