Business Strategies

Business Outline

Business Outline
Business Outline

Business Plan

In addition to Pachislot and Pachinko Machines Business which consist of pachislot and pachinko machines, the Group is engaged in a diverse array of entertainment businesses such as Entertainment Contents Business which consists of Consumer area which handles the video game software for smartphones, PCs and home video game console, Amusement Machines Sales area, as well as Animation and Toys area. 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 resort facilities, a new core business.

(JPY Billion)

  FY Ended March 2021 FY Ending March 2022
(announced on May 13)
Net sales Overall 277.7 312.0
  Entertainment Contents 217.8 213.0
  Pachislot and Pachinko Machines 53.1 89.0
  Resort 6.3 9.5
  Other / Elimination 0.5 0.5
Ordinary income Overall 1.7 20.0
  Entertainment Contents 27.9 25.0
  Pachislot and Pachinko Machines -11.3 9.0
  Resort -8.9 -5.0
  Other / Elimination -6.0 -9.0
Ordinary income to net sales 0.6% 6.4%

Business Plan by Segment

 

1.Entertainment Contents Business

Issues to be Addressed

Regarding the environment of the Entertainment Contents Business, in the market of digital games, 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 games market, 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 areas that are expected to expand, and further enhancing IP roll-out for a wide range of regions, devices and platforms, is considered a management issue.

【FY2021/3 Results】

Overall
    • Significant increase in profit YoY due to the contribution of Consumer area.

    • Amusement Center Operations area was excluded from consolidation from 4Q due to the transfer of shares of the group company engaged in amusement facilities operation.

Consumer area
    • (Full Game) Significant increase in repeat sales due to the effect of stay-at-home spending etc.

    • (F2P) Strong performance of new titles and steady performance of existing titles.

Amusement Machine Sales area
    • Revenue from rev. sharing model and machine sales decreased due to the closure of stores and declined store utilization due to the impact of COVID-19.

    • Steady performance of regular products such as prize category and content update of mainstay titles.

Amusement Center Operations area
    • Temporary closed the stores sequentially from April to May.

    • Transferred the shares of a group company engaged in amusement facilities operation associated with the structural reform. (Excluded from consolidation from 4Q)

Animation / Toys area
    • (Animation) Delayed release of the theatrical version of "Detective Conan The Scarlet Bullet“.

    • (Toys) Steady performance centered on educational toys.

【FY2022/3 Forecast】

Overall
    • Consumer area expects the decline due to the reactionary fall of repeat sales.

    • Operating expenses such as R&D and advertising expenses associated with the increase in new titles will increase.

    • Amusement Machine Sales area expects the improvement in earnings due to the reduction of fixed expenses associated with the structural reform.

    • Schedule to record allocated revenues of the Sonic movie.

Consumer area
    • (Full Game) Expecting the reactionary fall following the effect of stay-at-home spending in repeat sales and an increase in expenses associated with the increase in new titles.

    • (F2P) Launch of new "PHANTASY STAR ONLINE 2" series is scheduled .

Amusement Machine Sales area
    • Earnings improve due to the reduction of fixed expenses associated with the execution of structural reform.

    • Plan to launch regular products such as UFO Catcher series machines and prizes for UFO CATCHER, as well as new products.

Animation / Toys area
    • (Animation) Release the theatrical version of “Detective Conan The Scarlet Bullet” and expect to record revenues from animation production and distribution, etc.

    • (Toys) Plan to sell new products and regular products.

2.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 halls is on a declining trend, the trend of enlargement of pachinko halls is progressing and the number of machines in each hall is increasing. On the other hand, the number of titles supplied for the No. 6 model machine continued to be sluggish, because the approval rate of prototype testing for pachislot machines, which was conducted by Hotsukyo also continued to be low. 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 components for pachislot and pachinko machines is considered as a management issue.

【FY2021/3 Results】

    • Resumed sales activities on a full scale after the second half of the year.

    • Demand for new regulation machines declined due to the extension of deadline for removal of previous regulation machines, resulting in significant decrease of unit sales YoY.

