KLab FY2020 1Q Presentation Material

Key insights

6 takeaways

01
KLab reported a 15% revenue decline to 7,420 million yen in Q1 2020, primarily due to the decelerating performance of its flagship title, Captain Tsubasa: Dream Team.See it on page 4
02
Despite revenue headwinds and COVID-19 development risks, the company maintained its initial annual financial forecasts for 2020.See it on page 12
03
The company is diversifying its revenue model by integrating in-game advertising and subscription services while pivoting toward the casual gaming market to stabilize earnings.See it on page 6
04
Growth strategy focuses on transforming Japanese intellectual properties into global assets, supported by partnerships such as the collaboration with Pierrot Co., Ltd.See it on page 24
05
Operational efficiency initiatives are underway to create a leaner development environment, supported by a workforce that reached 578 full-time employees by March 2020.See it on page 33
06
Core stability is currently maintained by the global launch of Love Live! School Idol Festival ALL STARS and the continued performance of BLEACH Brave Souls.See it on page 5

Summary

KLab’s financial performance for the first quarter of 2020 reflects a transitional period characterized by a 15 percent revenue decline to 7,420 million yen. This downturn is largely attributed to the decelerating momentum of the flagship title Captain Tsubasa: Dream Team. Despite these headwinds, the company maintains a stable operational foundation supported by the global launch of Love Live! School Idol Festival ALL STARS and the continued resilience of established titles like BLEACH Brave Souls. While the onset of the COVID-19 pandemic introduced potential risks regarding development timelines, the company has opted to maintain its initial annual forecasts, signaling confidence in its long-term strategic trajectory.

The core growth strategy centers on the transformation of Japanese intellectual properties into universal assets capable of achieving sustained global reach. To facilitate this, the company is prioritizing high-impact genres such as action role-playing games and sports simulations, while simultaneously diversifying its revenue streams through the integration of in-game advertising and subscription models. Furthermore, a strategic pivot toward the casual gaming market is intended to provide a more consistent earnings buffer. Operational efficiency remains a key priority, with management actively streamlining internal structures to support a leaner, more agile development environment.

Organizational growth remains consistent, with the group’s full-time workforce expanding to 578 employees by the end of March 2020. This human capital investment supports an extensive portfolio of intellectual property partnerships that serve as the primary engine for the company’s international expansion. By leveraging strategic alliances, such as the collaboration with Pierrot Co., Ltd., the company continues to focus on scaling its presence in overseas markets, ensuring that its localized content remains competitive within the broader global mobile gaming landscape.