FIELDS CORPORATION held a financial presentation for the third quarter of the fiscal year ending March 31, 2015 in OTEMACHI 1st SQUARE CONFERENCE (Chiyoda-ku, Tokyo) on February 4, 2015 (Wednesday) at 11:30 am.
This page provides an overview of our explanation (summary) at the financial presentation.
Overview of the Nine Months Ended December 31, 2014 (the third quarter under review)
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In the third quarter under review, net sales totaled 29.3 billion yen and we posted an ordinary loss of 5.6 billion yen.
In pachinko/pachislot machine sales, sales for “CR EVANGELION 9” (about 100,000 machines sold) and “Salaryman Kintaro” (about 40,000 machines sold), which have already been launched, will be posted in the fourth quarter. Earnings in the third quarter under review were as noted above.
We expect to achieve our full-year earnings forecasts with the posting of sales for these 2 titles in the fourth quarter, as well as the launch of “Pachislot BERSERK” and “Pachinko Ultra Battle Retsuden,” among others.
We currently have acquired and hold 148 IPs, and plan to develop products and services in 88 media formats in this fiscal year.
1. Summary of Results for Nine Months Ended December 31, 2014 (Consolidated)
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Our consolidated P/L statement for the third quarter under review shows 29.3 billion yen in net sales, a 6.5 billion yen operating loss, a 5.6 billion yen ordinary loss and a net loss of 3.2 billion yen.
Fields sold 118,000 pachinko machines and 35,000 pachislot machines.
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The table shows the consolidated balance sheet.
There are no points particularly worthy of note.
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The table shows the consolidated cash flow.
There are no points particularly worthy of note.
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We have left our full-year earnings forecasts unchanged.
We initially planned to post sales for 4 pachinko titles, but ended up posting sales for 5 titles, and initially planned to post sales for 8 pachislot titles, but that figure ended up at 3.
Although the number of titles sold is on the decline, sales volume sold for each individual title surpassed forecasts. We plan to launch “Pachislot BERSERK” and “Pachinko Ultra Battle Retsuden” in the fourth quarter.
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The table shows the lineup of the main pachinko/pachislot machines in the year ended March 31, 2014.
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The table shows the lineup of the main pachinko/pachislot machines in the year ending March 31, 2015.
“Pachinko Ultra Battle Retsuden” is the latest addition to the Ultraman series, and has earned advance praise from pachinko halls.
“Pachislot BERSERK” is the first title from NANASHOW, a new manufacturer. We hold some shares in NANASHOW, and provide the licences of content and development support. Currently, we are in the midst of marketing activities, but pachinko halls have been very impressed, and we expect it to sell out.
(Reference) Pachinko/pachislot market trends
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The pachislot model certification test changed in September 2014, and the machine spec itself will change from November 2015.
However, as with the 2004 regulation changes, although this will affect previous game functions, we view this as a business chance.
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The number of pachislot machines installed had been on a decline since 2006 as a result of regulation changes in 2004. By 2009, the number had declined by almost 350,000 since its peak, to 1,340,000 machines.
However, since the release of “Evangelion,” the industry’s first machine with the new standards, game functions and the entertainment value of pachinko and pachislot machines have been continuously improved, and since 2010 the number of machines installed has been on the rise, recovering to 1,720,000 in 2014.
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The number of pachislot machines sold fell sharply as the deadline for installing machines conforming to the old standards approached (pachinko/pachislot machines manufactured prior to the 2004 regulation changes; the so-called Regulation 4 machines).
However, even the machines conforming to the new standards (the so-called Regulation 5 machines), if manufactured in accordance with the regulations but enhanced, were sold in significant numbers at the 50,000 and 100,000 levels.
Although the machine spec itself will change from November 2015, we view this as a business chance and will proactively launch enhanced pachinko/pachislot machines to contribute to the market’s vitality.
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The installment trends by type of pachinko machine are shown in the diagram below.
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The graph provides data on recent pachinko/pachislot markets.
2. IP initiatives
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Fields strives to maximize the value of its IP and raise corporate value through a comprehensive development of its business, with a focus on IP.
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Currently, Fields has a total of 148 IP, including 55 Fields’ IP, 43 collaboration IP and 50 other companies’ IP. We are taking steps leading to animation and merchandising for 65 Fields’ IP, 11 collaboration IP and 12 other companies’ IP. Since it takes about 3 years from the time IP is created to expand it across media, such as animation and merchandising, we expect to see a major rollout from the second half of the year ending March 31, 2016 to the year ending March 31, 2017.
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We have taken several steps to attract a wide range of fans to the Ultraman series.
The stamp rally that we held in the third quarter under review with the East Japan Railway Company as our partner was even more popular than we had anticipated. This demonstrated the strength of IP with strong name recognition across 3 generations.
Going forward, we will expand and reinforce the TV series aimed at children and families, with BANDAI as our partner. We will develop live entertainment and pachinko/pachislot machines for adults, and will aggressively expand overseas at the same time.
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We will use “SWORDGAI” to explain the development of IP created from “HERO’S Monthly.” This title began its run in December 2012, and we started to produce the animation in the fiscal period under review. We plan to broadcast a TV series in spring 2016 and begin merchandising in a cycle of about 3 and a half years since the story began to be published. Other IP created from “HERO’S Monthly” will also be developed from the years ending March 31, 2016 and 2017 in the gradual release of animations, goods and pachinko/pachislot machines.
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Examples of main IP development in the year ending March 31, 2015 are described in the materials. In social games, we will focus on selecting titles and concentrate primarily on operating AKB48 related titles, which has made a major contribution to our revenue.