【FY2022/3 Forecast】

    • Expect a recovery of earnings due to launching new titles, including mainstay titles, in preparation for the replacement demand of previous regulation machines, which deadline for removal is arriving.

    • Fixed expenses are expected to decrease due to implementation of structural reform, while advertising expenses etc. are expected to increase due to the increase in numbers of new titles etc.

3.Resort Business

Issues to be Addressed

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

【FY2021/3 Results】

    • PHOENIX RESORT: Significantly affected by COVID-19 and the number of facility users falled to 65.7% YoY.

    • Personal demand increased and utilization of facilities recovered during the “Go To Travel Campaign” period.

【FY2022/3 Forecast】

    • PHOENIX RESORT: Expect the recovery on par with the revenue of FY2020/3 by strengthening the attraction of individual customer.

    • PARADISE SEGASAMMY: Expect the reduction of loss margin (non-operating expenses.)

    • Continue to record expenses for IR (Integrated Resort) business.

 

Related Links

Business Outline

Business Outline
Business Outline

Business Plan

In addition to Pachislot and Pachinko Machines Business which consist of pachislot and pachinko machines, the Group is engaged in a diverse array of entertainment businesses such as Entertainment Contents Business which consists of Consumer area which handles the video game software for smartphones, PCs and home video game console, Amusement Machines Sales area, as well as Animation and Toys area. 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 resort facilities, a new core business.

(JPY Billion)

  FY Ended March 2020 FY Ending March 2021
(announced on Feb 12)
Net sales Overall 366.5 276.0
  Pachislot and Pachinko Machines 108.5 51.5
  Entertainment Contents 247.6 218.0
  Resort 10.4 6.0
Ordinary income Overall 25.2 7.0
  Pachislot and Pachinko Machines 22.7 -12.5
  Entertainment Contents 16.2 36.0
  Resort -5.3 -9.0
  Eliminations -8.4 -7.5
Ordinary income to net sales 6.9% 2.5%

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 halls is on a declining trend, the trend of enlargement of pachinko halls is progressing and the number of machines in each hall is increasing. On the other hand, the number of titles supplied for the No. 6 model machine continued to be sluggish, because the approval rate of prototype testing for pachislot machines, which was conducted by Hotsukyo also continued to be low. 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 components for pachislot and pachinko machines is considered as a management issue.

【Forecasts】

Overall
    • Due to the review of sales schedule, launch of some FY2021/3 titles will be postponed to the next fiscal year, resulting in decrease of number of titles.

    • Expect to record one-off expense due to the review of inventory assets such as components.

 

2.Entertainment Contents Business

Issues to be Addressed

Regarding the environment of the Entertainment Contents Business, in the market of digital games, 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 games market, 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 areas that are expected to expand, and further enhancing IP roll-out for a wide range of regions, devices and platforms, is considered a management issue.

【Forecasts】

Overall
    • Continue to expect strong performance in Consumer area. Also areas other than Consumer area also improving.

    • Amusement Center Operations area is excluded from consolidation from 4Q.

Consumer area
    • (Full Game) New titles will be launched, and expect to maintain strong repeat sales.

    • (F2P) New titles are expected to perform steadily. For existing titles, expect the transfer of operation and decay of some titles.

Amusement Machine Sales area
    • Mainly sell regular products such as UFO CATCHER series machines and prizes for UFO CATCHER.

Amusement Center Operations area
    • Profit and losses will be insignificant due to the transfer of the shares of the company engaged in amusement facilities operation.

Animation / Toys area
    • (Animation) Record revenues from animation production and distribution, etc.

    • (Toys) Sell regular products, etc.

3.Resort Business

Issues to be Addressed

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

【Forecasts】

Overall
    • Expenses for domestic IR expect to decrease from initial assumption.

    • PHOENIX RESORT: Decline of travel demand is expected due to temporary suspension of “Go To Travel Campaign” nationwide, and declaration of state of emergency.

    • Expect to record losses in PARADISE SEGASAMMY (non-operating expenses).

PARADISE SEGASAMMY
    • Expecting that the restriction of foreign visitors in each country will continue.

    • Expect to record losses due to a decrease in utilization of facilities.

 

Related Links

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