Note: This document is a translation from the Japanese original for reference purposes only. In the event of any discrepancy between this translation and the Japanese original, the Japanese original shall prevail.

COLOPL, Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

2

FY2020 3Q

01

Overview of Results

02

Status of Services

Apr2020-Jun2020

03

Topics

Views and forecasts contained in this document are based on COLOPL's assessment as of the time this document was created, and do not in any way guarantee the accuracy of the information.

Please be advised that the actual results or outcome may significantly differ from the views and forecasts expressed herein due to changes in various factors. Data for 2Q ended September 30, 2012 and earlier consist of figures managed internally by COLOPL.

3

Overview of Results

Highlights

4

We made strenuous efforts in 3Q of the preparation period every year!

Business

Results

Cost

KPI

TOPICs

  • Sales declined to ¥10.3 billion from the previous quarter according to the trend for regular years.
  • Operating profit decreased to ¥1.8 billion from the previous quarter due to an increase in costs including M&A.
  • Expenses increased due to M&A and anime broadcast of "Shironeko Project".
  • Total landed at ¥8.42 billion, an increase of approximately ¥0.82 billion from the previous quarter level.
  • Both QAU and ARPU decreased slightly because it is a preparatory period for 4Q.
  • QAU and ARPU of FY14 products increased due to collaboration with "Demon Slayer".
  • We are accelerating business diversification by joining MAGES.inc to the COLOPL Group.
  • Development of new titles delays due to the COVID-19.

※QAU is obtained by combining the number of users who launched the title at least once after 7 days of its DL date within this quarter. ※ARPU is obtained by dividing the quarterly sales by QAU. Please be cautious that the sales disclosed is quarterly sales, not monthly sales. ※Group company means a company where COLOPL holds more than 50% of outstanding shares.

Revenue Transition

5

Sales ¥10.3B (QoQ: ▲7.7%), Operating profit ¥1.8B (QoQ: ▲47.4%)

(,000,000)

Sales

Operating Profit

OpM

47.2%

48.0%

44.9%

44.1%

43.5%

44.0%

36.3%

37.8%

43.1% 41.9%

43.3%

31.4%

36.0%

23.0%

29.0%

27.3%

22.9%

45.0%

30.2%30.9%28.8%

25.4%

22.0%

17.8%

22.7%

17.7%

14.9%

34.5%

31.9%

18.2%

21.7%

623

764

1,515

143

175

550

628 2,168

9.2%

864

784

4,887

5,326

6,750

6,639

7,154

7,956

7,867

9,338

9,986

5,749

6,233

3,666

3,700

2,477

3,087

2,197

1,982

876

12,726

7.1%

11,341

3,862

3,559

1,872

9,848 199-

692

0

2,755

2,872

4,628 1,749

6,510 2,345

11,073

12,360

14,297

15,843

16,445

16,560

18,176

21,213

23,270 10,456

22,181

19,019

20,150

14,410

12,856

10,933

14,046

12,370

11,187

9,491

1,895

9,774

7,956

2,459

11,194

11,159

10,300

-2.0%

0.0%

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q[Cons]

4Q[Cons]

1Q[Cons]

2Q[Cons]

3Q[Cons]

4Q[Cons]

1Q[Cons]

2Q[Cons]

3Q[Cons]

4Q[Cons]

1Q[Cons]

2Q[Cons]

3Q[Cons]

4Q[Cons]

1Q[Cons]

2Q[Cons]

3Q[Cons]

FY2012

FY2013

FY2014

FY2015

FY2016

FY2017

FY2018

FY2019

FY2020

Profit and Loss

6

Revenue and profits increased year on year due to "DRAGON QUEST WALK".

【Cons】

【Cons】

【Cons】

(,000,000)

3Q FY Sep. 2020

3Q FY Sep. 2019

YoY

2Q FY Sep. 2020

QoQ

（Apr-Jun 2020）

（Apr-Jun 2019）

（Jan-Mar 2020）

Sales

10,300

7,956

+29.5%

11,159

-7.7%

Gross Profit

4,365

1,993

+119.0%

5,295

-17.5%

Margin

42.4%

25.1%

+17.3pt

47.5%

-5.1pt

SGA

2,493

1,993

+25.1%

1,735

+43.7%

Operating Profit

1,872

0

-

3,559

-47.4%

Margin

18.2%

0.0%

+18.2pt

31.9%

-13.7pt

Current Profit

1,799

-66

-

3,601

-50.0%

Pre-Tax Profit

1,799

-66

-

3,601

-50.0%

Net Profit

1,311

-81

-

2,597

-49.5%

※There are some differences in calculation due to rounding down of less than one million yen and rounding off. ※Net sales (shared revenue portion) from '' DRAGON QUEST WALK'' is used.

