Japanese game publisher Drecom recently shared its financial outcomes for the first quarter of the fiscal year concluding March 2027. According to Game Biz, despite a dip in revenue following the sale of two of its subsidiaries, Drecom has managed to return to profitability, posting an operating profit of 522 million yen (versus an operating loss of 81 million yen during the same timeframe in the previous fiscal year). A key driver behind the company’s financial turnaround is the robust performance of its live-service game Wizardry Variants Daphne.
“Conventional mobile games often experience declining revenue after a year, but Wizardry Variants Daphne continues to expand, even outperforming its results from the prior year,” Drecom president Yuki Naito remarked. With the introduction of the Final Fantasy XI collaboration event in the second quarter of the fiscal year, the company plans to invest in diverse promotional efforts, alongside endeavors to amplify the Wizardry intellectual property’s value by 10 billion yen through an integrated media approach.
Another significant contributor to Drecom’s improved profit margins is the rising use of third-party “out-of-app” payment solutions for in-game purchases. In recent times, Google and Apple have faced criticism over their substantial transaction fees, prompting responses from the Japanese government, which enacted its Act on Promotion of Competition for Specified Smartphone Software as early as 2024. The two tech giants currently take up to 30% of earnings from in-app purchases, a considerable portion of developers’ revenues. To mitigate these costs and ensure greater revenue retention for developers, numerous video game firms, including major players, have begun adopting “out-of-app” payment alternatives for their microtransactions.
Drecom reports that it has observed a rise in transactions processed outside of Apple’s and Google’s ecosystems, resulting in lower payment processing expenses and aiding its profit margin recovery. However, the company clarifies that while other game developers achieve adoption rates around 50%, it has yet to reach a similar level.
Related: “We’re still at the bottom of the dungeon.” Wizardry Variants Daphne’s success has exceeded all of Drecom’s expectations, but development became just as demanding