Investors

FIELDS CORPORATION held a financial presentation for the second quarter of the year ending March 31, 2016 in OTEMACHI 1st SQUARE CONFERENCE (Chiyoda-ku, Tokyo) on November 2, 2015 (Monday) at 11:30 am.
This page provides an overview of our explanation (summary) at the financial presentation.

Takashi Oya, President & COO

1. Overview

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In the second quarter of the fiscal year ending in March 31, 2016, net sales totaled 50.2 billion yen and ordinary income was 1.9 billion yen.
Earnings are generally in line with full-year forecasts.
In pachinko/pachislot machine sales, the number of machines sold exceeded forecasts for some titles and came in below forecasts for other titles, but overall the number sold was up 31.7% over the previous year to 130,000 units, generally in line with forecasts.
The “HERO'S” IP was developed in cross-media formats, and the first pachinko/pachislot machine utilizing the “HERO'S” IP will be launched in November.

2. Summary of Results for the Second Quarter of the Year Ending March 31, 2016 (Consolidated)

Consolidated P/L

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The table shows the consolidated P/L statement for the second quarter of the year ending March 31, 2016.
We posted 50.2 billion yen in net sales, 1.8 billion yen in operating income, 1.9 billion in ordinary income and 0.7 billion yen in net income attributable to owners of the parent company.
Compared to the previous fiscal year, sales were up 29.9 billion yen (up 147.1% year-over-year) and ordinary income rose 6.0 billion yen, but this was primarily due to an increase in the number of pachislot machines sold.

Main pachinko/pachislot machines lineup

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The table shows the pachinko/pachislot machine lineup already announced for the year ending March 31, 2016.
In the second quarter, the number of pachislot machines sold totaled 69,000, up 146.6% year-over-year, and the number of pachinko machines sold decreased 12.1% to 64,000.
We have already released 3 pachislot titles and 2 pachinko titles for the third quarter (Oct.-Dec.)

Consolidated B/S

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The table shows the consolidated B/S.
There are no points particularly worthy of note.

Consolidated cash flow

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The table shows the consolidated cash flow.
There are no points particularly worthy of note.

(Reference) Trends in Pachinko/Pachislot Market and Data

Status of pachislot machine sales

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The status of pachislot machines sales is shown in the graph.
Most major titles will be released in the third quarter ahead of the deadline at the end of November 2015 for the installation of new machines under the old regulations. As a result, the number of machines sold and the number of titles fell slightly in the second quarter compared to the previous year.

Status of pachislot machine installation

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The status of pachislot machines sales is shown in the graph.
The number of machines installed was at the same level as recorded at the end of 2014. The share of machines installed stands at 46% for AT-type machines, but ART-type machines will dominate the market going forward. We expect the share of machines installed to rise for normal-type machines as well.

Status of pachinko machine sales

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The status of pachinko machine sales is shown in the graph.
In the second quarter, the number of machines sold and the number of titles sold were at the same level as reached in the previous year.
The number of titles will increase in the third quarter, in part because of the deadline at the end of October 2015 for the installation of new machines under the old regulations, but the number of machines sold will trend in a stable range.

Status of pachinko machine installation

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The status of pachinko machines installed is shown in the graph.
The number of machines installed is experiencing a modest downturn. The share of machines installed continues to increase for the Amadigi-type (Low Spec) and the MAX-type (High Spec), but we expect the Middle high-type machines, which is one of our strengths, to dominate the market going forward.

Status of implementation of SCA's model certification test

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The status of conformance to the Security Communications Association's certification tests is shown in the graph.
Companies are requesting the same titles in multiple specifications for both pachinko/pachislot ahead of the deadline for the installation of new machines under the old regulations, which has resulted in an increase in the number of machines passing model certification test.

Tetsuya Shigematsu, Executive Vice President

3. IP Initiatives

Status of IP

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The graph shows the total number of IPs and the status of their development.
Approximately 40 titles have been identified as priority IPs, and currently we are closely examining investment methods and media expansion methods. Beginning in the next fiscal year, we will gradually expand monetization of social games and monetization with visual versions as their basis.

IP creation

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These materials show the status of IP creation.
We began running works from TATSUNOKO PRODUCTIONS in “HERO'S” Monthly in November. This magazine has been acclaimed for its success in expanding the “HERO'S” IP. The key issue going forward will be how we can break out the IP by affiliating with other media and other means.
In cross-media development, we decided to develop a pachislot game for “MAJESTIC PRINCE” and a game for “KILLING BITES” (PS4/PS Vita). We will figure out how best to leverage these IPs in the future.

Visual development for IP (overseas)

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These materials show the status of visual expansion (overseas) for IPs.
In visual distribution, we simultaneously broadcast Japan’s “Ultraman X” in China and North America. Total viewership was high in China, reaching 250 million, and we plan to expand product development overseas in the future.
In addition to visual distribution, the Ultraman series is gradually being expanded overseas in the form of live entertainment, live shows and advertising.

IP merchandising expansion (social games)

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The handout shows the status of social games.
We are focusing on improving the game function of 6 existing titles. We will also sequentially release 4 native applications beginning in November. In addition, we will collaborate on other companies' game titles to expand licenses for the Ultraman series.
“the TOWER of PRINCESS,” released in August, has been downloaded over 400,000 times. A TV commercial was launched in September, creating a profit for this project in a single month. We will continue to acquire new users while maintaining the loyalty of existing users.

IP merchandising expansion (licensed goods)

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These materials show the status of licenses and goods.
Total views of “NINJA SLAYER” on NICONICODOUGA exceeded 11 million, with 28 companies licensing this brand. Terrestrial broadcasting will begin in spring 2016, further raising its name recognition.
“A MAN of ULTRA,” the conceptual license for Ultraman, has been licensed by 33 companies and is being merchandised broadly. Moreover, a pop-up shop opened in Omotesando Hills for one month in October. Management companies have been impressed, and major department stores are also inquiring about pop-up shops.
“UGLYDOLL” is being licensed as “a Sanrio All Stars × UGLYDOLL” in a collaboration with Sanrio. At present, approximately 20 companies have licensed the brand, and commercialization will begin next spring.
In addition, “TALKING PUMP,” a character that comes with a talking bottle, was developed for children in a new approach to character goods. In addition to “Ultraman X,” other companies' famous IPs are also being used. Over 2,000 drugstores, toy stores and other stores have already decided to carry this product.