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DeNA’s Gaming Unit Profit Soars on China Cost Cuts Despite Revenue Drop

Operating income jumps 14% as the company trims expenses in streaming and healthcare divisions
Japan
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Japanese mobile game developer DeNA Corp. saw its gaming segment profit surge more than fivefold despite falling revenue, helped by aggressive cost reductions at its Chinese operations.

The Tokyo-based company’s gaming unit profit jumped 463% to 2.38 billion yen ($15.8 million) in the fiscal second quarter, even as revenue declined 14% to 22.5 billion yen ($149.7 million). The improved profitability came after significant downsizing of its Chinese operations.

Overall company revenue fell 6.5% to 70.3 billion yen ($467.5 million), while operating profit rose 14% to 5.49 billion yen ($36.5 million). Net income plunged 60% to 3 billion yen ($20 million), hit by foreign exchange losses and the absence of one-time gains from the previous year.

The company’s sports division, which operates the Yokohama DeNA BayStars baseball team, maintained stable profits despite hosting fewer home games. Meanwhile, the live streaming unit swung to a loss as marketing costs increased for its Pococha service.

DeNA withheld full-year guidance citing difficulties in making reasonable projections, but indicated it aims to grow both revenue and operating profit excluding one-time items.

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