Unaffected yet by kompu gacha ban, DeNA revenues climb to new record, hitting $609 million in Q1 2012

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By Kathleen De Vere Comment

So far Japanese mobile-social gaming giant DeNA seems to have emerged largely unscathed from the ban on the kompu gacha monetization mechanic, reporting its highest ever quarterly revenues for Q1 2012. Sales climbed to 47.6 billon yen ($609 million) during the quarter ending June 30, 2012 — up 37 percent year-over-year and 11 percent quarter-over-quarter.

Operating profit climbed 5 percent quarter-over-quarter and 22 percent year-over-year to 18.4 billion yen ($235 million), while net income rose six percent quarter-over-quarter to 10 billion yen ($127.1 million).  DeNA’s social media business — which includes its gaming division and the Mobage gaming network — accounted for 41.5 billion yen ($527.4 million), 87.2 percent of the company’s total sales for the quarter. Mobage Japan now has 43.07 million users, up from the 39 million users the company reported last quarter.

Although the company’s operating profit margin declined slightly quarter-over-quarter, falling from 41 percent to 38.6 percent, Moba-coin consumption was up quarter-over-quarter. 44 percent of all Moba-coins purchased were consumed on smartphones during July, up slightly from the 40 percent average the company reported for Q4 2011.

Unlike the most recent earnings reports from CyberAgent or Konami, the elimination of kompu gacha — a monetization mechanic that heavily incentivized the purchase of randomly generated virtual goods — from DeNA’s stable of mobile-social games didn’t seem to have much of an impact on the company’s earnings. That’s extremely good news for DeNA, considering it declined to include a performance forecast for Q1 2012 with its last earnings report, stating it was unable to determine the impact the ban would have on its business.

However, it’s important to note this quarter was one of transition for DeNA. The company only stopped using kompu gacha mechanics in its first and second party games at the end of May, while third-party games continued to use the mechanic until the end of June. DeNA phased out all “kompu gacha-like” monetization mechanics in its first and second-party titles on June 22, with third-party games eliminating them by the end of June. DeNA is also making the odds of receiving virtual goods clear through in-game displays, a process that will be implemented across the company’s first, second and third party games by the end of August.

What all this means is that while DeNA still reported record sales for Q1 2012, Q2 will be the true indicator of how its business can do without some very lucrative monetization mechanics.

DeNA is forecasting Moba-coin consumption will reach 55 billion in Q2, a modest 1.6 percent increase over Q1’s sales. For the first half of 2012, DeNA is estimating it will see 97.1 billion yen ($1.23 billion) in revenue, good for 37.9 billion yen ($481.7 million) in operating profit and 21.4 billion yen ($271.9 million) in net income.

The company’s shares were up 0.17 percent today, and are currently trading at 1,810 yen, but are still down almost 50 percent from their one year high value of 4,084 yen.

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