Japanese social mobile gaming company GREE (TYO:3632) has announced its Q1 FY13 financials for the three months ending September 30.
Net sales were ¥37.9 billion (around $485 million ), up 25 percent year-on-year.
Net profit was ¥9.1 billion (around $120 million), a drop of 4 percent year-on-year.
However, sales were down 5.4 percent quarter-on-quarter, and profit was down 26 percent compared to Q4.
The decline in sequential performance was partly due to an increase in the cost of staff, marketing and commissions to its development partners, up 50 percent to ¥17.4 billion ($220 million).
GREE's sales were also hit by the Japanese government banning the 'gacha' mechanic, which was deemed to be gambling.
The company confessed that its monthly sales (mainly in Japan) hit a low in July but are now increasing again.
Nevertheless, GREE said it will continue its rapid global expansion into 2013.
It's also signed deals with Yahoo! Japan, and will sign up additional third parties to support its social and monetisation platform.
For example, more than 30 new games for the GREE platform were revealed at the Tokyo Game Show in September.
GREE's global offices
It expects full year FY13 sales to be in the region of ¥195-205 billion (around $2.5 billion), with net profit in the range ¥46-52 billion (around $600 million).
GREE ended the quarter with ¥38 billion in cash and cash equivalents (around $480 billion).
However, this is down ¥35 billion (around $450 million) compared to the total of 31 July, reflecting both GREE aggressive investment and the drop in sales.