Japanese game publisher Drecom recently announced its financial results for the first quarter of the fiscal year ending March 2027. As reported by Game Biz, despite the decline in revenue due to the sale of two of its subsidiaries, Drecom has managed to bounce back to being profitable, with an operating profit of 522 million yen (compared to an operating loss of 81 million yen for the same period last fiscal year). One major factor behind the company’s profitability is the strong performance of their live-service title Wizardry Variants Daphne.
“Typical mobile games tend to see a decreasing trend in revenue once a year passes, but Wizardry Variants Daphne is continuing to grow, while showing better results compared to that of the previous year,” Drecom president Yuki Naito commented. With the launch of the Final Fantasy XI collaboration event in the second quarter of the fiscal year, the company will be investing in various promotion initiatives, as well as making efforts to expand the value of the Wizardry IP by 10 billion yen through a mixed media strategy.
As another big factor behind its improvement in profit margins, Drecom cites the growing adoption of third-party “out-of-app” payment methods for microtransactions. In recent years, Google and Apple have been charging notoriously high transaction fees for their services, even prompting reactions from the Japanese government, which passed its Act on Promotion of Competition for Specified Smartphone Software back in 2024. Currently, the two platforms charge up to 30% of revenue made through in-app purchases, which is a big chunk of developers’ proceeds. To bypass these fees and ensure more money trickles down to the developers, video game companies, including some industry giants, have been introducing “out-of-app” payment options for their microtransactions.
Drecom says that it’s also been witnessing an increase in payments processed outside of Apple or Google, leading to a decrease in payment processing fees, and thus contributing to the improvement of its profit margins. However, the company explains that, while other game developers report adoption rates of around 50%, it still hasn’t reached a comparable 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
