Summary of Key Questions and Answers
From the DeNA IR Day 2022
The following is a summary of the key questions and answers from the DeNA IR Day 2022, held on October 13, 2022.
Q1 | As there was no session on the Game Business today, I hope there will be an |
opportunity at some point to hear about the market trends and direction for the | |
Game Business. | |
A1 | (Okamura) |
We discuss the Game Business at the operating results briefings and at other | |
opportunities, and will continue to do so going forward. We continue to develop new | |
titles in our pipeline while also considering the best future shape for sustaining the | |
Game Business amidst the maturing game market. | |
Q2 | In Session 6 you mentioned a shift from on-prem to the cloud. Did you face any |
difficulties, and were there any difficulties specifically from a Game Business | |
perspective? | |
A2 | (Kobayashi) |
Advance thought and preparation was required for lifting services already in | |
operation to the cloud while avoiding any problems. Some things we had achieved in | |
on-prem would not necessarily be feasible in exactly the same way in the cloud, so | |
we had to be creative to ensure there would be no impact to our services while also | |
taking advantage of the benefits of using the cloud. | |
In the Game Business, for example, if PvP battles over the network are a major part | |
of a particular game, then we need to take care that transmission errors do not | |
occur. The issues we face depend on the individual game, but we use the | |
technological expertise we have accumulated to date to address these issues. | |
Q3 | Why are there a large number of female broadcasters in Pococha Japan? What are |
the user age groups and the monetization trends for each age group? | |
A3 | (Sumiyoshi) |
Our service is primarily about communication, so we tend to see people who are | |
skilled at communication staying with the service, and I think that has contributed to | |
our demographics. We have viewers in a wide age range, from 18 to over 50, and | |
their spending patterns tend to be appropriate for their age group, as you would see | |
in games. | |
Q4 | You shared a numerical goal for healthcare and medical, but could you share more |
details about the breakdown? What are your thoughts on the long term profit | |
potential and the products that will become the main components of the business? | |
A4 | (Oi) |
As I mentioned briefly, there will be milestones for Join in 2024 and for data health in | |
2023. |
The growth rate of Allm is high, but for example with Join there could be variability from what types of businesses we build on top of the platform in the future, and the
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composition of growth in Japan vs. overseas. I cannot comment any further at this | |
point, but I hope you will look forward to our future achievements. | |
We expect both Join and the data use business will be stable, low volatility | |
businesses. | |
Q5 | Why did Allm choose to become part of the DeNA Group? |
A5 | (Sakano) |
First of all, our vision was in line with that of DeNA. Over the past 21 years as a | |
startup we have been pursuing business growth while gathering capital on our own, | |
but I saw how under the DeNA Group we would be able to achieve that growth more | |
quickly and on a larger scale. | |
Another reason was the capabilities of the management team and the technological | |
capabilities of the DeNA Group. The healthcare and medical field is a market with | |
significant government involvement, including medical legislation. I felt that we would | |
be able to utilize DeNA Group assets for building relationships with government and | |
to acquire approvals and authorizations. | |
Going forward, as progress is made with AI, IoT, and connecting medical devices to | |
networks, I felt that if we make use of the DeNA credentials and capital, we would be | |
able to pursue not only acute cardiovascular disease, but also expand into other | |
areas and expand the business. | |
Q6 | The US market is significant, so why did you decide to go into Brazil? Please share |
the competitive and business environment for Allm, both in Japan and globally. | |
A6 | (Sakano) |
In North America and Europe it is common to focus on one business. However, Allm | |
takes a portfolio approach, providing products necessary for clinical settings, | |
government, and patients. There are competitors in individual areas, but there are no | |
other companies globally that have engaged in multifaceted business. | |
Originally we wanted to do business globally. Our mission was to bring Japan's | |
medical technology abroad, and as we worked on that Brazil stood out as an | |
opportunity due to the move to start establishing various social foundations for the | |
Rio Olympics. We decided to start from the opposite side of the globe, and expand | |
our business globally like you would in the game Othello. | |
The US makes up approximately half of the world's medical IT market, but it is also | |
different from Japan with a variety of stakeholders, including private insurance | |
providers among others, making for a complex structure. For this reason we are | |
tuning as we go with our business in the US. | |
In the US there are a few other apps with similar functionality to Join, but we have | |
