Chart of the Week

How historic success and games-as-a-service expertise is keeping DeNA profitable

How historic success and games-as-a-service expertise is keeping DeNA profitable

DeNA's FY13 Q1 financials weren't very good.

Game revenue was down 37 percent year-on-year, while operating profit from games was down 55 percent.

The reason is the company hasn't had a big hit recently.

Yet, with quarterly sales of $349 million, overall profit before tax of $65 million, and $653 million cash in the bank, the business is hardly a disaster.

The past reaches into the future

One reason for this is the ongoing strength of DeNA's historic successes such as Rage of Bahamut.

As this chart graphically demonstrates, games released in 2010 and 2011 are driving the vast majority of revenues, at least in terms of DeNA's first and second party games.

Old games make current profits

Of course, revenue from these games is slowly declining.

Nevertheless, it's proof that once a company can successfully operate games-as-a-service, it can generate relatively high profit margins from a declining player base for years after having a successful product.

Indeed, that's something that Facebook game operator RockYou is now looking to take advantage of as it buys legacy games such as Gardens of Time from Playdom/Disney in the hope it can generate higher revenues.

Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.

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