Japanese mobile publisher DeNA (TYO:2432) has announced its FY14 Q1 financials, the three months ending 30 June 2014.
Total revenue was $349 million (¥35.8 billion), down 31 percent year-on-year.
Of this, 80 percent or $278 million came from DeNA's mobile games business, 12 percent from e-commerce and 8 percent from other sources such as its baseball team.
Games revenue was down 37 percent, while operating profit from games was down 55 percent.
Overall profit before tax for the entire business was $65 million (¥6.7 billion), down 62 percent.
Pressure, pressure everywhere
The primary reason is that the company' legacy mobile browser business in Japan is in decline, while the company is experiencing strong competition in the native smartphone game market from developers such as GungHo Online (Puzzle & Dragons) and Colopl (Quiz RPG).
It's also struggling in international markets such as China, the US and Europe, again because of local competition from companies such as Supercell, Glu Mobile, Locojoy and IGG.
CEO Isao Moriyasu attempted to put a positive spin on the results, however.
"We have an exciting variety of mobile games in our pipeline, including a number of titles in new genres and ones based on blockbuster intellectual properties," he said.
A gene for success?
For this reason, while keeping games as a core part of the business, DeNA is looking to expand outside of games, notably in healthcare, recently announcing a Mycode, a genetic testing service.
Yet, the core driver of current business - consumption of its Mobage platform's MobaCoins - was down 14 percent year-on-year to $367 million.
In Japan, consumption was down 31 percent.
More than $40 million opf MobaCoin consumption happened outside of Japan, via DeNA's international business.
This is down from $80 million in Q1 FY13, however.
Looking to turn around this situation, DeNA said it was finding success outside of the company's core trading card genre in the west and would be rolling out games based on "successful intellectual property".
In the west, DeNa has published games based on the Transformers and Marvel brands.
The company ended the quarter with cash and equivalents of $653 million (¥66.9 billion).
[source: DeNA]
