Company: GCL
Filing Date: 2025-08-27
Form Type: DRS
Source: 0001213900-25-080905
Chunk: 21

Company: GCL Global Holdings Ltd
Filing Date: 2025-08-27
Form: DRS
Chunk 21
---
 game codes, and gaming content that are compatible with major gaming consoles such as
Sony PlayStation, Microsoft Xbox, and personal computers (“PCs”). Our sales and marketing efforts are focused
on both distributing more games and improving the experience of the games we currently distribute (for example, through merchandise and
localized promotional materials). We generate revenue primarily from distribution of video games in Asia from international PC and video
game publishers and studios. We commit to a certain marketing budget to market and promote the games. For games distributed through third-party
platforms such as Steam, we are required to pay the platform providers at a pre-determined rate. These costs are expected to remain a
significant portion of our cost of revenues. In order to remain profitable, we need to generate sufficient revenue from our existing
and new game offerings to offset our ongoing development, sales and marketing and operating costs.

Since the revenue generated
from game distributions accounted for Over 86.8%, 93.3% and 87.9% of our total consolidated revenue for the fiscal years ended March
31, 2025, 2024 and 2023, respectively, the GCL Group’s success depends largely on our ability to sell commercially successful “hit”
game titles or sequels to such “hit” titles. If we experience any delays in product releases or disruptions following the
commercial release of our “hit” titles or their sequels, our operating results will be materially adversely affected. Since
our distribution agreements typically require us to commit to a minimum order quantity per game title, we may even experience a loss
if demand for the games we distribute falls short of our expectations. Although we are currently one of the biggest video game distributors
in Asia, there is no assurance that we can continue to maintain our market leading position in the game distribution industry in Asia
if we fail to meet these minimum purchase commitments in our distribution agreements with game publishers. Our brand will also suffer
if we fail to continue to distribute and publish consistently high quality and well-received game products and services, and as a result,
our revenue and profitability may decline.

The success of our games
depends, in part, on unpredictable and constantly changing factors beyond our control including consumer preferences and spending habits,
competing games and the availability of other entertainment experiences. If the games we distribute do not meet consumer expectations,
or if new games are not brought to market by us in a timely and effective manner, our ability to grow revenue and our financial performance
will be adversely affected.

<div