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2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
2011_1Q_en
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  • 1. GREE, Inc.Financial Results for the First Quarter of the Fiscal Year Ended on June 30, 2011 November 1, 2010 Copyright © 2004-2010 GREE, Inc. All Rights Reserved. Copyright © 2004-2007 GREE,Inc. All Rights Reserved.
  • 2. First Quarter FYE 6/2011 Highlights Japan’s No.1 SNS ■ Became Japan’s No.1 SNS with 22.46 million Achieved members as of September 2010 Japan’s largest ■ Acquired new members over a wide age range. With user base members over the age of 30 accounting for 46% as of September 2010 ■ Launched “Pirate Kingdom Columbus”, its sixth first- Strengthened party social game, in August 2010, and started a Monthly fee plan for Hacöniwa in September 2010 social game business ■ Game ARPU has steadily increased thanks to a strong lineup and a variety of payment options to suit user needs ■ Added around two hundred third-party social games Expanded from a wide variety of partners to the “Gree Platform” “GREE as of October 2010 Platform” ■ Continues providing a wide variety of social features to increase user activity 1 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 3. First Quarter FYE 6/2011 Income Statement (JPY MM) 1Q FYE 6/11 4Q FYE 6/11 QoQ 1Q FYE 6/10 YoY (Jul-Sep 11) (Apr-Jun 11) (%) (Jul-Sep 10) (%)Net sales 12,410 10,940 +13% 6,837 +82%Operating profit 6,221 5,294 +18% 3,939 +58%Ordinary profit 6,227 5,303 +17% 3,942 +58%Net income 3,695 3,113 +19% 2,129 +74% 2 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 4. Net Sales and Operating Profit(JPY MM)14,000 12,41012,000 10,94010,000 9,273 8,180 8,000 6,837 6,221 6,000 5,270 5,294 5,073 3,939 4,000 2,000 0 1Q 2Q 3Q 4Q 1Q FYE 6/2010 FYE 6/2011 Net sales Operating profit 3 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 5. Sales Breakdown Paid Services Sales Advertisement Sales (JPY MM) (JPY MM)12,000 2,500 2,262 10,14710,000 1,972 8,970 2,000 1,811 1,751 8,000 7,462 1,536 1,500 6,429 6,000 5,300 1,000 4,000 500 2,000 0 0 1Q 2Q 3Q 4Q 1Q 1Q 2Q 3Q 4Q 1Q FYE 6/2010 FYE 6/2011 FYE 6/2010 FYE 6/2011 ■ “Mon-Pla” and “Pirate Kingdom ■ “GREE Platform” expanded Columbus” contributed to the advertisement sales for partners growth in Paid Services Sales 4 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 6. First Quarter FYE 6/2011 Operating Expenses (JPY MM) 1Q FYE 6/11 4Q FYE 6/11 QoQ 1Q FYE 6/10 YoY (Jul-Sep 11) (Apr-Jun 11) (%) (Jul-Sep 10) (%) Cost of sales: 786 1,046 △25% 634 24% Rental Charges 386 717 △46% 454 △15% Labor costs 236 203 16% 120 96% Others 162 125 29% 59 174% SG&A: 5,402 4,598 17% 2,263 139% Advertising 3,321 2,714 22% 1,127 195% Paid-charge 1,159 969 20% 602 93% commissions Labor costs 267 224 19% 125 113% Others 654 690 △5% 408 60% ■ Rental Charges: Invested in the last quarter, the rental charges decreased ■ Advertising: Continued investment focused on cost-effectiveness ■ Labor costs: Continued steady recruitment 5 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 7. First Quarter FYE 6/2011 Balance Sheet (JPY MM) 1Q FYE 6/11 4Q FYE 6/11 QoQ 1Q FYE 6/10 YoY (Jul-Sep 11) (Apr-Jun 11) (%) (Jul-Sep 10) (%) Current assets 28,344 30,903 △8% 14,872 91% Cash and cash 16,973 21,354 △21% 9,046 88% equivalents Receivables 9,308 7,682 21% 4,950 88% Others 2,063 1,866 11% 875 136% Fixed assets 2,301 1,267 82% 483 376% Assets 30,645 32,170 △5% 15,356 100% Current liabilities 7,519 11,617 △35% 4,216 78% Liabilities 7,522 11,617 △35% 4,216 78% Paid-in capital 2,118 2,113 0% 2,093 1% Capital reserves 2,116 2,111 0% 2,091 1% Retained earnings 18,889 16,330 16% 6,954 172% Shareholder’s 23,123 20,552 13% 11,139 108% equity ■ Current assets: Decreased with Dividends and Corporate tax, etc ■ Fixed assets: Increased