Fields | 2767 |

Transcription

Fields | 2767 |

R
LAST UPDATE【2016/3/17】
Fields | 2767 |
Research Report by Shared Research Inc.
Shared Research Inc. has produced this report by request from the company discussed in the report. The
aim is to provide an “owner’s manual” to investors. We at Shared Research Inc. make every effort to provide
an accurate, objective, and neutral analysis. In order to highlight any biases, we clearly attribute our data
and findings. We will always present opinions from company management as such. Our views are ours
where stated. We do not try to convince or influence, only inform. We appreciate your suggestions and
feedback. Write to us at [email protected] or find us on Bloomberg.
www.sharedresearch.jp
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Shared Research Report
INDEX
Executive summary -------------------------------------------------------------------------------------------------------- 3
Key financial data ----------------------------------------------------------------------------------------------------- 4
Recent updates --------------------------------------------------------------------------------------------------------- 5
Highlights ----------------------------------------------------------------------------------------------------------------------- 5
Trends and outlook ---------------------------------------------------------------------------------------------------------- 7
Full-year company forecasts --------------------------------------------------------------------------------------------- 12
Long-term outlook --------------------------------------------------------------------------------------------------------- 16
Business ----------------------------------------------------------------------------------------------------------------- 18
Summary ---------------------------------------------------------------------------------------------------------------------- 18
Business description ------------------------------------------------------------------------------------------------------- 19
Business model -------------------------------------------------------------------------------------------------------------- 24
Profitability snapshot and financial ratios --------------------------------------------------------------------------- 26
Strengths and weaknesses ----------------------------------------------------------------------------------------------- 27
Market and value chain --------------------------------------------------------------------------------------------------- 28
Strategy ------------------------------------------------------------------------------------------------------------------------ 32
Historical financial statements ----------------------------------------------------------------------------------- 33
Summary ---------------------------------------------------------------------------------------------------------------------- 33
Income statement ---------------------------------------------------------------------------------------------------------- 42
Balance sheet ---------------------------------------------------------------------------------------------------------------- 43
Cash flow statement ------------------------------------------------------------------------------------------------------- 44
Other information---------------------------------------------------------------------------------------------------- 45
History -------------------------------------------------------------------------------------------------------------------------- 45
News and topics ------------------------------------------------------------------------------------------------------------ 46
Top management----------------------------------------------------------------------------------------------------------- 49
Employees -------------------------------------------------------------------------------------------------------------------- 49
Major shareholders --------------------------------------------------------------------------------------------------------- 50
Shareholder returns -------------------------------------------------------------------------------------------------------- 50
Investor relations ------------------------------------------------------------------------------------------------------------ 50
By the way -------------------------------------------------------------------------------------------------------------------- 50
Company profile----------------------------------------------------------------------------------------------------------- 52
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Executive summary
Changing focus from pachinko and pachislot to IP
◤
The company’s main businesses are planning, developing, and selling pachinko and pachislot machines, as well as
intellectual property (IP).
◤
For long-term growth and expansion, Fields is shifting its focus from pachinko and pachislot machines (its focus since
listing) to IP. The company aims at further expansion through a new growth-oriented business model, with seamless,
cyclical synergies between comics, animation, movie/TV, and merchandizing businesses.
◤
Fluctuations in the company’s results are mainly due to the development and sales of pachinko and pachislot
machines. The company creates contents or acquires merchandising rights to promising contents. It then adds value
through product planning, outsources development and manufacturing to partners, and sells finished
pachinko/pachislot machines as a distributor. As Fields is an independent machine distributor with a nationwide
network, pachinko halls can purchase titles from various makers solely from the company.
Trends and outlook
◤
For FY03/15, Fields reported sales of JPY99.6bn (-13.4% YoY), operating profit of JPY4.7bn (-51.6%), recurring profit
of JPY5.5bn (-43.8%), and net income of JPY3.0bn (-43.8%).
◤
For FY03/16, the company forecasts sales of JPY95bn (-4.6%% YoY), operating profit of JPY1.0bn (-78.9%), recurring
profit of JPY1.0bn (-81.8%), and net income attributable to parent company shareholders of JPY0bn (previously
JPY3.0bn). In the pachinko and pachislot machine industries, all partner companies, including two new ones, are
scheduled to sell products.
◤
Based on its growth-oriented business model, Fields is promoting operations to maximize the value of its IP. To create
and foster IP, from FY03/17 the company aims to develop movies and merchandise based on a IP of several comics
published in Hero’s Monthly, its magazine launched in November 2011.
Strengths and weaknesses
◤
Shared Research sees the company’s strengths as its strong sales force its game planning and development, its brand
creativity, and alliances with top game makers. Weaknesses include its reliance on the amusement business, which is
regulated, and lack of a track record and experience.
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Fields ＞ Key financial data
Key financial data
Income Statement
(JPYmn)
Sales
YoY
Gross Profit
GPM
SG&A
Operating Profit
YoY
OPM
FY03/08
FY03/09
FY03/10
FY03/11
FY03/12
FY03/13
FY03/14
FY03/15
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Est.
