Japanese mobile game developer Kayac Co. reported a sharp decline in profits as its core gaming segment struggled with weaker downloads and underperforming titles.
Operating profit plunged 65% to ¥358 million ($2.4 million) for the year ended December 2023, while revenue dropped 4.2% to ¥16.7 billion. The gaming division, which accounts for more than half of total sales, saw revenue fall 12.5% as mobile game downloads decreased 8.1% year-on-year to 84.9 million.
The Tokyo-based company released four new hyper-casual games in the fourth quarter, including “Kissing Now” and “Draw Block Gladiator,” but these failed to compensate for weak performance earlier in the year. Kayac also announced plans to shut down two long-running titles – “Kinnikuman Muscle Shot” in July 2024 and “Bokura no Koshien! Pocket” in January 2025.
While gaming stumbled, Kayac’s local community platform SMOUT showed promise, reaching 65.2% penetration among Japan’s municipalities. The segment’s revenue jumped 26.1%, though it remains a small portion of overall sales at ¥980 million.
Looking ahead, Kayac projects a 55% rebound in operating profit to ¥550 million for 2024, banking on improved gaming performance and continued growth in its community services. The company recently acquired publishing house Eiji Publishing in February 2024 to diversify its revenue streams.
