August 14, 2012 / 10:06 AM / 5 years ago

UPDATE 1-Japan's Gree doubles Q4 op profit on strong ad sales

(Adds executive comment, background)

TOKYO, Aug 14 (Reuters) - Japanese social gaming operator Gree Inc nearly doubled its fourth-quarter operating profit from a year earlier even after suspending games that contained elements of gambling, thanks to strong advertising sales.

Operating profit rose to 19 billion yen ($242.59 million) in April-to-June from 9.8 billion yen a year earlier, but missed the 22.4 billion-yen profit expected by four analysts polled by Thomson Reuters I/B/E/S.

Complete gacha, a game that had charged users around $3 to $4 to turn over virtual cards to claim rare cards or other online rewards, first came under scrutiny by Japan’s Consumer Affairs Agency in May and has since been banned.

“It’s difficult to say how much of an impact the complete gacha problem had on our earnings. What we do think is that this has slowed down our game development,” said Yoshikazu Tanaka, CEO and founder of Gree.

For the year ended June 31, Gree more than doubled its operating profit to 82.7 billion yen. For the current year, Gree expects operating profit to range from 74 billion yen to 84 billion yen.

Rival gaming firm DeNA Co Ltd posted an operating profit of 18.4 billion yen for April-to-June, up 22.4 percent from a year earlier. It logged record revenue of 47.6 billion yen for the quarter.

Shares in Gree inched up 0.1 percent ahead of the results, compared with a 0.5 percent rise in Tokyo’s benchmark Nikkei average. ($1 = 78.3200 Japanese yen) (Reporting by Mari Saito; Editing by Ryan Woo)

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