Expense Transition

7

Up approximately ¥0.82 billion quarter on quarter to ¥8.42 billion due to M&A and anime

broadcasting of "Shironeko Project".

【Cons】

【Cons】

【Cons】

Cost（,000,000）

3Q FY Sep. 2020

3Q FY Sep. 2019

YoY

2Q FY Sep. 2020

QoQ

Comments

Sales ratio（％）

（Apr-Jun 2020）

（Apr-Jun 2019）

（Jan-Mar 2020）

PF & Payments

1,805

2,013

-10.3%

1,858

-2.9%

They decreased QoQ due to a decrease in

-7.8pt

+0.8pt

sales of titles other than "DRAGON QUEST

17.5%

25.3%

16.7%

WALK" of net revenue.

Royalties

248

248

+0.2%

214

+15.9%

They increased in QoQ due to group-in of

2.4%

3.1%

-0.7pt

1.9%

+0.5pt

MAGES.inc.

Employment

2,748

2,382

+15.3%

2,373

+15.8%

They increased in QoQ due to two M&A deals

26.7%

29.9%

-3.2pt

21.3%

+5.4pt

and joining new graduates.

Office

407

411

-0.9%

366

+11.4%

They increased in QoQ due to group-in of

4.0%

5.2%

-1.2pt

3.3%

+0.7pt

MAGES.inc.

iDC related

358

319

+12.1%

323

+10.9%

They increased in QoQ because of conjunction

-0.5pt

+0.6pt

with the increase in traffic due to popular

3.5%

4.0%

2.9%

events in each title.

Advertisement

500

612

-18.3%

571

-12.5%

It was less than the initial forecast of ¥0.7

-2.8pt

-0.2pt

billion due to delays in the release of new

4.9%

7.7%

5.1%

products and other factors.

Outsourcing

944

756

+24.9%

676

+39.6%

They increased in QoQ due to group-in of

9.2%

9.5%

-0.3pt

6.1%

+3.1pt

MAGES.inc.

Recruitment

51

87

-40.8%

48

+7.5%

Slight increase in QoQ. Continuing to make

0.5%

1.1%

-0.6pt

0.4%

+0.1pt

effective use of in-house resources.

Others

1,362

1,128

+20.7%

1,167

+16.7%

They increased in QoQ due to amortization of

-1.0pt

+2.7pt

goodwill, animated broadcasting, and

13.2%

14.2%

10.5%

collaborative IP usage fees for each title.

※There are some differences in calculation due to rounding down of less than one million yen and rounding off.

Workforce Transition

8

As a result of M&A and joining of new graduates, the Group as a whole has reached 1,565 employees.

Amount of each group company

COLOPL

402

408

399

398

413

405

390

414

418

431

440

452

450

433

436

432

592

69

133

155

156

461 7

481 8

589

620

640

670

790

796

803

779

863

848

847

817

862

852

860

836

945

941

914

905

973

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

FY Sep. 2015

FY Sep. 2016

FY Sep. 2017

FY Sep. 2018

FY Sep. 2019

FY Sep. 2020

※Executives and temporary employees are not included.

※Group company means a company where COLOPL holds more than 50% of outstanding shares.

Balance Sheet

9

Cash Equivalent decreased, and Non-Current assets increased due to M&A and aggressive

investment.

【Cons】

【Cons】

【Cons】

(,000,000)

Jun-2020

Jun-2019

YoY

Mar-2020

QoQ

Current Assets

70,980

63,397

+12.0%

72,148

-1.6%

Cash Equivalent

62,765

55,985

+12.1%

63,547

-1.2%

Non-Current assets

12,363

9,945

+24.3%

8,587

+44.0%

Goodwill

956

-

-

-

-

Gross Assets

83,343

73,342

+13.6%

80,736

+3.2%

Current Liability

8,392

4,635

+81.1%

7,541

+11.3%

Fixed Liability

547

486

+12.6%

525

+4.2%

Net Asssets

74,403

68,221

+9.1%

72,669

+2.4%

Capital

6,536

6,510

+0.4%

6,536

+0.0%

※There are some differences in calculation due to rounding down of less than one million yen and rounding off.

10

Status of Services

Sales Model

11

We focus on consecutively launching new titles and operating existing titles on a long-term basis. This approach enables us to accumulate sales for each release year like the stack of layers in a 'mille-feuille'.

Sales are

stacked one year on top of another.

Sales Transition by Release Period (Cons)

12

Sales increased for FY14 products, including the "Shironeko Project", which collaborated with "Demon Slayer".

