Changes in Major Management Indicators, etc.

Summary of Results by Segment

Game Segment

In the gaming business, the newly released in-house distribution title "Wizardry Variants Daphne," launched in the third quarter, performed well and contributed to earnings during this period. Additionally, we released the location-based game "Disney STEP" in the fourth quarter. The number of mobile game titles currently in operation stands at 11, with revenue generated from multiple long-running titles. However, the newly released title from the first quarter fell short of sales expectations, leading to the decision to discontinue its operation.
Regarding PC and console titles under development, a reassessment of future revenue was conducted due to changes in project guidelines, and recovery potential for the invested amount was calculated. As a result, impairment processing was implemented for a portion of assets related to the titles currently under development.

In terms of sales revenue, while some operational titles recorded lower performance compared to the previous period, the contribution of newly launched titles in the third quarter led to an increase compared to the prior fiscal year.
Profits, however, declined year-on-year despite the contribution from new titles, mainly due to weaker performance of operational titles, as well as the underperformance of newly self-published titles released in the first quarter.

As a result, the segment recorded sales revenue of ¥11,924,240 thousand (a 27.5% increase compared to the previous period) and segment profit of ¥976,374 thousand (a 48.5% decrease compared to the previous period).
In this core segment, efforts will continue to focus on maintaining stable earnings from existing titles, maximizing revenue and profit from new operational titles, acquiring business expertise through the development of new PC and console titles, and aiming to hold proprietary intellectual properties.

Content Segment

In the content business, the company engages in publishing and film projects aimed at owning, developing, and monetizing intellectual property (IP). Monthly publications are carried out through the light novel label "DRE Novels" and the comic label "DRE Comics." Additionally, using the company's expertise in internet services and advanced technologies, the company is developing new businesses in the Web3 domain and providing fan marketing support services such as "Rooot" and "Fanflu," leveraging social media platforms.

Regarding revenue, in addition to "DRE Novels," the company began publishing titles under "DRE Comics" in the fall of 2023. This led to an increase in revenue compared to the previous fiscal year, supported by the launch of several popular series that have exceeded a cumulative total of 200,000 copies in circulation.

With respect to profits, while upfront investments continue across new business areas such as publishing, film, and Web3, the aforementioned revenue increase has contributed to a reduction in the loss compared to the previous fiscal year.

As a result, segment revenue was 778,959 thousand yen (an 81.2% increase from the previous fiscal year), and segment loss amounted to 864,366 thousand yen (compared to a segment loss of 993,611 thousand yen in the previous fiscal year).
In the content segment, the company is focused on increasing sales by expanding the number of published works and reducing loss amounts. Additionally, it will continue investing toward achieving its medium-term objectives.