Gree Slumps on Lower Profit Forecast, Game Delays: Tokyo Mover
Stock Chart for Gree Inc (3632)
Gree Inc., the social-network game site operator headed by Japan’s youngest billionaire, fell the most in more than nine months in Tokyo after cutting its profit goal on new game delays and slower-than-expected overseas sales.
Gree declined 15 percent, the biggest drop since May 7, to 1,150 yen on the Tokyo Stock Exchange. The benchmark Nikkei 225 Stock Average lost 1 percent.
Gree, run by founder Yoshikazu Tanaka, postponed the introduction of games including “One Piece” to the second half of its fiscal year after having to spend time removing a feature from existing games that was ruled illegal. Overseas sales also missed expectations, even as the Tokyo-based company targets foreign markets to offset rising competition at home.
The company needs to boost user activity through offering popular titles and to demonstrate its overseas operations will be profitable, Yuki Nakayasu, a Tokyo-based analyst at Credit Suisse Group AG, wrote in a report.
Net income will be between 31 billion yen ($333 million) and 37 billion yen in the year ending June 30, the company said yesterday. It previously forecast 46 billion yen to 52 billion yen. First-half profit fell 18 percent to 18.1 billion yen, while sales rose 7.5 percent, Gree said yesterday. Operating profit dropped 23 percent.
Gree cut its full-year sales forecast to as low as 160 billion yen from a minimum of 195 billion yen. The operating profit forecast was pared to as little as 50 billion yen from at least 74 billion yen.
The company removed a feature from online games, known as “complete gacha,” after Japan’s Consumer Affairs Agency said last year it planned to ban the practice under a law against unjustifiable premiums and misleading representations. The move hit other developers as well.
DeNA Co., operator of the Mobage game network, slipped 2.4 percent to 2,744 yen.
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