4199.T

• Corporate Strategy & Positioning

  • The company's mission is "Bring fun, shared joy to everyday life around the world", focused on delivering casual mobile games that fit into users' daily spare time.
  • Updated corporate vision: "A Japanese-born mobile casual game company that captivates the world's spare time through technology", with a core strategic focus of delivering THE JAPAN IP to global markets.
  • The company positions itself as the go-to development partner that leading Japanese IP holders can trust, leveraging its track record of hit titles, and expertise in casual, global, and long-term game operation. It aims to become a one-of-a-kind player in the government-prioritized IP and game sector.

• Market Context

  • Overseas sales of Japanese content reached 5.7 trillion yen in 2023, making it Japan's second largest industry by size after automotive. The Japanese government targets growing the overall Japanese content industry to 20 trillion yen by 2033, positioning IP and games as a core growing domestic sector.
  • 7 of the top 17 global media franchises are Japanese IP, demonstrating the sustained global competitive advantage of Japanese content. The largest global mobile game market is North America, with a size of 4.18 trillion yen, and the company targets share growth across all major global regional markets.

• New Title Development Updates

  • Two major IP titles have had public information released: 1) "Jump Plus Jumble Rush", developed by Wonder Planet and produced/distributed by Bandai Namco Entertainment, launched on September 24; 2) "HUNTER×HUNTER NEN×SURVIVOR", co-developed with Bushiroad, began pre-registration on December 20 and is scheduled for simultaneous global launch on February 18. The company has also started development on an additional new major IP title, and will continue to prioritize major IP projects for all new development going forward.
  • The company uses an in-house shared development platform called SEED, which is continuously updated, to enable industry-leading low-cost, fast-turnaround, high-quality development and operation of new titles. SEED is leveraged for all new development projects.
  • Current new title development structures prioritize limiting the company's upfront capital expenditure, with a trade-off of slower, more gradual profit growth. This structure allows the company to participate in large-scale projects that would exceed its standalone investment capacity, and leverages the company's long-term operation expertise to build cumulative medium- to long-term revenue opportunities. Future new title investments will be evaluated based on the company's available investment capacity to make rational decisions.

• Operational Efficiency Initiatives

  • The company maintains a 130-person headcount as of the end of 1Q FY2026, and focuses on AI-driven productivity improvements to support larger business scale with the current team.
  • AI is leveraged not only for cost reduction, but also to improve product quality, enabling higher quality game output with the same headcount and cost base. The company has a fully remote-optimized work environment with virtual offices, digital-first workflows, remote work stipends, and flex time, which enables cross-functional company-wide AI adoption. It has rolled out latest AI tools company-wide, rolled out division-specific AI tool integration into core workflows, established company-wide AI guidelines, and is working to create new business value and restructure operations via AI to build competitive advantage.

• Full-year FY2026 guidance: The company maintains its prior expectation of achieving full-year operating profit, even as it continues development investment prioritized for new title results. The full-year numerical earnings forecast remains non-disclosed, and will be released as soon as a reasonable and accurate forecast can be produced.
  • Dividend guidance: The company prioritizes improving retained earnings, so a zero dividend payout is planned for FY2026.
  • Existing title guidance: "Krafi" is expected to see a year-over-year revenue decline due to expected KPI decay, but optimized marketing investment and operation structure will allow it to continue contributing consistent operating profit. Service closure of "Pandoraland" in March 2026 is expected to have a minor impact on full-year results.
• Second quarter FY2026 guidance: While new title development and R&D investment will continue, the heavy concentrated upfront development burden seen in 1Q will moderate. Revenue growth and operating profit growth compared to 1Q is expected:
  • Development and operation revenue for "Jump Plus Jumble Rush" and "HUNTER×HUNTER NEN×SURVIVOR" is expected to see steady growth. "Krafi" is expected to see quarter-over-quarter revenue growth driven by its 10.5th anniversary event. The "Pandoraland" service closure will have minor impact on Q2 results.
  • Operating profit is expected to increase quarter-over-quarter as the upfront development investment burden moderates after 1Q.

The company operates a single mobile game business segment. For the first quarter ended 1Q FY2026: total net sales reached 477 million yen, of which development and operation sales were 379 million yen. The existing title "Krafi" saw a post-10th anniversary event revenue decline. Total company costs for the quarter were 591 million yen, leading to an operating loss of 114 million yen. "Pandoraland" will end service in March 2026, with an expected minor impact on overall results. No separate product segment revenue contribution percentages are provided in the transcript.

• Upfront development investment burden: The 1Q FY2026 results were negatively impacted by concentrated upfront development investment for new titles, and a several tens of millions of yen negative impact to revenue and operating profit from the shift of some expected 1Q development revenue to 2Q.
• Existing title revenue decay: Mature existing titles like "Krafi" face expected long-term KPI and revenue decay.
• New title development and performance uncertainty: There is no guarantee that new major IP titles will achieve commercial success, and the specific business and profit impact of new launches cannot be reliably forecasted at this stage.

Q: For the newly started major IP title development project, does the structure require the company to bear development investment risk, and will revenue share be received from launch? Could you also share if this is a major Japanese IP, if it will have a simultaneous global launch, and what the overall potential of the title is?

A: We are not able to publicly disclose the collaboration partner or IP name at this stage, so we cannot provide specific answers to your questions at this time. We can confirm that this title aligns with our company's vision, strategic positioning, and leverages our core strengths and track record. We will continue development work, and ask investors to look forward to future updates.

Q: For "Jump Plus Jumble Rush", what is your current assessment of performance, what are your future outlooks, and how should we think about its impact on your company's earnings going forward?

A: The title has seen smooth operation and development since its September launch, and new large IP updates and seasonal events have been rolled out since December. Most recently, we added content for Oshi no Ko, which launched its new anime season this month. We will continue to invest in in-game development to drive business growth for the title. We cannot share specific numerical figures for its earnings impact, but we can confirm that performance has been stable (defensive) since launch, which is our current expectation for the title.

Q: For "HUNTER×HUNTER NEN×SURVIVOR", which is scheduled for simultaneous global launch in February, the market has high expectations. Could you share the current global response you are seeing, your future outlook, and the expected earnings impact from the title?

A: HUNTER×HUNTER is an extremely popular IP globally, and this mobile game project is targeting a global hit with the simultaneous February launch. Pre-registration exceeded 100,000 users within days of launching on December 20, and has now exceeded 300,000 users publicly. An additional reward tier has already been set for hitting 600,000 pre-registrations. With just over a month remaining until launch, we will continue to work with our collaboration partner to prepare for a successful post-launch business. We cannot share specific numerical earnings forecasts, but we expect the title to contribute meaningfully to our company's earnings after launch, which we can share as a general expectation.