Japanese gaming firm CROOZ plans to book 534 million yen ($3.6 million) in bad debt provisions after its blockchain subsidiary struggled to collect payments from troubled game development partners.
The Tokyo-based company said its unit CROOZ Blockchain Lab faces mounting receivables from partners grappling with deteriorating cash flows. These partners, which operate various game titles developed and promoted by CBL, have fallen behind on payments due to underwhelming sales and extended development timelines for new releases.
While CROOZ continues negotiations with the affected partners about payment schedules, the company acknowledges it currently lacks a feasible collection plan. Management indicated their strategy hinges on helping these partners boost their game sales, as this remains their primary revenue source.
The provision will be recorded as an extraordinary loss in CROOZ’s financial results for the six months ended September 30. This development highlights the growing risks in Japan’s gaming sector, where smaller developers increasingly face financial pressures from rising development costs and intense market competition.