Gree Inc., the social-network game site operator headed by Japan’s youngest billionaire, cut its annual profit forecast because of delays in adding new games and slower-than-expected overseas sales.
The company expects net income to be from 31 billion yen ($330 million) to 37 billion yen in the year ending June 30, it said in a statement today. It previously forecast 46 billion yen to 52 billion yen.
Gree, run by founder Yoshikazu Tanaka, postponed the introduction of games including ‘Sumo’ and ‘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 company targets foreign markets to offset rising competition at home.
First-half profit fell 18 percent to 18.1 billion yen, while sales rose 7.5 percent to 77.3 billion yen. Operating profit dropped 23 percent to 30 billion yen.
The internet company dropped 2.2 percent to 1,357 yen in Tokyo trading today, before the earnings announcement. It has gained 1.4 percent this year. The company last year agreed to buy Pokelabo Inc. and Funzio Inc. to expand overseas.
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 in November that it planned to ban the practice under a law against unjustifiable premiums and misleading representations. The move hit other developers as well.