with PP&E, Investment securities, and Other ■ Current liabilities: Decreased with Corporate tax, etc 6 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 8. First Quarter FYE 6/2011 Cash Flow Statement (JPY MM) 1Q FYE 6/11 4Q FYE 6/11 1Q FYE 6/10 (Jul-Sep 11) (Apr-Jun 11) (Jul-Sep 10)Net cash provided by operating activities △2,072 5,735 △1,317Net cash provided by investment activities 8,781 △234 △120Net cash provided by financing activities △1,090 13 △110Cash and cash equivalents at the end of the 16,973 11,354 9,046period■ Net cash provided by operating activities : Decreased with Corporate tax, etc■ Net cash provided by investment activities : Increased with Fixed deposit■ Net cash provided by financing activities : Decreased with Dividends 7 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 9. Registered Members and Page Views Registered Members Page Views (Unit MM) (Unit Bn)25.00 50.00 46.52 22.46 mobile 44.22 21.95 45.00 21.25 40.83 20.59 PC 19.8320.00 19.01 40.00 18.43 35.36 17.78 17.29 16.73 35.00 16.20 15.70 15.12 30.00 28.0615.00 25.4226.08 25.39 25.61 24.71 24.81 23.70 25.0010.00 20.00 15.00 5.00 10.00 5.00 0.36 0.30 0.26 0.30 0.29 0.34 0.34 0.38 0.40 0.41 0.44 0.50 0.00 0.00 Oct-09 Feb-10 Mar-10 Apr-10 Nov-09 Dec-09 Sep-09 Jan-10 Jun-10 Jul-10 Aug-10 Sep-10 May-10 Oct-09 Dec-09 Jan-10 Jun-10 Jul-10 Mar-10 Feb-10 Apr-10 Sep-10 Nov-09 Aug-10 May-10 8 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 10. Member Demographics By area By gender Hokkaido 9% 男性 Tohoku 48% 52% 女性 7% Tokyo Metropolitan Koshinetsu/ Area Hokuriku By age 33% 5%Chugoku/Shikoku Tokai 19% 14% 7%8% 11% Under 18 18,19 Kyushu/ 27% 20 to 29 Okinawa Kinki 33% 30 to 39 11% 16% 40 and above Note: as of September 30, 2010 9 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 11. First Quarter FYE 6/2011 Business Report Increased paid service sales August-2010 September-2010 Launched Started “Pirate Kingdom Columbus” “Monthly fee plan for Hacöniwa” ( Pirate battle game ) (NTT DoCoMo) ■ Accelerated growth in the game ■ Increased paid services sales with market by diversifying contents, extra payment methods including a new first party social game 10 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 12. First Quarter FYE 6/2011 Business Report Expanded the “GREE Platform” ■ Opened the “GREE Platform” to all developers  Simplified the procedures for submission of social applications on the “GREE mobile version”  Provides open systems to developers for launching social applications Cave Co., Ltd. ”Shiro-tsuku” Sumzap, Inc.”COORDE MANIA” ■ Hosting Service  Partnered with SAKURA Internet Inc., NIFTY Corporation, and Livedoor Co., Ltd.  To provide a wide range of hosting solutions and technical advise for third party developers ■ Customer Support Service  Partnered with E-Guardian Inc.  To provide quality customer services, including 365-days customer support 11 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 13. First Quarter FYE 6/2011 Business Report Summary of “GREE Platform” Unique user growth rate on the “GREE Coin usage growth rate ( daily average ) Platform”(daily average) (Index (June 2010 = 1)) (Index (June 2010 = 1)) 12 4.5 4 10 3.5 8 3 2.5 6 2 4 1.5 1 2 0.5 0 0 June July August September October July August September October 12 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 14. FYE 6/2011 Business Strategy Expand first-party social games portfolio Plans to launch more first-party social games Accelerate the growth of the “GREE Platform” Will launch several popular third-party titles And a wide a variety of non-game applications Strengthen services on multiple devices Develop contents for smartphones Plans to start offering the “GREE” service on a variety of smartphones by the end of the year Expand our overseas business Capital partnership with Project Goth, Inc. which