Aiming FY2018 Q2 Financial Results Presentation

Key insights

6 takeaways

01
Aiming narrowed its operating loss to 436 million yen in FY2018 Q2, an improvement from the 678 million yen loss reported in the previous quarter.See it on page 11
02
Quarterly revenue fell 7.5% to 1.82 billion yen, as the growth of Caravan Stories failed to offset the declining performance of the long-running title Logres.See it on page 4
03
Operating expenses were reduced through a 20.2% quarter-over-quarter decrease in selling, general, and administrative costs, largely due to lower promotional spending for Caravan Stories.See it on page 19
04
Cost of sales declined by 5.7% as development man-hours for Caravan Stories stabilized and the company discontinued or transferred underperforming titles.See it on page 8
05
The company is expanding the reach of Caravan Stories through PC platform integration and international licensing agreements with X.D. Network Inc. for the South Korean and Chinese markets.See it on page 16
06
Management anticipates a revenue decline in Q3 due to the absence of one-time income from title transfers, while maintaining a strategic focus on the smartphone MMO genre.See it on page 21

Summary

The financial results for the second quarter of the 2018 fiscal year reflect a period of ongoing operational transition for Aiming, characterized by a decline in revenue alongside a reduction in operating losses. Revenue for the quarter reached 1.82 billion yen, representing a 7.5% decrease from the previous quarter. This decline was primarily driven by lower performance in the long-running title Logres, which could not be fully offset by the growth of Caravan Stories. Despite the revenue contraction, the company successfully narrowed its operating loss to 436 million yen, an improvement from the 678 million yen loss reported in the first quarter.

The improvement in the bottom line was largely attributed to disciplined cost management. Selling, general, and administrative expenses decreased by 20.2% quarter-over-quarter, driven by reduced promotional spending for Caravan Stories and a strategic reallocation of personnel to development projects. Furthermore, cost of sales declined by 5.7% as development man-hours for Caravan Stories stabilized and titles were either transferred or discontinued. The company maintains a focus on the MMO genre for smartphones, emphasizing long-term user retention through real-time social features and continuous content updates.

Looking ahead, the company is prioritizing the improvement of active user counts and monetization metrics. Strategic initiatives include expanding Caravan Stories through PC platform integration, international releases in traditional Chinese, and a licensing agreement with X.D. Network Inc. to bring the title to the South Korean and Chinese markets. While the company anticipates a slight revenue decline in the third quarter due to the absence of one-time title transfer income, it expects to continue its focus on cost optimization and the development of new original and IP-based titles to drive future growth.