Gree, locked in a battle with DeNA for the mobile social games leadership in Japan, announced yesterday they were revising their revenue and profit estimates for their fiscal year that ends in June of 2012. The revision is due to a better-than expected second quarter, which has resulted in Gree boosting the sales estimate for the year to between $2.1 billion to $2.2 billion from their previous estimates of $1.7 billion to $1.8 billion, an increase of over 20%. Net income was raised from $431 million to $509 million to $574.6 million to $652.9 million, an increase of between 28.2% to 33.3%.
Their operating profit estimate was raised to between $1.04 billion to $1.175 billion, which means their operating profit is running in the 50% range. Not a bad margin at all. An interesting comparison is to look at the recently released figures for Facebook, which showed revenue of $3.71 billion for 2011, with net income of $1 billion. So Gree is roughly 60% the size of Facebook, but may well outdo them on profitability. When you consider that Facebook is worldwide (except for China) and Gree is generating that overwhelmingly in Japan only, you start to wonder what Gree is going to look like in a few years as their expansion proceeds.
The second quarter numbers from Gree's big rival, DeNA, are coming out on February 7, and they should be interesting to see. Unlike Facebook, Gree has a rival in DeNA that is roughly the same size. Both companies have aggressive worldwide expansion plans, and obviously plenty of money to fuel their ambitions.