101,818
73,035
66,342
103,593
92,195
108,141
114,904
99,554
95,000
19.3%
-28.3%
-9.2%
56.1%
-11.0%
17.3%
6.3%
-13.4%
-4.6%
34,544
24,024
26,889
35,129
31,330
33,279
33,812
28,468
33.9%
32.9%
40.5%
33.9%
34.0%
30.8%
29.4%
28.6%
21,385
22,063
18,764
21,993
22,803
22,964
24,020
23,724
FY03/16
13,158
1,960
8,124
13,136
8,527
10,314
9,791
4,743
1,000
47.1%
-85.1%
314.5%
61.7%
-35.1%
21.0%
-5.1%
-51.6%
-78.9%
12.9%
2.7%
12.2%
12.7%
9.2%
9.5%
8.5%
4.8%
1.1%
11,705
991
7,761
13,684
8,661
10,268
9,765
5,491
1,000
YoY
27.2%
-91.5%
683.1%
76.3%
-36.7%
18.6%
-4.9%
-43.8%
-81.8%
RPM
11.5%
1.4%
11.7%
13.2%
9.4%
9.5%
8.5%
5.5%
1.1%
5,296
-1,481
3,289
7,520
5,991
4,720
5,370
3,018
0
42.7%
-
-
128.6%
-20.3%
-21.2%
13.8%
-43.8%
-
34,700
161.8
1,756.3
50.0
34,700
91.0
1,792.8
60.0
Recurring Profit
Net Income
YoY
Per Share Data (JPY, Thousand Shares, After Stock Split Adjustments)
Number of Shares FY End
EPS
Book Value Per Share
Dividend Per Share
347
15,262.2
128,201.5
4,500.0
347
-42.7
1,173.3
45.0
347
94.8
1,236.5
45.0
347
216.7
1,408.5
50.0
347
172.7
1,539.0
50.0
34,700
142.3
1,644.2
50.0
Cash & Securities　12,841
11,181
15,916
15,873
18,344
23,314
29,583
15,823
Accounts Receivable
12,354
4,324
33,088
27,948
34,402
42,017
29,155
45,888
4,013
963
1,519
1,357
3,134
2,343
3,133
1,736
Total Current Assets
39,559
25,135
56,694
51,051
62,811
72,709
66,921
71,014
Total Assets
0.0
50.0
Balance Sheet (JPYmn)
Inventory
69,168
52,064
81,329
78,971
93,601
106,628
104,869
110,316
Accounts Payable
5,954
1,981
26,610
17,939
29,100
36,604
33,105
33,850
Interest-Bearing Debt
5,006
3,011
2,230
1,834
1,507
1,052
742
4,064
Total Liabilities
22,836
12,568
40,141
31,949
42,046
51,529
46,116
50,070
Shareholders' Equity
44,795
40,420
41,741
47,601
51,895
54,957
58,670
60,171
Net Debt
-7,835
-8,170
-13,686
-14,039
-16,837
-22,262
-28,841
-11,759
Working Capital
10,413
3,306
7,997
11,366
8,436
7,756
-817
13,774
Cash Flow Statement (JPYmn)
Operating Cash Flow
11,127
4,147
8,429
8,005
10,015
13,570
16,322
-9,086
Investment Cash Flow
-14,604
-6,182
-1,011
-4,356
-4,798
-6,263
-8,018
-6,297
-1,384
602
-2,687
-3,915
-2,565
-2,277
-2,018
1,624
5.1%
Financial Cash Flow
Financial Ratios
ROA
17.3%
1.6%
11.6%
17.1%
10.0%
10.3%
9.2%
ROE
11.9%
-3.5%
8.2%
17.1%
12.2%
8.9%
9.5%
5.1%
Equity Ratio
64.8%
77.6%
51.3%
60.3%
55.4%
51.5%
55.9%
54.5%
Source: Shared Research based on company data
Figures may differ from company materials due to differences in rounding methods.
Net Income (*) from FY03/16 onward refers to the net income attributable to parent company shareholders,
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Fields ＞ Recent updates
Recent updates
Highlights
On March17, 2016, Fields Corporation announced changes to two executive positions.
At a board of directors meeting held on March 17, 2016, the company decided on the following changes to two
executive positions, effective from April 1, 2016.
New position
Name
Previous position
President & COO)
Tetsuya Shigematsu
Executive Vice President
Vice Chairman
Takashi Oya
President & COO
On March16, 2016, the company announced the nationwide launch of CR MAJESTIC PRINCE, a pachinko machine
manufactured by Daiichi. This machine is scheduled to be installed in pachinko halls from April 2016 onward.
On March 11, 2016, Shared Research updated the report following interviews with the company .
On March 9, 2016, the company announced the nationwide launch of Pachinko Avengers, a pachinko machine
manufactured by OK. This machine is scheduled to be installed in pachinko halls from April 2016 onward.
On March 8, 2016, the company announced the nationwide launch of Super Street Fighter IV Pachislot Edition a
pachislot machine manufactured by Enterise. This machine is scheduled to be installed in pachinko halls from April 2016
onward.
On February 22, 2016, the company n announced revisions to its full-year forecast for FY03/16.
