Company: GCL
Filing Date: 2025-03-17
Form Type: DRS
Source: 0001213900-25-024502
Chunk: 22

Company: GCL Global Holdings Ltd
Filing Date: 2025-03-17
Form: DRS
Chunk 22
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 uncertainties. See the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

Risks Related to the Company’s Business and Industry

Our business will suffer if we are unable to distribute and publish new game titles, “hit” game titles or sequels to such “hit” titles.

Our business depends on distributing
and publishing games that consumers will purchase, download and spend time and money playing. We currently distribute and sell to retailers
and consumers console games, 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 approximately 96.4% and 93.3% of our total consolidated revenue for the six months ended September
30, 2024, and fiscal year ended March 31, 2024, 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