Investors

We would like to express our heartfelt sympathy to the victims of the 2024 Noto Peninsula Earthquake and sincerely pray for the earliest possible recovery and reconstruction of the affected areas.
During the first three quarters of the fiscal year under review, the Japanese economy was generally stable due to a recovery in exports despite signs of a policy shift toward monetary easing and concerns about soaring energy prices. In addition to the shift of COVID-19 to “Category V” and the increase in consumer spending accompanied by hands-on experiences and behavior, the combination of extraordinary recovery in the number of foreign tourists visiting Japan has contributed to the economic environment, partly due to the depreciation of the yen. On the other hand, there are concerns about downside risks to the global economy due to geopolitical shocks such as the escalation of armed conflicts between Hamas and Israel, the stagnation of logistics caused by the attack on vessels in the Red Sea, and the prolonged Russian invasion of Ukraine.

Against this backdrop of economic conditions, our Group is working to further strengthen our multi-faceted content business with strong characters, aiming to make a leap forward as a global content company with an eye on the world. Many fans from around the world visit the official shops of Tsuburaya Productions Co., Ltd. (hereinafter, “TPC”) in search of “Ultraman goods” sold only in Japan. The release of the movie SHIN ULTRAMAN contributed greatly to sales by expanding popularity across generations, regions, and ethnicities, and by further expanding domestic and overseas events and collaborative merchandise with other companies. By cultivating the appeal of characters to develop content and digital business, we are making a smooth start to realize our shared group philosophy of “The Greatest Leisure for All People.”

Consolidated financial results for the first three quarters under review were net sales 123,206 million (up 37.5% YoY), operating profit 12,320 million (up 30.0% YoY), ordinary profit 13,456 million (up 38.0% YoY), and profit attributable to owners of parent 9,532 million (up 68.8% YoY).

The overview of each segment is as follows.

Content and digital business segment
During the first three quarters of the fiscal year under review, net sales increased 7.5% YoY.
The success of SHIN ULTRAMAN, a movie released in May 2022, has led to the expansion of new fans and contributed to the expansion of fans to three generations of parents and children. In July 2023, we launched a TV program called ULTRAMAN BLAZAR in six countries and regions around the world. The TV program also offers simultaneous distribution of subtitled and dubbed versions in 13 languages on YouTube. This has helped us to win new Ultraman fans worldwide. This led to the viewing of traditional video products. As a consequence, this has led to the sales of official goods and the expansion of licensing merchandise with other companies, thereby further stimulating the appetite for purchasing.
As a result of increased recognition and favorability of video products, four theme parks in China have established Ultraman areas with permanent stages, which serves as a trigger for the expansion of fans. In addition, both domestic and overseas events were actively held to attract as many visitors as possible. As a consequence, sales in the visual and event business increased, and sales of Ultraman goods in merchandise category, which was expanded in line with the expansion of the fan base, were also strong.
Currently, card games are popular in China. In order to broaden the fan base of card games to a wider range of age groups and expand globally, we announced that this summer we will start selling trading card games with a strong gaming element with an eye to its potential for world tournament. Along with this movement, there were also movements in inventory adjustments in the card games currently being sold.
In addition, Ultraman: Rising, a feature CG animated film jointly produced with Netflix, is scheduled to be distributed worldwide this year. We are preparing to develop a variety of merchandise tailored to each product with our partner companies.

* The “toys” category excludes “block toys” and “card games.”

Digital Frontier Co., Ltd., which possesses cutting-edge CG video production technology, is pursuing initiatives in new fields that utilize digital human technology, an elaborately created 3DCG model that cannot be distinguished from actual images created, in addition to steady orders for Netflix, large-scale anime movies and game projects. In January, 3DCG model of Sakamoto Ryoma, replicated by the company, was used in the TV CM of Yakult 1000, merchandise of Yakult Honsha Co., Ltd. The technology is expected to be used in various categories in the future, including CM videos and movies.

As a consequence, the contents and digital business segment recorded a 7.5% YoY increase in net sales of ¥11,466 million for the first three quarters of the fiscal year under review, and operating profit decreased 21.2% to ¥3,000 million as a result of aggressive investments for future growth.

PS business segment
In pachinko/pachislot (hereinafter, “PS”) industry during the first three quarters of the fiscal year under review, the pachislot market continued to be favorable due to the continued introduction of hit title in smart pachislot machines, and the market continued to be in good condition. Along with this, sales of pachinko parlors have also recovered steadily.
Meanwhile, in the pachinko market, performance was somewhat sluggish compared to the pachislot market, as several hit title have appeared in smart pachinko machines, but the shift to smart machines in earnest has not been achieved and there are few new titles that will drive operations. In this environment, Pachinko EVANGELION:3.0+1.0 (sales volume: 61,000 units), which was launched in December 2023, has been well received. Together with NEON GENESIS EVANGELION -Roar for tomorrow-, which was sold in December 2021, the Evangelion series has the largest operating share and installed share (as of the end of December 2023), and it has grown into a series that is loved by users.
We expect to acquire and expand further fans by continuing to develop products that draw out the appeal of our own characters.

Sales results for the third quarter are shown in the table below.

[PS machine unit sales in PS business segment]

[Major sales titles up to the third quarter of the fiscal year ending March 31, 2024]

[PS business segment unit sales] (Unit: machine)

Consequently, PS business segment posted consolidated results for the first three quarters of the fiscal year under review of net sales ¥110,952 million, up 42.9% YoY, and operating profit ¥10,978 million, up 81.1% YoY.

In the fourth quarter of the fiscal year under review, the Company began sales of four pachinko title and one pachislot title, including pre-existing series machines. We are also advancing our additional orders in response to the strong operation of Pachinko EVANGELION:3.0+1.0.

Other business
In other business, results for the first three quarters under review were 1,204 million for net sales and 17 million for operating profit.

(2) Consolidated earnings forecasts

At this time, there are no changes to the consolidated earnings forecasts for the year ended March 31, 2024 from the contents announced on May 15, 2023.

(Note 1) Figures in this summary report are based on published figures for each company and organization or our estimates.
(Note 2) Product names in this report are trademarks or registered trademarks of each company.

(3) Overview of financial position