Others（Consumer・Entrusted development・VR etc）

Our IP operation and merchandise

Overseas

FY2019: Project Babel, DRAGON QUEST WALK

FY2018: Disney TSUMTSUM LAND, Alice Gear Aegis, DREAM!ing

FY2017: Pro Baseball VS

FY2016: Shironeko Tennis

FY2015: Tokyo Casino Project

FY2014: Meow Meow Star Acres, Shironeko Project

FY2013: Quiz RPG, The Blue Sky of Sanguozhi

FY2012: Treasure Detective CARRIE, Pro Baseball PRIDE

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

[Cons]

[Cons]

[Cons]

[Cons]

[Cons]

[Cons]

[Cons]

[Cons]

[Cons]

[Cons]

[Cons]

[Cons]

[Cons]

[Cons]

[Cons]

[Cons]

[Cons]

FY Sep. 2015

FY Sep. 2016

FY Sep. 2017

FY Sep. 2018

FY Sep. 2019

FY Sep. 2020

※There are some differences in calculation due to rounding down of less than one million yen and rounding off. ※Some collaboration projects with other companies are calculated in net revenue (shared revenue portion).

※Sales of smartphone app titles operated by COLOPL's group companies under outsourcing contracts from COLOPL are divided among fiscal years.

Sales Transition by Release Period (Cons)

13

Our IP operation and merchandise increased due to the Group-in of MAGES.inc.

(,000,000)

FY Sep. 2019

FY Sep. 2020

3Q

4Q

1Q

2Q

3Q

FY Sep. 2012 Online Titles

252

318

211

223

199

FY Sep. 2013 Online Titles

1,549

1,460

1,055

1,389

1,016

FY Sep. 2014 Online Titles

2,417

4,324

1,777

2,180

2,843

FY Sep. 2015 Online Titles

45

30

24

23

29

FY Sep. 2016 Online Titles

400

566

421

470

321

FY Sep. 2017 Online Titles

299

263

238

171

202

FY Sep. 2018 Online Titles

1,259

1,188

1,286

1,443

907

FY Sep. 2019 Online Titles

369

2,200

5,272

3,580

3,413

Overseas

112

42

69

44

22

Our IP operation and merchandise

158

302

263

240

480

Others（Consumer・Entrusted

1,093

643

574

1,391

860

development・VR etc）

Total（Cons）

7,956

11,341

11,194

11,159

10,300

◼ FY2012：Treasure Detective CARRIE, Pro Baseball PRIDE (discontinued:1)

◼

FY2015：Tokyo Casino Project (discontinued:2)

◼ FY2018：Disney TSUMTSUM LAND, Alice Gear Aegis, DREAM!ing

◼ FY2013：Quiz RPG, The Blue Sky of Sanguozhi (discontinued:3)

◼

FY2016：Shironeko Tennis (discontinued:2)

◼ FY2019：Project Babel, DRAGON QUEST WALK (discontinued:1)

◼ FY2014：Meow Meow Star Acres, Shironeko Project (discontinued:4)

◼ FY2017：Pro Baseball VS (discontinued:1)

※There are some differences in calculation due to rounding down of less than one million yen and rounding off. ※Some collaboration projects with other companies are calculated in net revenue (shared revenue portion).

※Sales of smartphone app titles operated by COLOPL's group companies under outsourcing contracts from COLOPL are divided among fiscal years.

KPI Transition for Domestic Titles QAU×ARPU

14

Both QAU and ARPU decreased slightly.

ARPU（Yen）

QAU

ARPU

QAU

（,000）

¥2,187

¥2,235

¥2,208

¥2,419

¥2,656

¥2,421

¥1,880

¥1,412

¥1,297

¥1,491

¥1,518

¥1,752

¥1,195

¥1,173

¥1,171

¥1,467

¥1,215

¥1,315

¥1,108

¥1,170

¥1,117

¥1,201

¥1,178

7,125

6,963

7,804

8,374

1Q

2Q

3Q

4Q

FY Sep. 2015

8,391

1Q

8,710

2Q FY Sep.

9,579

3Q

2016

13,371

4Q

10,358

1Q

7,642

2Q FY Sep.

6,538

3Q

2017

7,285

4Q

9,368

1Q

8,530

2Q FY Sep.

7,457

3Q

2018

7,733

4Q

7,289

1Q

6,653

2Q FY Sep.

5,953

3Q

2019

8,852

4Q

9,202

7,898

7,588

1Q

2Q

3Q

FY Sep. 2020

※There are some differences in calculation due to rounding down of less than one million yen and rounding off.

※QAU is obtained by combining the number of users who launched the title at least once after 7 days of its DL date within this quarter. ※ARPU is obtained by dividing the quarterly sales by QAU. Please be cautious that the sales disclosed is quarterly sales, not monthly sales.

QAU×ARPU Transition by Release Period

15

QAU and ARPU increased for FY14 products including "Shironeko Project".

