FY2024 Second Quarter Financial Results

Consolidated net sales for the second quarter of fiscal year 2024 reached ¥14.2 billion, with operating income totaling ¥0.8 billion. These results align with internal projections despite a 10% sequential decline in sales. Performance was primarily influenced by the Game and Anime segment, which saw an 11% revenue drop to ¥10.4 billion following the conclusion of major first-quarter anniversary events and the closure of specific titles. However, the company anticipates a recovery in the third quarter driven by the second anniversary of Heaven Burns Red and its strategic expansion into the Chinese market.

The Metaverse segment presents a bifurcated outlook, characterized by a 119% year-on-year sales increase in the VTuber business alongside profitability in the REALITY platform. Despite these gains, aggressive investments in talent expansion resulted in a quarterly operating loss for the division. The company aims for the Metaverse segment to reach a break-even point by the end of the fiscal year, with a long-term operating profit target of ¥1.9 billion by fiscal year 2026. Simultaneously, the Marketing DX and Commerce businesses emerged as significant growth drivers, with the latter achieving a 137% year-on-year surge in operating income fueled by SaaS solutions for the hospitality and restaurant industries.

The Investment business reported a quarterly loss due to the timing of distributions, yet it maintains a robust foundation with assets under management totaling ¥83.1 billion and substantial unrealized gains of ¥32.6 billion. While the company faces short-term volatility in its core gaming operations, the diversification into high-growth areas like digital transformation and commerce provides a stabilizing effect. Management maintains its full-year forecasts, banking on upcoming seasonal events and the continued scaling of its platform and service-based businesses to drive second-half performance.