Japanese mobile game developer Drecom Co. reported a widening quarterly loss despite revenue doubling, as asset impairments from underperforming titles overshadowed gains from its flagship Wizardry franchise.
The Tokyo-listed company posted a net loss of ¥1.8 billion ($12.1 million) for the April-June quarter, compared with a ¥153 million loss a year earlier. Revenue climbed 110% to ¥4.47 billion, driven largely by Wizardry Variants Daphne, a mobile dungeon-crawler that launched in October 2024.
The enlarged losses stemmed from a ¥1.56 billion impairment charge on software assets related to a new mobile game that failed to meet sales expectations. The writedown highlighted persistent challenges facing smaller Japanese game studios as they compete for user attention in an increasingly crowded market.
Drecom’s gaming division generated ¥4.33 billion in revenue, though segment profit declined 52% as marketing costs and platform fees ate into margins. The company operates 11 mobile titles, with Wizardry Variants Daphne accounting for roughly a quarter of overall sales in recent months.
Management cut full-year guidance significantly, now projecting revenue of ¥17.5 billion versus an earlier ¥20 billion target. Operating profit expectations dropped to ¥500 million from ¥1 billion, while the company now anticipates a ¥1.3 billion net loss instead of a ¥500 million profit.
Drecom shares have declined 22% over the past year, underperforming the broader Tokyo market as investors remain cautious about mobile gaming valuations.
