GMO Internet to stop development, manufacture and sales of cryptocurrency mining machines due to huge losses

Japanese IT giant GMO Internet has announced its plans to stop the development, manufacture, and sales of cryptocurrency mining machines.

The announcement comes in the wake of an “extraordinary loss” in the company’s cryptocurrency mining business for the fourth quarter of the fiscal year ending December 2018.

GMO Internet said that the profitability of its in-house mining business, which was launched in December 2017, has decreased “as the cryptocurrency price declined and our mining share did not increase as expected due to the rise of the global hash rate.” Accordingly, it has decided to record an impairment loss, etc. of approximately JPY 11.5 billion on the consolidated account for the said period.

The company launched the development, manufacture, and sales of mining machines in September 2017. However, it said that with regard to the current mining machine markets, the environment is increasingly competitive as declining crypto prices have led to decreased demand, which in turn leads to the decline in the sales price.

GMO Internet said that it expects that “it is difficult to recover the cryptocurrency-mining-business-related assets through selling mining machines, so the Company has decided to stop the development, manufacture, and sales of mining machines, thereby recording an extraordinary loss.”

Further underlining depreciation cost of mining machines and electricity cost as the majority of operating expenses, the company said that it will relocate the mining center to a region that will allow it to secure cleaner and less expensive power supply.

“GMO Internet will review the revenue structure of its in-house mining business, and continue running mining operations with the GMO Internet as a headquarter,” it added.