Japanese mobile game developer CAVE Co. reported a 41% drop in operating profit for the fiscal first half, even as revenue climbed 23%, weighed down by marketing costs for its new title Meteor Arena.
Operating profit fell to 329 million yen ($2.2 million) in the six months ended November, while sales rose to 6.36 billion yen ($42.7 million). Net income declined 35% to 396 million yen ($2.7 million).
The gaming segment, which accounts for over 90% of revenue, saw profits plunge 49% to 305 million yen despite a 15% sales increase. Heavy spending on advertising and payment processing fees for Meteor Arena, launched in September, dented margins.
The company’s Touhou Fantasy Eclipse title, which marked its first anniversary in November, exceeded sales targets through in-game campaigns. Monster Strike, operated by subsidiary Deragee, surpassed 63 million global users in October.
CAVE’s video streaming business turned profitable with a 23 million yen gain, reversing a year-earlier loss, as sales more than quadrupled. The company is expanding into retail operations while strengthening its online marketing.
