Developing Stories and Characters, the Sources of In-house IP Creation and the Basis of Cross-media Rollouts
Through the comic magazine HERO’S Monthly, we are continuing to focus our efforts on IP creation. As of August 2015, the magazine has included 53 works, and we have published 36 works of the comic book HERO’S Comics. Among these, we have published six volumes of the comic book ULTRAMAN, which has printed over 1.7 million copies to date and is steadily expanding its fan base.
In addition, we are promoting the rollout of works included in HERO’S Monthly into film, starting with a project to make SOUL ReVIVER into a live-action Hollywood movie and a project to make SWORDGAI into a TV anime series. In addition, we have decided to consecutively roll out several IP to games and pachinko and pachislot machines.
IP Digitization Utilizing Leading-edge Technologies, IP Popularization, and Value Expansion through Animations
In the Ultraman series, we are continuing with TV broadcasts and movie releases. We are
also working to expand sales of products related to Ultraman animations.
Moreover, we are promoting sales of existing animations and have plans for new animations overseas. At the same time, we are carrying out a full suite of events at complex facilities, planning and producing hands-on live entertainment events leveraging Ultraman IP, and holding these events in Japan and overseas.
We are also working together with partner companies to develop video content, focusing our efforts on cross-media rollouts of such content. These include the TV anime series RED EYES SWORD and CROSS ANGE Rondo of Angel and Dragon as well as the movie APPLESEED ALPHA and NINJA SLAYER FROM ANIMATION, an animation broadcast globally via the Internet.
Cultivating IP in a Wide Range of Fields, Including Games, Toys, and Pachinko and Pachislot Machines, and Using them to Generate Profits
In the social game field, in which we aim to establish an earnings foundation, we are promoting measures to make management and development systems more efficient, and are working to improve the quality of each of our titles. For titles that make use of AKB48, a Japanese idol girl group, we are implementing such measures as adding new content and holding live events. In games for smartphones, we are consecutively launching new apps that combine new sensations in their game functions with a cast of appealing characters.
Furthermore, we are expanding our AKB48 shops and KAIJU RESTAURANT, which use the world of monsters that appear in the Ultraman series as the restaurant’s theme. In this way, we are promoting the cross-media development of our IP.
In addition, in a manner that differs significantly from how we have expressed other IPs, we are developing the conceptual license brand A MAN of ULTRA, and are currently cooperating with over 30 partner companies in promoting the development of products that give shape to the concept and world view for this brand.
In the pachinko/pachislot machines business that forms a pillar of profits for the Company, we are pushing ahead with the strengthening of our sales structure through cooperation with Group companies that develop machines and affiliated manufacturers. We are working together in a variety of ways, from planning and development to distribution, in order to expand our product lineup over the medium-to long-term.
Merchandising—Pachinko/Pachislot Machines Business
In June 2015, we made K.K. Aristocrat Technologies and its affiliate K.K. Spiky our subsidiaries. Going forward, we will undertake product development utilizing the assets possessed by both of these companies, such as their hardware and software.
In addition to bolstering cooperation with affiliated manufacturers, we will also concentrate our efforts more than ever before to create highly entertaining pachinko and pachislot machines that fuse the characteristics of our IP with machines’ game functions. To this end, we will strengthen our planning and developing capabilities at Group companies that develop pachinko and pachislot machines. Furthermore, we will work to expand sales offices across Japan and increase the number of sales personnel. In this way, we will strive to develop increasingly comprehensive services.
(Reference) Methods for Recording Distribution Sales and Agency Sales
Pachinko and pachislot machines sales consists of two types, distribution sales and agency sales. Distribution sales is where the Company purchases pachinko and pachislot machines from a manufacturer and sells them to pachinko halls, and agency sales is where the Company acts as a sales agent for manufacturers, engaging in sales-related work and collecting a commission.
In distribution sales, funds from sales of pachinko and pachislot machines by the Company to pachinko halls are recorded in the Company’s net sales. As a standard, these sales are recorded at the time the pachinko and pachislot machines are shipped to pachinko halls. Costs of sales include the funds used to purchase machines from manufacturers. In addition, in the case the Company uses an agency to sell the machines it has purchased, commissions paid to that agency are also recorded as cost of sales.
Meanwhile, in agency sales, commissions received from manufacturers are recorded in the Company’s net sales in the event pachinko and pachislot machines are sold. As a standard, these commissions are recorded at the time the pachinko hall makes a payment to the manufacturer. In the case the Company makes a direct sale to the pachinko hall, costs of sales are not recorded. In the case the Company uses an additional agency to sell the machines, commissions paid to that agency are recorded as cost of sales.
In other words, these two types of sales establish a structure that in the case the Company increases distribution sales, mainly net sales will grow; and in the case the Company increases agency sales, mainly profits will grow.