To Our Shareholders

Geographic Expansion

It goes without saying that expanding the geographies in which we offer our products and services is a key challenge. We saw the numbers that “FINAL FANTASY BRAVE EXVIUS” and “KINGDOM HEARTS Union X” were able to generate in the North American market in the fiscal year ended March 2017 as a major achievement. Japan, North America, and China account for more than 70% of the global mobile gaming market. How we go about enhancing our presence in those three major markets is a key question. In particular, we have not been able to attain the achievements we should have been able to thus far in the North American market. However, the success of the aforementioned titles in the fiscal year ended March 2017 gives us hope for future releases. We have multiple title launches scheduled for the fiscal year ending March 2018 and intend to solidify our foothold in the North American market.

It should also be noted that we exhibited at the India Gaming Show 2017 in February 2017. India has significant potential as a gaming market given the country’s striking economic growth and massive youth population. We had previously seen India as one location in our global development network and contracted game asset development and other tasks to local firms there. However, we believe we have now reached the point where we should view India as a consumer market. Our hope is that as telecommunications infrastructure and payment systems rapidly come online, India will take off as a major consumer market for games. Based on that belief, we will continue to expand in India.

Games as a Service, Games as Media

“Games as a Service” is a concept that is often mentioned recently in HD game contexts. Gone are the days in which single-player games were of primary status and multiplayer games secondary. Lately, multiplayer games have taken the lead, and it is standard for games to be designed for long-term play. The terms “multiplayer” and “Games as a Service” themselves have existed for some time, but they are now being used in reference to game designs that place a strong emphasis on longer-term user engagement. We will also endeavor to develop games designed not to be played once after launch but that customers can enjoy more and play longer. In so doing, we will increase customer satisfaction and enhance the lifetime value of the games themselves. Game play streaming has been another major trend in recent years. An increasing number of our customers around the world enjoy not only playing games themselves, but also watching other gamers play them. You do not actually need to play a game yourself to enjoy it. Watching the advanced techniques of professional gamers and the unique broadcasts of game streamers is another way to enjoy games. Watching gaming is growing into a major form of entertainment thanks to considerable advances in the online streaming environment. It is the presence of e-sports spectators that make this meaningful. Once the size of gaming spectatorship grows, gaming itself will gain value as a form of media. This conversion of gaming into a form of media is proceeding rapidly. We also have a great deal of interest in this field and intend to proactively work to turn it into an actual business.

In Closing

In the fiscal year ended March 2017, we set new records for net sales and all our profit lines. However, that achievement is already in the past, and it was merely a mile marker on our way to future growth. The business environment that surrounds us is subject to constant, unending change. We view such changes as opportunities and intend to continue to strive for further growth.

We look forward to your continued support.

Yousuke Matsuda

Yousuke Matsuda
President and Representative Director

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