FY03/16 full-year forecast
▶
▶
▶
▶
Sales: JPY95.0bn (JPY120bn before the revision)
Operating profit: JPY1.0bn (JPY6.0bn)
Recurring profit: JPY1.0bn (JPY6.5bn)
Net income: JPY0 (JPY3.5bn)
Reasons for the revision
As part of the move to make gambling less addictive, the company began the transition towards selling pachinko
and pachislot machines that comply with the new gambling rules in Q3. In Q4, it began selling these machines, but
market demand for the new machines was less than anticipated. Further, as time was needed to transition to the new
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machines and for the machines to undergo testing by the Security Communications Association, the two types of
machines originally planned for release at the beginning of the quarter were pushed back to FY03/17. The company
decided to revise its full-year forecast in accordance with this change. As of February 22, 2016, no changes have been
made to its year-end dividend forecast (JPY25/share).
On February 16, 2016, the company announced the nationwide launch of PACHISLOT Ultraman a pachislot machine
manufactured by Nanashow. This machine is scheduled to be installed in pachinko halls from March 2016 onward.
On January 29, 2016, the company announced earnings results for Q3 FY03/16; see the results section for details.
On January 19, 2016, the company announced the nationwide launch of PACHISLOT Higurashi When They Cry-Kizuna,
a pachislot machine manufactured by D-light. This machine is scheduled to be installed in pachinko halls from March
2016 onward.
On January 6, 2016, the company announced the nationwide launch of PACHISLOT NINJA GAIDEN, a pachislot machine
manufactured by NANASHOW
Corporation. This machine is scheduled to be installed in pachinko halls from February
2016 onward.
On the same day, the company announced the nationwide launch of CR Tengen Toppa Gurren Lagann, a pachinko
machine manufactured by Mizuho Ltd. This machine is scheduled to be installed in pachinko halls from February 2016
onward.
For corporate releases and developments more than three months old, please refer to the News and topics
section.
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Trends and outlook
Quarterly trends and results
Quarterly Performance (cml)
(JPYmn)
Sales
YoY
Gross Profit
YoY
GPM
SG&A Expenses
YoY
SG&A / Sales
Operating Profit
YoY
OPM
Recurring Profit
YoY
RPM
Net Income
YoY
NPM
Quarterly Performance
(JPYmn)
Sales
YoY
Gross Profit
YoY
GPM
SG&A Expenses
YoY
SG&A / Sales
Operating Profit
YoY
OPM
Recurring Profit
YoY
RPM
Net Income
YoY
NPM
Q1
7,459
29.8%
2,790
37.6%
37.4%
5,300
-9.5%
71.1%
-2,509
-2,254
-1,502
Q1
7,459
29.8%
2,790
37.6%
37.4%
5,300
-9.5%
71.1%
-2,509
-2,254
-1,502
-
FY03/15
Q2
Q3
20,341
29,317
-44.1%
-45.9%
6,920
10,513
-49.3%
-45.7%
34.0%
35.9%
10,998
17,113
-4.1%
-1.2%
54.1%
58.4%
-4,077
-6,599
-4,072
-5,633
-2,509
-3,215
FY03/15
Q2
Q3
12,882
8,976
-58.0%
-49.6%
4,130
3,593
-64.5%
-37.1%
32.1%
40.0%
5,698
6,115
1.5%
4.5%
44.2%
68.1%
-1,568
-2,522
-1,818
-1,561
-1,007
-706
-
Q4
99,554
-13.4%
28,468
-15.8%
28.6%
23,724
-1.2%
23.8%
4,743
-51.6%
4.8%
5,491
-43.8%
5.5%
3,018
-43.8%
3.0%
Q1
17,140
129.8%
4,950
77.4%
28.9%
5,956
12.4%
34.7%
-1,005
-864
-867
-
Q4
70,237
15.7%
17,955
24.2%
25.6%
6,611
-1.3%
9.4%
11,342
46.3%
16.1%
11,124
44.5%
15.8%
6,233
50.4%
8.9%
Q1
17,140
129.8%
4,950
77.4%
28.9%
5,956
12.4%
34.7%
-1,005
-864
-867
-
FY03/16
Q2
Q3
50,255
71,628
147.1%
144.3%
13,848
20,258
100.1%
92.7%
27.6%
28.3%
11,964
18,090
8.8%
5.7%
23.8%
25.3%
1,884
2,168
3.7%
3.0%
1,930
2,195
3.8%
3.1%
706
779
1.4%
1.1%
FY03/16
Q2
Q3
33,115
21,373
157.1%
138.1%
8,898
6,410
115.4%
78.4%
26.9%
30.0%
6,008
6,126
5.4%
0.2%
18.1%
28.7%
2,889
284
8.7%
1.3%
2,794
265
8.4%
1.2%
1,573
73
4.8%
0.3%
Q4
FY03/16
% of FY
FY Est.
75.4%
95,000
-4.6%
216.8%
1,000
-78.9%
219.5%
1,000
-81.8%
-
0
-
Q4
Company estimates are the most recent released figures.