not only Join but also apps for patients and emergency medical personnel. This | |
multi-faceted approach is unique to us. Needs are diversifying, and we are | |
enhancing our products as we go. For example, in the US we have Join and | |
JoinTriage, and the latter is used much more in the US than in Japan. By adapting to | |
the local needs we are able to take various approaches, and in the US we are taking | |
the strategy that matches the US. | |
Q7 | Please share your capital allocation policy, including the approach to M&A and |
shareholder returns, and the prioritization of each. |
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A7 | (Okamura) |
In the first three years of the mid to long term strategy we had multiple M&A while | |
proceeding with investment to enable leaps in growth in both approaches. However | |
M&A is merely the starting point, and we intend to grow each business. In the Serve | |
approach we will change to a profit-generating structure, and in the Entertain | |
approach we will add the Live Streaming Business to the Game Business for growth. | |
At the midway point of the three year period, our preparations have been made to | |
promote the business, and going forward we will focus on growing our businesses. | |
We will also continue to consider shareholder returns. However, in our business | |
areas, we believe it is necessary to consider investment in an agile manner when the | |
need for investment arises. | |
In the three year period from FY2024 we intend to share more detail about each | |
business and show clear growth. | |
Q8 | In the past two years Allm revenue has grown, but was that growth due to temporary |
revenue related to COVID-19? What is your outlook? | |
A8 | (Sakano) |
We have had various projects running with a keyword of infectious disease | |
response. | |
We had worked on business focused on emergency medicine, but we faced a | |
situation where both the government and medical personnel needed to fight | |
COVID-19. | |
We took that as a new business opportunity and launched our infectious disease | |
business. For example, we were adopted by Tokyo and Kanagawa Prefectures, | |
among others. We provide a support service for recuperation management for those | |
recuperating at home, and provide the app adopted by the Ministry of Health, Labour | |
and Welfare of Japan Health Monitoring Center for Overseas Entrants as the health | |
and location monitoring app for overseas entrants. Due to COVID-19, we were | |
incorporated into various government infectious disease response measures. | |
Infectious disease will not go away, and discussions are underway about other risks | |
such as those associated with bacterial and other infections. We intend to leverage | |
our results and cultivate new opportunities going forward. | |
MySOS had 120,000 to 130,000 users before COVID-19, but now is used for | |
infectious disease response and the number of users grew to approximately 5 million | |
now. The potential businesses we can build on that base is not limited to infectious | |
disease response, and for example there are various possibilities for business | |
development, including in emergency medical care measures, etc. | |
Q9 | I believe Join is in the phase of expanding the number of locations that use the |
service. What is the time frame for monetization going forward and the revenue | |
potential? | |
A9 | (Sakano) |
Join is a medical device program selected for insurance treatment in Japan, so it is a | |
paid service, and we have already succeeded in monetization with medical | |
organizations as our customers. |
The stakeholders and potential customers in the medical and healthcare space are not just medical organizations, but also local governments, national governments, care facilities, beneficiaries & patients, pharmaceutical companies, medical device
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manufacturers, and (in countries that do not have a public health insurance system like Japan) private insurance companies, etc. A variety of businesses for these diverse stakeholders are possible.
The paid provision of Join abroad has succeeded in PoC form. In the future, we believe it will be important to ascertain which business model to build with which stakeholders.
I believe that our app is the Japanese medical app most commonly used overseas, and I hope you look forward to our future performance.
Q10 What is the TAM of the live streaming market in Japan?
A10 (Sumiyoshi)
Currently the live streaming market is continuing to grow, including in users.
In the forerunning China market we have seen trends such as a combination of live streaming and commerce, and live streaming and games, where live streaming is used as a base with added value being tacked on.
In Japan live streaming will first grow as a social networking service, and going forward I expect to see growth in various added value segments.
We will continue to create value through our communities as I described today, while building a foundation to accept a diverse set of users, and we will aim to capture share.
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DeNA Co. Ltd. published this content on 17 October 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 October 2022 10:02:02 UTC.