Bushiroad FY2024 2Q Financial Results Briefing Material

Key insights

7 takeaways

01
Bushiroad's first-half FY2024 net sales were ¥10.55 billion, with an operating loss of ¥215 million, missing both year-on-year comparisons and internal projections.See it on page 1
02
The shortfall stemmed mainly from persistent weakness in the Digital Contents unit (mobile games) and elevated research and development spending.See it on page 18
03
The music business hit record-high quarterly net sales, and Live Entertainment also remained strong, offsetting some of the damage from digital weakness.See it on page 8
04
To fix declining mobile gaming profitability, Bushiroad is pivoting toward console game development and expanding its in-house intellectual property.See it on page 39
05
Bushiroad is diversifying revenue with the upcoming launch of DREAM ORDER, a professional baseball trading card game, and a new capital partnership with YUHODO Inc. to secure its development pipeline.See it on page 13
06
New leadership appointments at New Japan Pro-Wrestling and Bushiroad Fight are intended to revitalize the sports entertainment segment.See it on page 26
07
Operating mainly in Japan, Bushiroad is pushing international expansion through worldwide trading card game events, bilingual corporate materials and a clearer IP portfolio presentation to meet global investor expectations, aiming to recover from first-half losses over the rest of the fiscal year.See it on page 40

Summary

Bushiroad's second quarter of fiscal 2024 (October to December 2023) showed softening profitability in Japan's trading card, entertainment, and sports conglomerate. Net sales fell to ¥10,554 million, down ¥1,196 million year over year, and operating profit swung to a ¥215 million loss from a ¥515 million profit, with ordinary profit at a ¥308 million loss after ¥209 million in foreign exchange losses. For the first half, sales reached ¥22,139 million and operating profit ¥406 million, down ¥976 million. These figures represent 43.4% of the ¥51,000 million full-year sales forecast and just 20.3% of the ¥2,000 million operating profit target, though guidance remains unchanged.

The shortfall stems chiefly from the Digital Contents Unit, where mobile game net sales dropped to ¥1,420 million (down ¥967 million) as several titles were terminated and R&D rose ¥299 million. Management is pivoting to console games, targeting roughly two releases per quarter and a return to profitability in fiscal 2025. The TCG Unit saw a seasonal dip, with Weiss Schwarz steady and Shadowverse EVOLVE slightly soft. The Live Entertainment Unit offset some weakness with record quarterly music sales of ¥1,517 million, driven by BanG Dream! events and MyGO!!!!! albums. The Sports business deepened its losses to ¥120 million, with STARDOM operational defects prompting a structural review and New Japan Pro-Wrestling/STARDOM sales falling to ¥1,367 million.

Bushiroad is relying on a stronger second half, anchored by the "DREAM ORDER" baseball TCG launching in April and June 2024, which will also lift advertising spend. Overseas TCG sales now account for roughly 40-42% of the total, supported by Southeast Asian, North American, and new simplified Chinese editions. Expansion plans include Bushiroad EXPO events in India, Indonesia, and Thailand, an English "Bushi Navi" tool, a bilingual Group Corporate Profile, and a capital and business tie-up with game designer YUHODO. Leadership changes at New Japan Pro-Wrestling and STARDOM accompanied a January 4, 2024 event drawing about 29,000 attendees.