FINANCE HIGHLIGHTS
Changes in Major Management Indicators, etc.
Summary of Results by Segment
Game Segment
In the game business, we have generated revenue from our self-published title 'Wizardry Variants Daphne,' which was released in October 2024, as well as from several other titles currently in operation.
On the other hand, as net sales of the mobile game title released at the end of the previous fiscal year fell short of expectations, we re-evaluated future earnings and assessed the recoverability of the investment. As a result, we recognized impairment losses on assets related to the game application in the first quarter. In addition, for packaged PC and console game titles, based on past business performance, we conservatively revised the profitability outlook and recognized impairment losses on assets of titles under development recorded as software in progress.
Regarding net sales, although some operating titles performed below the previous fiscal year, net sales increased year on year due to the strong performance of 'Wizardry Variants Daphne,' which celebrated its first anniversary after its release in October 2024.
Regarding profit, although there were increases in commission expenses associated with higher sales of our self-published titles, as well as increases in amortization of software and advertising expenses due to the release of new titles, profit increased year on year due to the revenue growth from new titles.
As a result, segment net sales were 16,796,577 thousand yen (up 40.9% YoY), and segment profit was 1,277,100 thousand yen (up 30.8% YoY).
Content Segment
In the content business, while engaging in the publishing, animation, and merchandising businesses with the aim of creating, nurturing, and monetizing IP, we publish new titles every month under the light novel label "DRE Novels" and the comic label "DRE Comics." In addition, we are developing new services utilizing our expertise in internet services and advanced technologies.
Regarding net sales, the publication of "DRE Comics" began in autumn 2023, resulting in increased revenue mainly from digital comics. This was due to the release of several popular titles, each with cumulative sales exceeding 400,000 copies, leading to an increase compared to the previous fiscal year.
Regarding profit, as we are making investments in new business areas such as publishing, animation, MD, and the utilization of AI, and with upfront costs continuing, including the recruitment of IP production personnel, the segment loss increased compared to the previous fiscal year.
As a result, segment net sales were 852,977 thousand yen (up 9.5% YoY), and segment loss was 868,382 thousand yen (compared to a segment loss of 864,366 thousand yen in the previous period).
