Gree closes Chinese studio as profits dip

Japanese mobile company Gree has been forced to close its studio in China, after recording "extraordinary loss" as a result of its recent business performance in its full 2013 fiscal forecast. As part of Gree's third quarter results, the company noted that it has recorded "a one-time write-off of assets related to certain titles." These costs are associated with the company's new game selection strategy. Although the company did not specify which titles it was referring to, it did note that it is closing its Beijing studio to increase the efficiency of its overall development system. Meanwhile, Gree is finding that virtual currency consumption in Japan is falling short of targets. For this reason, the company believes that its Japanese social games will not generate the previously expected sales. But it's not all bad news. Gree is finding that overseas virtual currency consumption is strong, especially in titles like Crime City and Modern War. Gree says it is hoping to quell this recent downward profits shift by focusing on releasing top-quality mobile games, and building on the current momentum of its U.S. studio -- although this seems to clash with the fact that the company just laid off workers at this studio. For the quarter ended March 31, 2013, Gree recorded revenues of 37.9 billion yen ($369.4 million), down 18 percent year-over-year, and profits of 4.7 billion yen ($46.0 million), down 65 percent year-over-year. As for the revised full-year forecast, Gree now estimates revenues of 150 billion yen ($1.5 billion), down around 9 percent on its original forecast, and profits of 24 billion yen ($234.4 million), down around 28 percent on its original forecast.