Japanese entertainment company Marvelous Inc. reported a steep decline in quarterly earnings as game release delays and rising costs hammered its bottom line.
Net income plummeted 93% to ¥78 million ($520,000) in the fiscal second quarter, while revenue fell 8% to ¥12.9 billion. The Tokyo-based company cited a lack of major consumer game releases both domestically and internationally for the weak performance.
The digital contents division, Marvelous’s largest segment, saw sales drop 22% amid the gaming drought. Meanwhile, higher research and development spending of ¥650 million and arcade machine replacement costs weighed on profitability across divisions.
Currency headwinds added to the company’s woes, with the stronger yen resulting in a ¥360 million foreign exchange loss on overseas deposits.
Despite maintaining its full-year guidance, Marvelous projects net income to decline as much as 33% to between ¥1 billion and ¥1.4 billion for fiscal 2025. The forecast suggests continued pressure on margins as development costs remain elevated.