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Pachinko/pachislot machine sales
FY03/15
(cml)(units)
Q1
Q2
Pachinko/pachislot machines
44,197
YoY
138.9%
-40.6%
Total pachinko machines
38,540
73,910
200.1%
-33.0%
-15.0%
YoY
Bisty
OK
YoY
-33.7%
118,134
399,691
1.7%
302,406
85.7%
Q1
44,409
0.5%
Q2
134,531
Q3
15,684
64,954
-59.3%
-12.1%
43.7%
126,913
7.4%
25,556
65,565
159,778
9,092
24,436
35,208
35,244
114,597
1,365
1,365
1,365
-
-
-
4,898
86
22,108
34,701
69,053
-
-
-
-
-
7,275
7,275
5,177
13,146
17,325
23,133
5,141
9,770
14,519
5,657
28,209
35,381
97,285
28,725
69,577
93,614
-54.2%
-61.8%
-57.7%
407.8%
146.6%
164.6%
42,566
-
-
41,370
1.7%
Rodeo
-
-
3,239
20
20
20
20
23,967
26,576
-
-
-
20,084
116
116
116
4,460
24,401
24,467
24,467
2,670
39,875
42,825
66
66
66
66
-
-
-
-
-
-
-
-
-
4,510
1,111
3,722
7,589
10,082
1,972
3,010
4,793
1
2
3
8
2
8
13
Pachinko
1
1
2
5
1
5
7
Pachislot
-
1
1
3
1
3
6
Bisty
NANASHOW
Enterrise
Mizuho
Other
Titles
FY03/15
(quarterly)(units)
Q1
Q2
57,922
FY03/16
Q3
Pachinko/pachislot machines
44,197
YoY
138.9%
-62.2%
-14.0%
Total pachinko machines
38,540
35,370
44,224
51,396
53.9%
Q4
246,176
52.6%
184,272
Q1
44,409
0.5%
15,684
YoY
200.1%
-63.7%
671.8%
-59.3%
Bisty
3,533
22,023
40,009
94,213
9,092
OK
Q2
90,122
55.6%
49,270
39.3%
15,344
Q3
67.3%
61,959
40.1%
44,617
29,830
5,378
36
79,353
1,365
-
-
-
-
-
4,898
86
22,022
12,593
Daiichi
-
-
-
-
-
7,275
-
Other
YoY
5,177
7,969
4,179
5,808
5,141
4,629
4,749
5,657
22,552
7,172
61,904
28,725
40,852
24,037
-59.7%
407.8%
1.7%
Rodeo
Bisty
NANASHOW
Enterrise
-55.0%
-
3,239
39,327
-
-
-
20
-
-
-
23,967
2,609
14,794
235.2%
-
-
-
20,084
116
-
-
4,460
19,941
66
-
2,670
37,205
2,950
Mizuho
Other
-76.9%
-
81.1%
66
-
-
-
-
-
-
-
-
-
-
-
-
4,510
1,111
2,611
3,867
2,493
1,972
1,038
1,783
1
1
1
5
2
6
5
1
3
1
4
2
2
1
2
3
Titles
Pachinko
Pachislot
1
1
Q4
85,996
Mizuho
Total pachislot machines
Q4
220,527
31.7%
3,533
Daiichi
Total pachislot machines
153,515
Q4
29,830
Mizuho
Other
102,119
FY03/16
Q3
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Pachinko/pachislot market trends
Market trends (cml.)
FY03/15
(units)
FY03/16
Q1
Q2
Q3
Q4
Q1
Q2
Q3
80.1
169.8
256.9
335.1
79.4
160.4
246.1
-6.1%
-5.6%
-9.1%
-7.1%
-0.9%
-5.5%
-4.2%
49.3
107.1
171.2
220.6
50.7
105.6
159.7
YoY
-1.6%
-4.2%
-3.2%
-0.1%
2.8%
-1.4%
-6.7%
30.8
62.7
85.7
114.5
28.7
54.8
86.4
YoY
-12.5%
-7.9%
-18.9%
-18.2%
-6.8%
-12.6%
0.8%
Total pachinko/pachislot machines
YoY
Pachinko
Pachislot
FY03/15
Market trends (quarterly)
(units)
FY03/16
Q1
Q2
Q3
Q4
Q1
Q2
Q3
80.1
89.7
87.1
78.2
79.4
81.0
85.7
-6.1%
-5.2%
-15.1%
-0.1%
-0.9%
-9.7%
-1.6%
49.3
57.8
64.1
49.4
50.7
54.9
54.1
YoY
-1.6%
-6.3%
-1.4%
12.3%
2.8%
-5.0%
-15.6%
30.8
31.9
23
28.8
28.7
26.1
31.6
YoY
-12.5%
-3.0%
-38.8%
-16.0%
-6.8%
-18.2%
37.4%
Total pachinko/pachislot machines
YoY
Pachinko
Pachislot
Q4
Q4
Q3 FY03/16 results
▶
▶
▶
▶
Sales:
JPY71.6bn (+144.3% YoY)
Operating profit: JPY2.2bn (versus loss of JPY6.6bn)
Recurring profit: JPY2.2bn (versus loss of JPY5.6bn)
Net earnings attributable to parent company shareholders:
JPY779mn (versus loss of JPY3.2bn)
Cumulative Q3 SG&A expenses were JPY18.1bn (+5.7% YoY). While it launched three new pachinko and pachislot
machine titles a year earlier, the company put 13 new pachinko/pachislot titles on the market in the nine-month period to
Q3, leading to a rise in selling expenses. However, a key issue for the company has been to reduce SG&A expenses over a
two to three year period from FY03/16, and initiatives to realize this goal are proceeding steadily.
