Building and Managing a “Developing Business Model” Strategy

Our medium-to-long-term tasks are to establish relationships with companies that have expertise and to secure personnel not only in the pachinko and pachislot field, where we have strength, but in diverse entertainment fields. In 2012, we announced our intellectual property-centered “Developing Business Model” strategy, which is based on building networks, expanding and improving the capabilities of subsidiaries and affiliates, and securing personnel. Since then, we have been collaborating with partner companies to create new intellectual properties and cultivating the resulting intellectual properties.

Fields’ business model heightens intellectual properties’ value through cross-media rollouts. This does not simply mean rolling out intellectual properties across multiple media to increase their value. Instead, we establish an intellectual property’s world and draw on diverse media to accentuate its appeal-animating or merchandising the intellectual property strategically.

One example of this approach is the intellectual property GINGA KIKOTAI: Majestic Prince. We built up this intellectual property’s world by simultaneously releasing 2 stories, one in comic form and the other as an anime. Subsequently, we rolled out a social game based on shooting scenes that are one of the anime’s highlights, thereby adding further value to the intellectual property. Our next strategic rollout of the intellectual property is already in the pipeline.

Identifying Tasks through the New Business Model

History shows that most systems that are reliant on media ultimately become obsolete if they do not keep up with change. Rather than treating intellectual properties as a way of adding interest to games or pachinko and pachislot machines, our business model exploits a range of media to heighten the appeal of intellectual properties. However, when frontline creative operations become involved with media, there is a tendency to give priority to media over intellectual properties. Currently, intellectual properties are bridging the fields of our organization, such as the pachinko and pachislot field and the games field, that have different roots and cultures. Merging these roots and cultures that have developed in a vertically divided organization requires a little more time.

For example, when we released the above-mentioned GINGA KIKOTAI: Majestic Prince as a social game, we focused on shooting elements. However, from the viewpoint of an anime, shooting elements are just several frames of a scene. In other words, rather than just creating an exciting shooting game, we have to communicate the intellectual property’s appeal. Thus, progressing from past initiatives that used intellectual properties’ appeal to heighten the media’s competitiveness toward initiatives that leverage media to maximize intellectual properties’ value is our mission and an urgent task.

Creating an Organization and a Culture Befitting an Intellectual Property-Centered Business Model

With above-mentioned tasks and other tasks in mind, we are reforming our corporate culture.

First, we will hire and cultivate personnel who think like intellectual property producers and therefore always give priority to intellectual properties. Such intellectual property producers promise to bring together talented personnel from different fields to advance all stages in the development of intellectual property, from creation through to value maximization. Establishing an organization that intellectual property producers lead will enable integrated cost management of processes from acquiring, owning, and creating intellectual properties through to cultivating and commercializing them. Such an organization will give an overview that helps us see where we are generating cash flows and decide the fields toward which we should channel these cash flows. Moreover, this organization will be able to adapt flexibly to media format changes.

Next, we have established a system in which directors manage and oversee the business model as a whole, while corporate officers control business divisions. Under the “Developing Business Model”strategy, we need to have an overview of the entire business modeland cultivate intellectual properties. Having created the necessary systems and cemented foundations, we recently established an organization that elevates directors, who until now have controlled business divisions, to a higher echelon. Meanwhile, we have deployed to business divisions new leaders, who will redouble efforts to advance toward our target business model.

By increasing the number of intellectual property producers and circulating multiple high-quality intellectual properties across various media based on the “Developing Business Model” strategy, we will reduce risk and increase earning power structurally.

Advancing Business Strategies in the Fiscal Year Ending March 31, 2015

In the fiscal year ending March 31, 2015, based on the foundations laid, we will advance our business model even more vigorously by concentrating efforts on 3 measures.

First, we aim to create a greater number of appealing intellectual properties-the heart of our business model. To this end, we will reinforce the comics field, which is the main source of characters and stories. More rapidly than ever, we will take a range of steps. As part of this drive, in the first quarter of the fiscal year ending March 31, 2015, we launched 5 new works in the comic magazine HERO’S Monthly and published 9 volumes of the magazine in comic-book format. Going forward, we will accelerate these efforts even further.

Our second measure involves animations, which is pivotal to cross-media rollouts of the intellectual properties we create. Coinciding with the stepped-up efforts for comics, the possibility of animating several works has emerged. However, these proposals remain at the planning stage. Therefore, how best to realize such seeds will be one of our main focuses.

Last, we will advance “third media” plans. This will involve devising approaches that achieve the mission of intensifying intellectual properties’ appeal through cross-media rollouts while addressing each medium’s issues. These efforts are very significant for our future evolution.

Sending a Message to Shareholders and Other Investors

From a medium-to-long-term perspective, as we advance an intellectual property-centered circulation business model, we appreciate that media formats could very well change. Consequently, we will remain adaptable and avoid preconceptions as we realize our corporate philosophy.

While continuing to take on challenges, we intend to give first priority to securing resources for the payment of dividends to our shareholders. Please look forward to Fields’ future as the Company prepares for dramatic progress and then advances toward its next phase.

As we forge ahead, we would like to ask for the continued support of shareholders, investors, and other stakeholders.