The Group’s financial results in the second quarter of the fiscal year ending March 31, 2023 (FY2023/3), progressed generally in line with our initial expectations. As the Entertainment Contents Business performed steadily as a whole in line with our forecast and the Pachislot and Pachinko Machines Business achieved strong sales, the Group’s sales were 150.0 billion yen (134.8 billion yen in the same period of the previous fiscal year), ordinary income was 12.3 billion yen (14.7 billion yen in the same period of the previous fiscal year), and profit attributable to owners of the parent was 9.6 billion yen (12.0 billion yen in the same period of the previous fiscal year).

In the Consumer area of the Entertainment Contents Business, while sales of Full Game were slightly lower than expected, sales of F2P progressed strongly centered on “Project SEKAI: Colorful Stage! feat. Hatsune Miku”. In addition, the impact of foreign exchange rates boosted by the weak yen also contributed to the overall solid progress. In the Pachislot and Pachinko Machines Business, sales of pachislot machines (No. 6.5 models), especially “Pachislot Kabaneri of the Iron Fortress”, were strong, and all other titles sold also exceeded the plans, resulting in sales of 34,712 pachislot units and 23,960 pachinko units. The Resort Business also posted a significant year-on-year increase in sales and a narrowing of loss margin due to the relaxation of behavioral restrictions associated with COVID-19.

In the second half of FY2023/3, the Entertainment Content Business will proceed to launch new titles, including our flagship IPs; in addition to “Sonic Frontiers” released on November 8, remastered and remade titles, etc. of such as “Persona” and “Ryu ga Gotoku” series will be introduced. These new titles will be released simultaneously around the world for multiple platforms. The “Sonic the Hedgehog” series has recently been developed in a variety of media mixes, and the second movie, “Sonic the Hedgehog 2”, which was sequentially released from March 2022, has surpassed $400 million at the box office, setting a new record for a game IP. In addition, a new animated series “Sonic Prime” is scheduled to air on Netflix on December 15, 2022, and is expected to attract a new fan base thanks to the success of the movie. “Sonic Frontiers”, which was launched under this environment, is the first completely new Sonic game in five years, and we are planning a variety of promotional measures to attract not only existing fans but also new users. The first step will be to implement measures to expand sales for the holiday season. Although the current market is showing some signs of slowing down due to changes in consumer behavior resulting from the normalization of socioeconomic activities, the game market is expected to continue to grow on a global scale in the future. We will continue to strengthen the global branding of existing IPs and strive to expand profitable opportunities for the Entertainment Content Business.

In the Pachislot and Pachinko Machines Business, we will accelerate the launch of major new titles in the second half of FY2023/3. We will continue to expand our pachislot machine lineup of No 6.5 models, which are performing well, and we also plan to launch multiple new pachinko machines. In addition, smart pachislot machines began to be introduced to the market in November. Smart pachislot machines are attracting a great deal of interest from users and hall operators, and we expect the introduction will lead to further revitalization of the market. Although there are some factors that require continued attention, such as the declining approval rate of prototype testing and procurement of parts, the medium-term market forecast is becoming very positive. Therefore, we will take all possible measures to meet the growing demand.