Outline of Results Briefing held on November 6, 2012

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Thank you. I am Yoichi Wada, President and Representative Director. I would like to briefly go over the current status and outlook of our businesses.

This slide shows operating income by business segment for the past four fiscal years. March 2010 was marked by record highs, which fell in March 2011 and 2012. Figures dropped as low as approximately ¥7 billion in March 2011, and rose to approximately ¥10 billion in March 2012. Initially, our plan was to increase the earnings to ¥15 billion, our normal level, for this fiscal year.

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However, we have decided to make downward revisions to our forecast of operating income for the fiscal year ending March 31, 2013, from ¥15 billion to ¥7.5 billion.
The initial operating income forecast for the First Six-Month Period was ¥0, however, resulting in operating loss of approximately ¥5 billion. Reflecting this loss in the forecasts for the full fiscal year ending March 31, 2013, we revised operating income forecast from ¥15 billion to ¥7.5 billion.

This ¥5 billion decline from the First Six-Month Period is roughly divided into ¥2.5 billion in Digital Entertainment and ¥2.5 billion in Amusement. We normally do not disclose breakdown numbers for Digital Entertainment, however, for your reference, I will briefly explain the rundown of the difference between the forecast and actual amount of ¥5 billion.

The Digital Entertainment segment is divided into three sectors: HD Games, MMO, and Social Gaming & Others.
MMO results were as projected. HD Games, however, fell ¥1.5 billion short of the target for two main reasons.
First, sales of game titles in Europe and North America tend to increase steadily over a prolonged period after launch. We expected greater earnings in the First Six-Month Period, however, resulted ¥1 billion short of our initial target.
The second reason: Europe and North America, but more notably the US, utilize a system called price protection to encourage the elimination of channel inventory, a business practice not common in Japan. ¥500 million was incurred to cover this cost.
Adding these up, HD Games as a whole fell ¥1.5 billion below our original forecast.

Next, Social Gaming & Others showed steady growth. We had anticipated this segment to show much stronger performance in the First Six-month Period, however, where it resulted in ¥1 billion short of our initial projection.
Putting these figures together, HD Games was ¥1.5 billion short, and Social Gaming & Others fell by ¥1 billion against initial profit plans.

Going on to the Amusement segment. We planned to introduce large arcade game machines in the First Six-Month Period (profits to be collected in the second six-month period ending March 31, 2013 and beyond), however, we had a slight stumble in the launch, which resulted in a ¥2.5 billion shortfall against our initial profit plans.

These add up as the ¥5 billion shortfall for the First Six-Month Period. We have a bearish outlook for each segment towards the second six-month period ending March 31, 2013, and we have thus revised our operating income forecast for the full fiscal year from ¥15 billion to ¥7.5 billion.

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