Akatsuki FY3/22 3rd Quarter Financial Results

Key insights

6 takeaways

01
Akatsuki reported a year-over-year decline in Q3 FY3/22, with sales falling 12.3% to ¥6,137 million and operating profit dropping 44.1% to ¥1,233 million.See it on page 1
02
The company is pivoting its business model from pure mobile gaming toward a mixed-media rights business that integrates IP creation, anime, and real-life IP.See it on page 5
03
Operating expenses increased to ¥4,903 million, driven by a 26% rise in advertising costs for new title promotions and a 61.2% surge in R&D spending for new business development.See it on page 23
04
The mobile game pipeline includes the upcoming 3D action RPG 'TRIBE NINE' and 'EXtreme LIVES,' which is scheduled for release in early March 2022.See it on page 16
05
Akatsuki is expanding into the digital comics market with the launch of its 'HykeComic' webtoon app, planned for domestic release in spring 2022 followed by international distribution.See it on page 20
06
The company maintains a solid foundation of existing titles, including 'Dragon Ball Z Dokkan Battle' and 'Romancing SaGa Re;universe,' both of which are published internationally by BANDAI NAMCO Entertainment Inc.See it on page 30

Summary

Akatsuki’s financial results for the third quarter of the fiscal year ending March 2022 reflect a strategic transition toward a mixed-media rights business model. The company reported consolidated sales of 6.1 billion yen and an operating profit of 1.2 billion yen, representing year-over-year declines of 12.3% and 44.1%, respectively. These results were primarily driven by increased expenditures directed toward future growth initiatives, including the development of new game titles and the expansion of the company’s intellectual property (IP) portfolio.

The games business remains the core revenue driver, maintaining a solid foundation through existing titles such as Dragon Ball Z Dokkan Battle and Romancing SaGa Re;univerSe, which continued to achieve top-tier store rankings despite a lack of anniversary events during the quarter. To support future growth, the company is preparing for the early 2022 release of the new title EXtreme LIVES and has initiated the development of original IP projects like TRIBE NINE. The IP business segment bolstered performance through one-time licensing revenue generated from the co-development of original content.

Operational restructuring is a key component of the company’s current strategy. Akatsuki plans to spin off its games business into a wholly-owned subsidiary, Akatsuki Games, Inc., effective April 1, 2022, to enhance organizational agility. Additionally, the company is diversifying its portfolio by entering the webtoon market with the upcoming HykeComic app and establishing a new investment fund managed by Akatsuki Ventures, Inc. to support early-stage startups. These efforts underscore a broader commitment to evolving from a pure-play game developer into a comprehensive entertainment company that leverages both in-house and third-party IP across multiple media formats.