In cumulative Q3 of FY03/16 (April through December 2015), a total of 136 titles were launched in the pachinko machine
market (compared to 145 a year before). Since November 2015, the pachinko industry voluntarily adopted regulatory
changes to the lower limit of the pachinko machine jackpot probability range to 1/320 (from 1/400 until October 2015).
There appears to have been a rush to sell new titles prior to the adoption of the regulations, and as a result, total sales for
pachinko game machines contracted to 1,597,000 units (-6.7% YoY).
In the pachislot machine market, a total of 71 titles were launched through Q3 (compared to 59 a year before). Since
December 2015, the industry has adopted voluntary regulations requiring a sub-board program that controls token
discharge to be incorporated into the main circuit board. There appears to have been a rush to sell new titles prior to the
adoption of the regulations, and as a result, total sales in the pachislot machine market through Q3 were 864,000 units
(+0.8% YoY).
In the cumulative Q3 period, Fields launched seven pachinko machine titles (compared to two titles a year earlier) and six
pachislot machine titles (compared to one title a year earlier). Total game machine sales were 220,527 units (+43.7%
YoY), of which pachislot machines were 93,614 units (+164.6% YoY) and pachinko machines were 126,913 units
(+7.4%). The sales growth was due to the rise in new titles of both pachinko and pachislot machines. Main contributing
titles were the EVANGELION series in pachinko machines and EVANGELION - Spear of Hope (sales of 26,000 units) and
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Pachislot Biohazard 6 (35,000 units) in pachislot machines.
Titles sold or in use (as of January 29, 2016)
Pachinko machines
Delivery month
CR EVANGELION 9 Type zero version
May 2015
CR Million God Rising
July 2015
CR Martian Successor NADESICO
August 2015
CR Sakigake Otokojuku
August 2015
CR EVANGELION X
September 2015
CR Midoridon Hanabi DE Buon giorno
November 2015
CR Million God Rising—ZEUS II
December 2015
CR Tengen Toppa Gurren Lagann,*
February 2016
Pachislot machines
Delivery month
EVANGELION – Spear of Hope
June 2015
Resident Evil 6
July 2015
Asura's Wrath
September 2015
Majestic Prince*
November 2015
Oh My Goddess!*
November 2015
EVANGELION―Tamashii wo Tsunagumono *
December 2015
Pachislot Mobile Suit Gundam Awakens—Chained Battle
January 2016
Pachislot Ninja Gaiden*
February 2016
Pachislot When Cicadas Cry—Connections *
February 2016
Note: Asterisk denotes titles being marketed as of January 29, 2016.
Measures to create and commercialize IP
The company's medium/long-term strategy calls for serializing IP in characters and storylines for use across multiple
platforms and formats.
◤
In comics, the company is focusing on IP development with the aim of expanding IP in cross-media formats,
primarily through the comic Hero's Monthly. The magazine has released 56 titles of IP since November 2011. The
Ultraman series, which appears in Hero's Monthly, has thus far been publish it seven separate volumes that together
have sold more than two million copies. As part of its cross-media push, the company is rolling out pachislot
machines based on its Tengen Toppa Gurren Lagann series, with deliveries of the new machines slated to begin in
February 2016. The company is also working to commercialize a number of other titles through video projects,
games, pachinko/pachislot machines and other products.
◤
In visual media, the company has decided to put on a theatrical production of Ultraman X. In addition to the
domestic market, Fields is also making use of the Ultraman series for advertising and products aimed at the
Southeast Asian market. On television, broadcasting of "Active Raid: Public Mobile Assault Unit Eight" and "Grimgar:
Ashes and Illusions" anime series began in January this year, and the company is planning to commercialize these
titles across a number of other platforms and media formats going forward.
◤
In visual media, the conventional method of creating TV animation and other products is to establish a consortium in
which a video maker and TV broadcasters take part as investors. In contrast, some titles for which Fields is creating
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visual media products are financed for the most part by video distribution companies on the internet. The company
plans to utilize this kind of scheme as a way to expand merchandising.
◤
In social games, the company released two new titles in December 2015 and provides users with services for eight
titles. It is now concentrating on boosting the profitability of these and other existing titles going forward. Below is a
list of titles currently in service.
Social game titles in service (as of January 29, 2016)
Social game title
Start of service
AKB48 Stage Fighter
October 2011
AKB48 Ambitions
January 2013
AKB48 Musical Game for Group
May 2014
Freezing Vibrations—Stigmata Wings
December 2014
Animal X Monster
March 2015
Tower of Princess
August 2015
Soul of Princess
December 2015
Guardian Violations
December 2015
Note: Includes licensed titles.
◤
In the live entertainment field, the company is still running its live "Heros Show" featuring the Ultraman series and
other live shows. Going forward, the company plans to stage these live performances in Japan and in five other Asian
countries.
For details on previous quarterly and annual results, please refer to the Historical financial statements section.