QAU_FY12

QAU_FY13

QAU_FY14

QAU_FY15

QAU_FY16

QAU_FY17

QAU_FY18

QAU_FY19

ARPU_FY12

ARPU_FY13

ARPU_FY14

ARPU_FY15

ARPU_FY16

ARPU_FY17

ARPU_FY18

ARPU_FY19

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

FY Sep. 2016

FY Sep. 2017

FY Sep. 2018

FY Sep. 2019

FY Sep. 2020

※QAU is obtained by combining the number of users who launched the title at least once after 7 days of its DL date within this quarter. ※ARPU is obtained by dividing the quarterly sales by QAU. Please be cautious that the sales disclosed is quarterly sales, not monthly sales.

Oversea Expansion

16

Due to the impact of the COVID-19, a new initiative for overseas expansion has been temporarily suspended.

500

400

300

200

100

0

(100)

In-house distribution mainly in North America

Partner distribution mainly in Asia

(,000,000 JPY)

Sales

Operation Profit

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

FY Sep. 2015

FY Sep. 2016

FY Sep. 2017

FY Sep. 2018

FY Sep. 2019

FY Sep. 2020

※ For overseas, sales are calculated in gross revenue (includes PF fee) for direct operation and net revenue (R/S fee) for local partner business model.

17

Topics

Measures and Impacts of the COVID-19

18

  • Previous Measures
  • We introduced a flexible work style system(*) in order to respond immediately to changes in the infectious situation and to balance the safety of employees with the promotion of business.
  • We will optimize the size of our offices to approximately 60% of the current level by November 2020, in line with the new work style.
  • We are actively promoting the online holding of real-world events and the sale of goods through our official online shop.
  • Major impacts on business
  • Existing titles partially postponed the holding of in-game events. With voluntary restraint from going out, DAU, playing time, and continuation rate are stable.
  • The development of new titles has been delayed due to telecommuting.
  • The COVID-19 has had an impact on some businesses, such as the talent business of
    MAGES.inc.
  • We are temporarily postponing a new initiative for overseas expansion.

*A system in which we determine the appropriate percentage of employees working at the company every month and determine the work style (at work/at home) of employees in each department in accordance with the percentage.

Status of IP deployment / utilization

19

While steadily nurturing medium-tolong-term sources of competitiveness, we aim to simultaneously assure immediate and effective sales.

Promotion of in-house IP

Animation

  • "Shironeko Project ZERO CHRONICLE " was well received, and it was the final time.

Goods

  • "Shironeko Project" is commercialized as a premium pillow using a special drawdown illustration of popular characters.
  • "Goods Caravan 2020", where "Shironeko
    Project" and "Quiz RPG" teamed up with Tokyu Hands, sells many limited-edition illustration products.

Use of other companies' IP

String of collaborations involving various titles

In addition to increasing the number of new inflows, we aim to increase royalties by responding to requests from existing users.

▲"Shironeko Project" collaborated with the popular IP "Demon Slayer"

※In order to prevent the spread of the COVID-19, we changed the sales of "Goods Caravan 2020" from over-the-counter sales at Tokyu Hands to sales at the Colopl's official online store.

※Product image for illustration purposes only. Actual product may vary.

Pipeline（Online Titles）

20

  • Development policy for new titles
  • Our policy is to develop well-balanced our original IP, our original IP derivatives, and other companies' IPs according to the market environment. In the short term, we will leverage the profitability of other companies' IP to create and cultivate our original IP that will become a source of competitiveness over the medium to long term, with the aim of achieving sustainable growth.
  • We aim to release about three to four new titles annually.
    • The development of new titles has been delayed due to telecommuting.

our original IP

other

Total

our original IP

companies' IP

derivatives

10titles

6titles

4titles

Strengthening Other Than Smartphone Games

21

Enhancing Business Diversity and Sustainability as the COLOPL Group.

▼ Games on Other Platforms

▼Non-Game Business Areas

MAGES.inc is planning to release three new

In order to maximize the IP value of the COLOPL Group

consumer releases during this fiscal year.

and optimize its business, we are inheriting the

business related to goods planning and sales to

MAGES.inc.

We will accelerate our goods-related business.

※It is subject to change as it is the current information.

※Product image for illustration purposes only. Actual product may vary.

4Q Outlook

22

  • Sales
  • "Shironeko Project" celebrated its sixth anniversary on July 14, and since the end of July, is collaborating with "That Time I Got Reincarnated as a Slime".
  • "Shironeko Tennis" celebrated its fourth anniversary on July 31, and "DRAGON QUEST WALK" will celebrate its first anniversary on September 12.
  • We will continue to focus on "proposing new ways of playing" in new titles.
  • Expenses
  • Advertising expenses are expected to be approximately ¥0.9 billion, but may vary depending on the new product.
  • Outsourcing costs are expected to increase as the new release approaches.

Thank you!

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Colopl Inc. published this content on 05 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 August 2020 07:36:01 UTC