KLab FY2021 2Q Presentation Material

Key insights

7 takeaways

01
KLab reported a revenue decline to 5,944 million yen in Q2 2021, driven by the underperformance of core titles including Love Live! School Idol Festival ALL STARS and BLEACH Brave Souls.See it on page 4
02
Management has revised its full-year earnings forecast downward due to the persistent poor performance of existing mobile offerings.See it on page 13
03
The company has set a strategic revenue target of 50 billion yen to be achieved by fiscal year 2023.See it on page 39
04
To address financial pressures and market positioning, KLab is implementing rigorous cost controls and has acquired the company GlobalGear.See it on page 14
05
KLab is diversifying its revenue model beyond traditional in-app purchases by incorporating subscription services and advertising.See it on page 34
06
The company is expanding its development scope beyond mobile to include PC and console platforms, while aggressively entering the casual games market.See it on page 33
07
Growth strategy involves leveraging AI-driven data analytics and a support model to facilitate the overseas expansion of Japanese intellectual properties.See it on page 32

Summary

KLab faces a challenging fiscal landscape as of the second quarter of 2021, characterized by a revenue decline to 5,944 million yen. This downturn is primarily attributed to the underperformance of core titles, including Love Live! School Idol Festival ALL STARS and BLEACH Brave Souls. In response to these results and a persistent downward trend in existing mobile offerings, the company has revised its full-year earnings forecast downward. To address these financial pressures, management is prioritizing rigorous cost control measures while simultaneously pursuing strategic acquisitions, such as GlobalGear, to bolster its market position.

The company’s long-term growth strategy centers on stabilizing its existing portfolio through enhanced operational efficiency and the integration of AI-driven data analytics. By leveraging its established expertise in action, sports, and rhythm genres, KLab is expanding its reach across mobile, PC, and console platforms. A key component of this transition involves diversifying revenue streams beyond traditional in-app purchases by incorporating subscription models and advertising. Furthermore, the company is aggressively entering the casual games market and utilizing a support model to facilitate the overseas development of Japanese intellectual properties.

These initiatives are designed to mitigate risk and establish a more sustainable revenue base, with a stated objective of reaching 50 billion yen in revenue by fiscal year 2023. While navigating current performance volatility, the company remains committed to compliance with Tokyo Stock Exchange listing standards and continues to invest in new media-mix projects. By balancing the maintenance of legacy titles with the development of new earnings pipelines, the organization aims to transition toward a more resilient and globally diversified business model.