owns “mig33”, one of the largest mobile SNS’s in emerging countries Plan to open offices in Asia and North-America 13 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 15. Appendix Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 16. SNS + Social Games Members SNS Social games Q&A Diary /Comments Community/ MB Growth in Purchase of Page Views items Advertisement Sales Paid Service Sales GREE 15 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 17. In-House Social Games “Tsuri-Sta” “Odoriko Clinoppe” A fishing game where members enjoy A virtual pet game that allows members to collecting “fishing” gear and participating “raise” their own original “Clinoppe” in team events with other members “Tanken Drilland” “Hacöniwa” A gardening game where members grow andAn adventure game where members enjoy collect different flowers and plants to createsearching for treasures and exchanging their own personal miniature gardeninformation about their collections with othermembers “Mon-Pla” “Pirate Kingdom Columbus” A monster battle game where members train and A pirate battle game where members enjoy expanding their breed monsters by going on adventures, playing pirate kingdoms by going on adventurous journeys to with and doing battle and with other members various lands in search for treasures 16 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 18. Wide Variety of Revenue Advertisement - Advertisement (Banner/Text) - Tie upGREE Mobile screen Advertisement Ad Spot Sales Avatar - Sales of avatar clothing and cosmetic changes Paid Social games Service Sales - A wide variety of micro-transaction based social games 17 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 19. Safety & Security① 24-hour-a-day, 365-day-a-year GREE Patrol System EMA (Contents Evaluation and Monitoring Association)  Started a 24hour-a day, 365-day-a-year third-party Patrol service in November 2006 Certificated as a  Established a GREE Patrol center within the main headquarters “Safe Content Sites”  Continuous strengthening of the patrol systems to maintain safe GREE Patrol content② The “Safety and Security Committee”  The CEO serves as chairman of the Committee  Enable prompt responses to problems  Committee meeting held once a month with board members, patrol officers, and the legal team ③ Protection and Education of Youth  Introduced a new age restriction for certain services and the use of monthly fee services  Creation of educational content and relevant warnings for younger Screening/ Warning/ members Monitoring Deletion ④ Obtained a third-party certificate as “Safe Content Sites” Harmful Postings  The first “Safe Content Sites” certified by “EMA” on Aug 2008  GREE patrol system surpasses EMA standards and has continuously passed EMA reviews 18 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 20. Safety & Security: the latest projects①Strengthen the site patrol:October 2010  Strengthened surveillance to reduce risk of abuse by strangers  Raised the penalty for in-service e-mail which includes personal information  Improved search systems for inappropriate words and content② Strengthen usage limit by age:October 2010  Strengthened the age limits for in-service e-mail to protect minors  Limit the e-mail format for users when e-mailing users under 18  Limit the change of registered birth date in order to protect minors③Awareness campaign with TV commercial  Summer vacation TV commercial campaign  Online safety education for minors and their parents 19 Copyright © 2004-2010 GREE, Inc. All Rights Reserved.
  • 21. This material is presented solely for purposes of illustration and discussion and may includeinformation that is based, in part of in full, on hypothetical assumptions. Copyright © 2004-2010 GREE, Inc. All Rights Reserved.

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