Business Strategies

Business Outline

Business Outline
Business Outline

Business Plan

In addition to Pachislot and Pachinko Machines which consist of pachislot and pachinko machines, the Group is engaged in a diverse array of entertainment businesses such as the Entertainment Contents Business which consists of the field of digital game software for smartphones and online PC games, the packaged game software field including home video game software, amusement machines, amusement center operations as well as the toy and animation fields. Our goal is to have strong competitiveness in these fields as our core businesses. Additionally, we are aiming to make a full-fledged entry into the integrated resort facility business and will make active efforts to make the Resort Business, which involves development and management of theme parks and resort facilities, a new core business.

(JPY Billion)

  FY Ended March 2019 FY Ending March 2020
Net sales Overall 331.6 390.0
  Pachislot and Pachinko Machines 101.4 120.0
  Entertainment Contents 219.6 259.0
  Resort 10.5 11.0
Operating income Overall 13.0 27.0
  Pachislot and Pachinko Machines 13.4 29.0
  Entertainment Contents 9.8 11.0
  Resort -2.4 -4.0
  Eliminations -7.8 -9.0
Operating income to net sales 3.9% 6.9%

Business Plan by Segment

1.Pachislot and Pachinko Machines Business

Issues to be Addressed

In the pachislot and pachinko industry, amidst the significant reforms in the regulation environment and market environment, while the number of pachinko parlors is on a declining trend, the trend of larger pachinko parlors is progressing and the number of machines in each parlor is increasing. On the other hand, the number of titles supplied for the No. 6-type machine continued to be sluggish, because the rate of pachislot machines that have been verified to be compatible through prototype testing, which was conducted by Hotsukyo. Under these circumstances, in the Pachislot and Pachinko Machines Business, it is necessary for the Group to develop and supply products with innovative gameplay that meet market needs and comply with regulations to maintain and expand market share. In addition, the need to improve profitability by increasing efficiency in areas such as development and by reducing costs through such means as the reuse of pachislot and pachinko machine parts is considered as a management issue.

【Forecasts】

Overall
    • Plan to increase sales and profit

Pachislot
    • Sell machines centered on new reg. as increase of demands expected from replacement of previous reg. machines.

Pachinko
    • Sell machines centered on new reg. and plan to sell units at same level with previous FY.
      Expect significant increase of profit with measures to recover operating income margin such as reuse, etc.

2.Entertainment Contents Business

Issues to be Addressed

Regarding the environment of the Entertainment Contents Business, in the field of digital game software, the competitive environment is further intensifying, with titles that capitalize on powerful IPs (Intellectual Properties), in addition to being high-quality products, take up the top spots in sales rankings. With regard to the packaged game software market, in the market for hardware of home video game consoles, expectations are rising, mainly in North America and Europe, for the expansion of the game software sales market due to the growing penetration of current-generation video game console hardware. In addition, game distribution platforms such as Steam are expanding in the PC games market. Under these circumstances, in the Entertainment Contents Business, concentrating management resources in fields that are expected to expand, and further enhancing IP development for a wide range of regions, devices and platforms, is considered a management issue.

【Forecasts】

Overall
    • Expect the recovery of profits with the optimization of number of games to develop/operate.

Digital Games
    • Running costs will decrease due to recording of loss in the FY ended March 2019. 

    • Transfer resources to profitable areas.

    • Number of new titles to be launched
      Plan for FY ending March 2020: 6 titles

Packaged Games
    • Expect significant increase of sales due to the launch of several large new titles of existing IP.

    • Expect decrease of profits due to large R&D cost and advertising expenses associated with the launch of new titles and expected decrease of repeat sales.

Amusement Machine Sales
    • Plan to launch new series of mainstay title “StarHorse4” in addition to prize machines which sales has been performing well.

    • Expect decrease in profit due to increase of common fixed expenses from relocation of headquarter.

Amusement Center Operations
    • Expect profit will be leveling off due to consumption tax hike while sales increase with opening of new stores.

Animation / Toys
    • Expect profit will be leveling off due to increase in ratio of revenue from video creation while sales increase from launch of new video in animation area and new products in toy area.

3.Resort Business

Issues to be Addressed

With regard to Resort Business, through the development and operation of resort facilities in Japan as well as integrated resorts overseas, while preparing for a full-fledged integrated resort business in the future, it is an important management issue of the Group to accumulate expertise.

【Forecasts】

Overall
    • Continue efforts to improve profitability of existing facilities.

    • Expect the increase of prior investment as the actions required for participating domestic Integrated Resort will be activated.

PHOENIX RESORT
    • Continuously implement various promotion activities to improve profitability.

    • Implement measures to boost the use of golf and MICE.

 

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