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Full-year company forecasts
FY03/16 Company Estimates
(JPYmn)
Sales
YoY
CoGS
Gross Profit
YoY
GPM
SG&A Expenses
SG&A/Sales
Operating Profit
YoY
OPM
Recurring Profit
YoY
RPM
Net Income
YoY
1H Act.
20,341
FY03/15
2H Act.
79,213
FY Act.
99,554
1H Act.
50,255
FY03/16
2H Est.
44,745
FY Est.
95,000
0.9%
-13.4%
-49.5%
-43.5%
-4.6%
-44.1%
13,420
6,920
57,666
21,548
71,086
28,468
36,407
13,848
-49.3%
6.9%
-15.8%
100.1%
34.0%
27.2%
28.6%
27.6%
10,998
12,726
23,724
11,964
54.1%
16.1%
23.8%
23.8%
1,884
-884
1,000
-
15.8%
-51.6%
-
-
-78.9%
-
11.1%
9,563
5,491
-
25.5%
-43.8%
-
12.1%
5,527
5.5%
3,018
-
40.4%
-43.8%
-4,077
-4,072
-2,509
8,820
4,743
4.8%
3.7%
1,930
-
1.1%
-930
1,000
-
-
-81.8%
3.8%
936
-
-936
1.1%
-
-
-
0
Source: Shared Research based on company
Revision to full-year earnings forecasts
Fields revised its full-year forecasts for FY03/16 on February 22, 2016.
Fields’ full-year earnings forecasts for FY03/16 are as follows:
Sales:
JPY95.0bn (-4.6% YoY)
Operating profit:
JPY1.0bn (-78.9% YoY)
Recurring profit:
JPY1.0bn (-81.8% YoY)
Net income attributable to parent shareholders:
JPY0.0 (net income of JPY3.0bn in FY03/15).
The company lowered its initial annual estimate for sales by JPY25bn, that for operating profit by JPY5bn, that for recurring
profit by JPY5.5bn, and that for net income by JY3.5bn. It left its term-end dividend payment forecast unchanged at JPY25
per share.
Reasons for the revision are as follows. As both pachinko and pachislot machines sold in the game machine industry
shifted to the new standards in Q3, the company has been selling machines complying with the new standards in Q4.
However, there have been gaps between the company’s estimate on market demand for new machines and actual orders
received. Moreover, the company put off the launch of two new titles, which it had planned to sell in Q4, to FY03/17
because it takes more time for the Security Communication Association to test new machines with the migration to the
new standards.
In the pachinko/pachislot field, Fields aims to increase both its total unit sales and market share with plans to sell products
from two new machine manufacturers, in addition to sales of products from all existing partner manufacturers. It
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introduced only five new pachinko and three new pachislot machines in FY03/15, but plans to introduce ten new
machines for each of these two categories in FY03/16. Unit sales for each title are not expected to exceed 100,000.
In the cumulative Q3 period, Fields launched seven pachinko machine titles (compared to two titles a year earlier) and six
pachislot machine titles (compared to one title a year earlier). In Q4, the company plans to put a maximum six
pachinko/pachislot machine titles on the market (compared to five titles a year earlier).
The company’s previous forecast called for total unit sales of pachinko/pachislot machines to remain flat year-on-year, but
revisions to its full-year forecast indicate it now expects a decrease year-on-year.
In the social games field, the company plans to make progress addressing the gambling nature of existing machine titles,
while introducing new titles with a high degree of novelty. It also plans to reduce the number of titles offered and focus
efforts on major titles.
Owing mainly to the decline in unit sales of pachinko/pachislot machines, Fields expects operating and other profits to
decline from the previous year. The company plans to continue shrinking SG&A expense over the next few years.
SG&A expense increased from JPY17.4bn in 2006 to JPY23.7bn in FY03/15. However, the company plans to review all
business segments and streamline its business structure. Specifically, it will reconsider investments in businesses and fields
where future growth is in doubt, while pouring more money than before into those businesses and fields where increased
investment is warranted. In doing so, it aims to reduce overall SG&A expenses. In FY03/16 it will apparently also rework
sales promotion costs.
Effect of measures to curb gambling nature of pachinko machines
In an effort to reduce the attraction of pachinko as a form of gambling and restore its popularly as a form of
entertainment, the pachinko machine manufacturers association (the Japan Game Machine Industry Association) agreed
to change the lower limit of the pachinko machine jackpot probability range to 1/320 (from 1/400 as of May 2015).
Effective November 2015, this self-imposed regulatory change means that game machine manufacturers will no longer be
able to sell max-type machines (jackpot probability of 1/370–1/399) that were the mainstay at pachinko halls prior to
October 2015.
From May 2016, the Game Machine Industry Association is also likely to voluntary introduce a lower maximum occurrence
of a game feature called “probability fluctuation” (the jackpot rate after a successful a jackpot) from around 80% to 65%.
This latest self-regulatory move was precipitated by the growing demand for max-type machines (jackpot probability of
1/370–1/399) among hard-core pachinko players, which had led pachinko parlors to install more and more of these
machines to the point that max-type machines now account for more than 40% of all machines in pachinko parlors. As
this pushed up the average cost of playing pachinko, the number of people playing game machines declined and the
industry sought to tighten industry standards to reduce the appeal of pachinko as a form of gambling with the hope of
bringing back more players into pachinko halls.
