Aggressive company expansion comes with big price tag

Gree sales up, profits down

Gree sales have climbed by 25 per cent from last year for Q1 2013 but overall profits are down due to an increase in spending, the mobile gaming giant has reported.

The Japanese social games company has been busy capitalising on its success with a big expansion in the US, but this push into new markets has yet to see rewards outpacing the risks.

While profits were down by just five per cent, the cost of sales has skyrocketed to $57 million- an increase of 123 per cent.

The relatively high pay scale of American employees is largely to blame, but it cannot be denied that a 25 per cent growth in revenue suggests the investment will pay off in the long run.

Paid service sales rose by 26 per cent to $28 million, while advertising was down from last quarter, but up 14 per cent from last year.

Gree also labelled Pokelabo – recently acquired for $175 million – as a major arm of the company strategy for the current fiscal year to reach the top grossing position on the iOS App Store.

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