Gree Slumps After Forecasting Sales Drop on Delayed GamesChris Shimamoto
Gree Inc., the Japanese maker of mobile phone games such as Knights & Dragons, plunged the most since February in Tokyo trading after forecasting a sales decline as new titles were delayed.
The shares dropped 7.6 percent, the biggest decline since Feb. 20, to close at 905 yen in Tokyo trading. Gree yesterday forecast revenue for the year ending June would fall 15 percent to 129 billion yen from a year earlier. That missed the 134.8 billion yen average of 20 analyst estimates compiled by Bloomberg as of yesterday.
Gree, which also operates a social networking platform, generates revenue through advertising and in-games sales of virtual items such as magic potions. The company had 41.9 million domestic users as of March, according to a presentation.
“The company now needs new hits as soon as possible,” Yuki Nakayasu, an analyst with Credit Suisse Group AG said in a note yesterday. “Expectations of a rebound have been pushed back.”
Earnings figures suffered as a result of a shortage of new titles and declining popularity of browser-based games, said company spokesman Ronan Hand. “We’ve started measures to rectify that,” he said.