Fields believes that changing the lower limit of the pachinko machine jackpot probability range to 1/320 will be good for
the industry over the longer term, as it will allow game machine players on a tight budget to play longer that they could
on the max-type machines.
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Shared Research sees a number of different ways in which pachinko machines can be differentiated, including not only
mechanical specifications that effect the payout (the jackpot probability, the hit rate, etc.) but also the appearance of the
game machine itself (video images, contents, gadgets, etc.). As machines with middle-to-low jackpot probabilities
(between 1/150 and 1/319) become the mainstay of pachinko hall installation/operations after November 2015, Shared
Research sees game machine manufacturers turning more towards imagery, contents, and gadgets to differentiate their
machines. As Fields already as collaborative relations with a number of different game machine manufacturers and is able
to develop and procure character IP, a move by the market to middle-type machines that provide users with more
entertaining features (such as video images, contents, moving gadgets, and music,) would appear to play to the
company's strength. Thus, this change to the lower limit of the pachinko machine jackpot probability range can be seen
as a positive development for Fields.
Moreover, Shared Research believes that there may be demand for replacement of pachinko machines since 2016 as
“improper game machines” are removed due to the “nail problem” in some machines.
Pachinko machines have to be tested and certified by the Security Communication Association. The “nail problem” was disclosed in a survey
of nails on pachinko machines conducted since June 2015 by the organization to promote the entertainment industry’s soundness. The survey
found that pachinko machines, which had been submitted for testing by makers, may show different performances from those shipped to
pachinko parlors. Industry groups, including the Japan Game Machine Industry Association, plan to remove those improper machines from
parlors 2016.
Impact of voluntary industry restrictions on pachislot machines
In September 2014, the Security Communication Association changed its testing methodology for pachislot machines.
Previously, pachislot machines had to register a ball put-out ratio of 55% (11 out of 20) or better during a random test
run. The new standard called for the same minimum ball put-out ratio to be scored during testing for the lowest possible
ball put-out ratio. That same month, the pachinko machine manufacturers association (the Japan Game Machine Industry
Association) adopted a new standard that would prohibit penalty features in machines and also mandated that machine
makers switch to motherboards with AT/ART functionality.
Prior to this change, pachislot machines incorporated a main circuit board and a sub board, both of which controlled the
payout rate of game tokens. Effective December 2015, the new industry standard requires the sub-board program that
controls ball discharge to be incorporated into the main circuit board.
Judging from what has happened in the past, Fields believes there is no need to be overly concerned about the impact of
changes in the industry's self-regulatory standards on overall sales of pachislot machines. In 2004, for example,
restrictions on the ball discharge rate resulted in a decline in pachislot machine sales from more than 178,000 units in
2005 to a little over 76,000 units in 2009. However, with the help of improvements by manufacturers that boosted the
entertainment value of pachislot machine, by 2013 pachislot machine were back up to 139,000 units.
Fields believes that the industry will make gradual changes to its self-regulatory standards in the years ahead, and these
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changes will further reduce the appeal of pachislot machines as a form of gambling. However, since this will only serve to
reduce the variability in ball discharge rates between different machines, the company expects performance, IP, and other
features to become the primary basis for product differentiation. As Fields has long emphasized performance, IP, and
other features rather than pay-out specifications that appeal to gamblers, the company believes that the competitive
environment will work in its favorable over the medium term.
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Long-term outlook
Fields aims to maximize the value of its intellectual property via a “growth-oriented business model” (benefiting from
seamless synergy between comics, animation, movie/TV, and merchandizing segments). Over the medium term, the
company will focus on stable profit growth in pachinko and pachislot machines, and cultivating in-house and acquired
content. As of May 2015, the company was preparing a medium-term business plan for reforming its business structure.
When considering Field’s growth strategy and vision for its future across different types of content, Shared Research will
be paying close attention to whether the company can make its new business model a reality. In particular, Shared
Research will focus on whether the company can maximize the value of intellectual property created in-house and start a
virtuous cycle across business operations. In our view, pachinko/pachislot machines will continue to be the main driver of
profits, and we expect the expanded range of these products for FY03/17 will significantly contribute to medium term
earnings. Shared Research also thinks merchandising based on its own IP portfolio, growth at Tsuburaya Productions, and
policies for reducing SG&A expenses will all contribute to consolidated earnings.
Expanding the pachinko/pachislot product range
Since 2001—when Fields made an exclusive third-party sales agreement with Rodeo Corp. for pachislot machines—the
company has gradually increased the number of partner firms. In FY03/14, Fields retailed 13 different types of
pachinko/pachislot machines.
From FY03/17, Fields will no longer sell pachinko/pachislot machines manufactured by Rodeo Corp., with whom the
company is ending a partnership. However, the company plans to increase the range of machines from other partner
firms. Also, the company agreed on partnerships with D-light Co., Ltd. in April 2013 and NANASHOW Corporation in April
2014. According to the company, the increase in product range also encompasses intellectual property rights to Hero’s
Monthly and new content rights. The company is aiming for average sales of about 30,000 units per machine.
