Investors

From 11:30 A.M. on Tuesday, February 14, 2023, we held a financial results briefing (online) for Q3 of the fiscal year ending March 31, 2023.
This page provides an overview of the main questions and answers (summaries) at the briefing.

Question & Answer Session (Summary)

Q1: I assume that royalty income in China in Q3 was strong, and is the trend continuing to be strong recently?

A1: The royalty income in China was recorded as exceeding expectations in Q3 due to the impact of manufacturing and preparing in advance for events such as the lifting lock-down and national day of the people’s republic of China. As a result, sales trended favorably. Also, in 2022, Ultraman related goods became No. 1 toys in China in terms of market share for the first time. Going forward, Tsuburaya Productions will strategically promote its business in fields other than toys.
The current Chinese market was affected by the lifting of the zero-Covid policy until January, but it is expected to gradually head toward recovery from February and regain stability in March, and it continues to perform steadily.

Q2: I think the popularity of trading cards in China suggests great potential expansion into mobile games and other areas. What are your thoughts on this?

A2: China is of course attractive for us, but there are numerous outstanding companies in Southeast Asia, particularly ASEAN. While building good relationships with these companies, we would like to work on games and other business areas for growth in Asia including China.

Q3: I would like to hear the response of the movie SHIN ULTRAMAN in ASEAN.

A3: We have received high praise from those who have seen the film in the theaters. We have also received offers of partnerships from major companies in Asia. In addition to the box office performance of the title, we are even more aware of how important Ultraman brand is to our group. In particular, there is a growing demand for Japanese IP in China. We are very pleased that Ultraman is highly popular among the Japanese IP. We will also investigate whether this was due to the impact of the movie SHIN ULTRAMAN.

Q4: As an IP holder company, what do you think about next strategies for IP following Ultraman?

A4: We are constantly investigating and researching the ideal IP for people in the world. Since it takes a long time to create great IP, we're also utilizing existing IP as well as looking at IP that allow us to do business quickly.

Q5: With entertainment content such as game and anime becoming more popular worldwide, are there any impacts on the acquisition and increasing compensation of human resources such as creative and licensing sales at Tsuburaya Productions?

A5: By changing our name to TSUBURAYA FIELDS HOLDINGS, we have created an environment that talented personnel pay attention to Tsuburaya Productions. We offer better treatment than other companies, and we would like to see the company grow by having many talented employees join the company.

Q6: I would like to ask about the outlook for Pachinko/pachislot (hereinafter, “PS”) machine market for next fiscal year, and in particular trends in smart pachinko and pachislot (smart pachi and slot).

A6: In PS industry around 1977, as PS machines shifted from hand-operated to electric system, women and older fans began to participate in the industry. The introduction of smart pachi and slot is similarly a positive change for the industry. We see this as an excellent opportunity to attract new fans. According to a survey, about half of the population will be single in 2035, and it is predicted that the number of people who think “I like to be alone but don’t want to be lonely” will increase. This is consistent with the value that pachinko can provide, and because it is a business oriented toward an aging society, we view smart pachi and slot positively as industrial revolutions in the industry.

Q7: When will your company’s first smart pachi and slot be launched?

A7: We are preparing to sell both smart pachi and slot with leading titles within our IP. Smart slot is scheduled to be sold around Q1 in the next fiscal year, but the planned timing of smart pachi sales has not been determined at this time.

Q8: What do owners of pachinko halls think about capital expenditures, store strategies and so on?

A8: We are actively exchanging views with owners of major pachinko halls, and we have the impression that many of them are considering very ambitious development plans.

Q9: Is there a rebound in performance in next fiscal year? Also, are there risk factors for the next fiscal year for the two main segments?

A9: In content and digital business segment, Tsuburaya Productions’ growth in China for Q3 was more than expected, but at present it is stable and expected to grow. Going forward, the Company will not be satisfied with the performance for the current fiscal year and will develop various merchandise and others. On March 29, the company will hold a BtoB event called “TSUBURAYA PRESENTATION” to disseminate new titles from 2024 onward worldwide. We will take all the steps we can take for the future, including Netflix’s CG anime movie in North America, and will work to grow further.
In PS business segment, sales of PACHISLOT INUYASHA, a private brand sold in Q1, exceeded expectations. In Q3, in addition to P Godzilla vs EVANGELION -G-cells awakening-, which was the largest unit sales in 2022, three titles of private brand performed well, and profits were better than expected. For the next fiscal year, the Company is planning overall sales volume exceeding this fiscal year, and number of our private brand title is also planning to be on par with this fiscal year. Pachinko hall operation is strong and smart slot is popular, so we are not worried about PS business for the next fiscal year.

Q10: I would like to ask you about the operating profit target for updating the medium-term management plan in next fiscal year.

A10: We strive to return to a level comparable to our market capitalization at the time we went public in 2003. Since results were sluggish from FY2016 onward, the Company had a conservative forecast for its results. But going forward, the Company intends to set high targets believing in its talented management team and employees. The next medium-term management plan is considering rolling on the upside.

Q11: Are there plans to hire personnel in line with earnings growth? Also, are extraordinary bonuses and base pay increases considered for employees?

A11: Compared to the starting salary rankings of The Nikkei announced in FY2022, the salary levels of our group’s new graduates ranked higher. Going forward, the company will continue to aim for an appropriate level of salaries.

Q12: Regarding future dividend policies, is there a target for dividend payout ratio, etc.?

A12: The Company intends to aim for shareholder returns that is competitive with any other company.