Stock Quote

Market Data

Consumer Market (Package + Digital)

Market trend

In 2020, the consumer (package + digital) market grew to 42.9 billion dollars (up 22.2% from the previous year). This was due primarily to favorable packaged and digital sales. Digital sales have continued to expand in North America and Europe where such sales account for 81% of the market. The highly profitable digital contents market now accounts for roughly 71% of the consumer market.

Forecast

The forecast for 2021 is for the market to reach 51.8 billion dollars (up 20.7% from the previous year) owing to continued growth of the digital market and revitalization of the market with the popularization of new hardware. In the medium term, we see the digital market expanding rapidly in Southeast Asia and other developing regions and new game delivery methods such as streaming and subscriptions growing. As such, we expect the market to grow to 70.6 billion dollars by 2025 (up 64.6% compared to 2020). We also expect continued growth in the mobile market.

Major opportunities and risks

Opportunity

  • ● Creation of highly competitive products using new technology More channels for product distribution with the appearance of new platforms
  • ● Expanded number of sales regions using digital distribution
  • ● Achievement of extended product life cycles through digital sales
  • ● Reduction of the used market due to penetration of digital sales
  • ● Rising development costs with the appearance of new technology and improved device performance

Risk

  • ◆ Rising development costs with the appearance of new technology and improved device performance
  • ◆ Dependence on popular series
  • ◆ Platform adoption trends
  • ◆ Changes in user purchasing trends with the next generation of platforms
  • ◆ Risks due to a country’s politics, culture, or religion
  • ◆ In-game purchases becoming a social issue
  • ◆ Information leakage

Addressing major opportunities and risks

  • ・Focusing on improving quality and reducing development costs by building our own development engine and enhancing our development team
  • ・New customer acquisition through a steady release of new major titles, creating new IPs, and the Single Content Multiple Usage strategy
  • ・Diversifing profit risk through multi-platform development and strengthening PC platform development to hedge against dedicated console trends
  • ・Lengthening product life of games with increased digital sales rates and increasing unit sales through pricing strategies
  • ・Developing sales approaches to meet local needs and localization by an in-house team of experts
  • ・Monetizing without incentivizing in-game purchases
  • ・Establishing the Information Technology Security Oversight Committee, receiving instruction and advice, and implementing various security strengthening measures to prevent a recurrence

Arcade Operations Market

Market trend

The domestic arcade facilities market grew during the previous fiscal year (ended March 31, 2020) for the fifth year in a row to 540.8 billion yen (up 4.0% from the previous year). The total number of facilities remained flat at 12,212 (up 0.4% from the previous year), and annual sales per store grew to 44.28 million yen (up 3.6% from the previous year.)

Forecast

This fiscal year (ended March 2021), the market was severely impacted by COVID-19 as stores were forced to suspend operations or shorten operating hours during states of emergency while foot traffic decreased due to efforts to avoid crowds. The market situation next fiscal year (ending March 2022) is expected to remain harsh, although we can expect some recovery due to the operational know-how we have acquired thus far in the pandemic.

Major opportunities and risks

Opportunity

  • ● Acquisition of new customers through multifaceted roll-out of stores including themed venues, merchandise specialty stores, VR experiences, etc.
  • ● Increased awareness with new business formats and new technologies

Risk

  • ◆ Reduced ability to attract customers due to the COVID-19 pandemic
  • ◆ Changes to the market environment due to the diversification of leisure activities and declining birthrate

Addressing major opportunities and risks

  • ・Acquisition of new fan demographic and increased awareness through multifaceted business developments
  • ・Attraction of customers using our home video game content and other assets

Gaming Machines Market

Market trend

In the previous fiscal year (ended March 31, 2020), the gaming machine market shrank for the seventh consecutive year to 564.7 billion yen (down 16.1% from the previous year).

This was due to diminishing investment appetite for gaming machines at halls due to the sluggish performance of machines with gambling restraints (implemented in response to model certification methods changes), and fewer new stores. This fiscal year (ended March 2021), the new machine types showed promise, however COVID-19 created a tough market environment.

Forecast

Next fiscal year (ending March 2022), we expect some demand for new machines replacing older types (which was initially delayed due to COVID-19), but believe the situation will remain harsh from increased investment burdens on halls and operational suspensions due to COVID-19.

Major opportunities and risks

Opportunity

  • ● Expanded sales volume by responding to regulations appropriately
  • ● Development of machines using popular IPs created for home video games

Risk

  • ◆ Non-compliance with model testing of pachislo machines

Addressing major opportunities and risks

  • ・Building a system to perceive regulatory trends that allows us to respond immediately to changes in regulations through membership in industry associations

Esports Business

Market trend

The Esports Market last fiscal year (ended March 2020) was 940 million U.S. dollars, and because people were consciously avoiding crowded events, that remains almost unchanged from the previous year.

Forecast

In 2021, we expect the market to grow to 1.08 billion U.S. dollars (up 14.5% from the previous year) owing to increased sponsorship and media rights fees, primarily in China, which accounts for the largest share. The future remains unclear due to the prolonged COVID-19 pandemic, but the growth of live broadcasts has resulted in a steady increase of viewers, and it is expected to grow to 1.61 billion U.S. dollars by 2024.

Major opportunities and risks

Opportunity

  • ● Expanded fan base from non-game players watching events
  • ● Creation of new profit opportunities such as licensing rights to hold events and stream video
  • ● Promotion of online tournaments that leverage game characteristics

Risk

  • ◆ Reduced number of events due to COVID-19 pandemic
  • ◆ Decreased enthusiasm for competition due to rampant cheating
  • ◆ Competing with new titles from other companies

Addressing major opportunities and risks

  • ・Spread of online competitons
  • ・Flexible adjustment of competition rules
  • ・Continous supply of new content with title updates