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Kayac Inc. Reports Sharp Decline in Q2 Profits Due to Weak Ad Market

The company’s hyper-casual game segment struggles despite new releases, impacting overall earnings
Japan
k 3904.TSE Games 75
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Kayac Inc. has reported a significant decline in its consolidated financial results for the second quarter of the fiscal year ending December 2024. The company faced challenges in its hyper-casual game business as market advertising prices fell more than anticipated in April and May, leading to a drop in both revenue and profit.

Kayac’s sales for the quarter decreased by 5.1% year-on-year to ¥7.73 billion (US$53 million), while operating profit plummeted by 87.4% to ¥50 million (US$343,000). Ordinary profit and net profit also saw steep declines of 76.4% and 92.3%, respectively.

The Games & Entertainment segment, which includes hyper-casual games, reported a 13.5% year-on-year decrease in sales to ¥4.4 billion (US$30 million), despite the launch of two new titles. This segment’s performance was hindered by a slowdown in the growth rate of mobile game downloads, which fell 14.6% to 149.7 million.

On a positive note, Kayac’s eSports division saw a 25% increase in sales, driven by a significant rise in the number of tournaments held. However, this was not enough to offset the broader declines across other segments.

Despite the challenging quarter, Kayac has maintained its full-year forecast, projecting a 14.5% increase in sales to ¥20 billion (US$137 million). However, operating and net profits are expected to see slight declines.

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