DeNA Q1 FY2020 Financial Results: Q&A Summary

Key insights

7 takeaways

01
DeNA recorded a 7.9 billion yen gain on the partial sale of shares in its subsidiary SHOWROOM, though only 900 million yen of this amount represented realized cash inflow.See it on page 3
02
The Live Streaming segment, driven by the Pococha platform, saw significant growth in Q1 as DAU increased following the April state of emergency; Pococha accounted for approximately 70% of the segment's total revenue.See it on page 1
03
The 'Slam Dunk' mobile title achieved notable success in China by combining a popular IP with a game system tailored to the local market, and the company plans to explore further regional expansions for the game.See it on page 2
04
Operating expenses for corporate and common functions decreased by over 500 million yen year-on-year due to restricted mid-career hiring, reduced business travel, and the reallocation of back-office staff to business departments.See it on page 3
05
The Sports Business faces a challenging environment due to COVID-19 capacity restrictions at stadiums, though Q2 performance is expected to improve slightly compared to the previous quarter as games resumed.See it on page 2
06
Other income for the quarter included a 2.0 billion yen gain from the absorption-type company split of the company's taxi-dispatch app business.See it on page 3
07
The Healthcare Business, centered on the 'kencom' service, is currently leveraging accumulated health insurance and life log data to develop evidence-based health promotion initiatives and potential insurance products.See it on page 4

Summary

The DeNA Q1 FY2020 financial results briefing highlights the company’s performance across its core segments, including mobile gaming, live streaming, and sports. A central theme of the discussion is the impact of the COVID-19 pandemic, which served as a catalyst for increased user engagement in digital services while simultaneously creating significant operational challenges for the company’s sports business due to stadium capacity restrictions.

Key findings indicate that the international gaming segment benefited from the successful launch of the Slam Dunk title in China, which leveraged a strategic combination of popular intellectual property and localized game design. Conversely, the Japanese gaming market experienced a year-over-year decline in virtual currency consumption, attributed to shifting user preferences toward browser-based versions of games and specific event scheduling. The live streaming business, anchored by the Pococha platform, emerged as a major growth driver, accounting for approximately 70% of the segment's revenue in the first quarter. This growth was fueled by a surge in new users during the spring, with management noting that these users have maintained high activity levels.

Financial management strategies during this period included a reduction in corporate overhead through restricted hiring and decreased travel expenses, alongside a significant gain from the partial transfer of shares in the subsidiary SHOWROOM Inc. The company also reported progress in its healthcare business, focusing on the utilization of health insurance and life log data to develop evidence-based health promotion services. Looking forward, the company remains committed to an IP-centric development pipeline while navigating the uncertain recovery of its sports segment and maintaining a focus on healthy, sustainable growth across its digital platforms.