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Four years on, GREE writes off $75 million from its OpenFeint acquisition

Also drops $78 million from Pokelabo deal
Four years on, GREE writes off $75 million from its OpenFeint acquisition

Japanese mobile game developer, publisher and platform company GREE (TYO:3632) has announced its FY15 Q2 financials, for the three months ending 31 December 2014.

Net sales were $201 million, down 1 percent quarter-on-quarter and down 9 percent year-on-year.

Ordinary income was $58.5 million, down 1 percent quarter-on-quarter and 4 percent year-on-year.

However, because of two extraordinary accounting charges, GREE made a net loss of $64 million during the quarter.

These two goodwill impairments, which combine to a total value of $156 million, relate to historic acquisitions; GREE's $104 million purchase of US mobile platform OpenFeint in 2011 and its purchase of Japanese developer Pokelabo for $170 million in 2012.

GREE wrote off $75 million of goodwill from OpenFeint (officially it closed the platform in 2012) and $78 million of goodwill from Pokelabo.

On the positive side, GREE made a gain of $59 million during the quarter by selling its stake in Japanese publisher Gumi Inc, which recently floated on the Tokyo Stock Exchange.

Long road ahead

In terms of operations across the rest of FY15, GREE will continue its pivot from mobile browser games to native games. It and its partners have 17 games in development, of which 11 will be released in the next three months.

In Japan, it said its title Shometsu Toshi had experienced strong growth, with three million downloads to-date. GREE is working with Opera-owned video advertising platform AdColony in Japan, and will also release games with LINE and operator KDDI later in the year.

GREE's plan for FY15
GREE's plan for FY15

Internationally, GREE said games such as War of Nations and Knights & Dragons had experience month-on-month revenue growth.

GREE's business is evenly split between Japan and the rest of the world.

Full FY15 sales are expected to be around $820 million, although GREE doesn't expect to make any profit, merely to breakeven.

Things are on the slide for GREE
Things are on the slide for GREE

This is a far cry from FY12 when the company had sales of over $1.5 billion.

GREE ended the quarter with cash and equivalents worth around $620 million.

[source: GREE IR]