CyberStep Inc. posted widening losses for fiscal 2025 as revenue declined across its core online gaming operations, highlighting challenges facing smaller Japanese game developers in an increasingly competitive market.
The Tokyo-based company reported an operating loss of ¥1.79 billion ($11.7 million) for the year ended May 31, compared with a ¥1.46 billion loss in the previous period. Revenue fell 16.1% to ¥2.50 billion ($16.4 million), marking the second consecutive year of double-digit declines.
CyberStep’s online gaming division, which includes titles like Onigiri and CosmicBreak, saw revenue drop 21.6% to ¥2.20 billion as user acquisition became more challenging. The segment’s operating loss expanded to ¥604 million from ¥538 million previously, despite company-wide cost reduction measures.
The entertainment business, launched to diversify beyond gaming, generated ¥306 million in revenue but posted a ¥635 million operating loss. Japan’s gaming market is experiencing significant consolidation, with mobile gaming accounting for approximately 60% of total revenue, putting pressure on traditional online game operators.
Management cited intensified competition for user acquisition and operational restructuring as key factors behind the gaming division’s struggles. The entertainment unit faced higher production costs and slower-than-expected revenue growth from video content creation and merchandise sales.
CyberStep declined to provide fiscal 2026 guidance, stating it cannot calculate reasonable projections at this time. The company trades on the Tokyo Stock Exchange under ticker 3810 and has operations across Asia and the United States.
The results underscore broader challenges facing mid-tier Japanese gaming companies as they compete with larger rivals and adapt to shifting player preferences. Japan’s mobile revenue fell approximately 7% in 2024 amid economic challenges, according to industry data.