In June 2015, Fields acquired game machine makers Aristocrat Technologies and Spiky Corporation, making them wholly
owned subsidiaries, and promptly set about developing new products that made use of the hardware and software assets
owned by both companies.
Company is planning on introducing approximately 10 new pachinko machine models and roughly the same number of
pachislot machine models in FY03/16 and, at its Q2 results presentation, indicated that it planned to introduce about five
new pachinko machine models and five new pachislot machine models in each of the following three years.
The company has expanded its sales force by about 100 since the end of FY03/12 and currently has a sales force of
roughly 400. Having strengthened its sales structure over the past several years, the company is planning to make a major
marketing push in the year ahead, and aided by a stronger product lineup, expects to increase unit sales next fiscal year.
Merchandising based on own IP portfolio
Fields explains that converting its IP portfolio into merchandising revenue typically takes between three to five years for
books and motion picture releases. For instance, the company expects several series releases and a merchandising rollout
based on Hero’s Monthly (a comic magazine launched in November 2011) from FY03/17. The company expects to
develop visual and merchandise for several of these works. As of May 2015, Hero’s Monthly has published 49 different
works. Of these, the company is developing visual content for seven works including SOUL ReVIVER and Sword Guy
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Katana, games for six works, and pachinko/pachislot machines for three works.
Growth at Tsuburaya Productions
Tsuburaya Productions owns the influential Ultraman series, and produces movies and TV programs in addition to
conducting licensing operations.
Profits fell and the financial situation worsened at Tsuburaya Productions from the late 1990s onward, as the cost of
producing new content rose, leading Tsuburaya Productions to restructure its finances in the early 2000s. Fields acquired
a 51.0% stake in Tsuburaya Productions in April 2010, making it a consolidated subsidiary.
The aim is to increase overseas gross profit from JPY150mn in FY03/15 to JPY550mn in FY03/18 with Tsurubaya
Productions selling TV programs, planning new works, and staging events overseas.
Reducing SG&A expense
For two to three years from FY03/16, the company plans to review all business segments and streamline its business
structure. Specifically, it will reconsider investments in businesses and fields where future growth is in doubt, while
pouring more money than before into those businesses and fields where increased investment is warranted. In doing so,
it aims to reduce overall SG&A expense. It plans to reduce SG&A expense each fiscal year for the next few years.
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Fields ＞ Business
Business
Summary
The company has two main businesses: the planning, development, and distribution of pachinko/pachislot machines; and
the planning, development, and distribution of intellectual property (IP).
Up until FY03/12, the company had four reportable segments: Pachinko/Pachislot (PS) Field, Mobile Field, Sports
Entertainment Field, and Other Field. However, the company has announced its decision to shift away from its traditional
business model focusing on the PS Field and move into a new model underpinned by IP. In line with that decision, the
company aims to grow further by rebuilding strategies based on the “growth-oriented business model” (seamlessly
synergistic business development involving Comics, Animation, Movie/TV, and Merchandising). Accordingly, in FY03/13,
the company consolidated the previous four segments to form a single segment centered on IP.
Developing Business Model
Source: Fields
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Fields ＞ Business
Business description
Fields operates a “circular” business, based on four categories of product that interact with each other.
Comics
Comics are the source of the company’s IP. Through the Comics business, the company creates and acquires original
work, stories, and characters.
HERO’S Inc., a joint venture with Shogakukan Creative Inc., publishes the comic Hero’s Monthly. First launched on
November 1, 2011, the company distributes Hero’s Monthly through pachinko halls and convenience stores run by
Seven-Eleven Japan Co., Ltd., a subsidiary of Seven & i Holdings Co., Ltd. (TSE1: 3382). The magazine creates is the
source of heros and other characters, and the company develops related IP, such as comics and films, through
collaborations with partner companies and networks.
Plans to produce movies or other visual products are already underway for several IP items created from Hero’s Monthly.
In July 2014 the company began writing the script for the SOUL ReVIVER television series for Hollywood (US).
Animation
In this business, the company makes animation films based on popular comics and other media.
The company tries to strengthen its IP by joining planning and production and supporting renditions and effects that
feature characters of products, as in the case of “Ginga Kikotai: Majestic Prince,” published in Monthly Hero’s, made into
an animated series on television, and sold in Blu-ray and DVD packages,.
Movie/TV
Through movies and TV series, the company increases the market recognition for related works and maximizes values. For
example, movie production subsidiary Tsuburaya Productions Co., Ltd. produces movies and TV programs for the
Ultraman series while spreading the use of Ultraman characters in many forms of media. The company aims to grow
Ultraman a global-scale character, and to this end it plans to cooperate with powerful business partners.
Merchandizing across media—the lateral development of IP
Fields generates revenue from IP by merchandizing it in interactive media such as games, mobile content, social network
services, in addition to consumer products and pachinko and pachislot machines.
Interactive Media
For pachinko/pachislot-related contents and development, and operation of social games, the company provides
websites Fields Mobile (for feature phones) and 7link (for smartphones).
Consumer Products
The company plans, develops, and sells IP-based goods through its own store network while promoting IP merchandising
on pachinko/pachislot machines. Subsidiary Total Workout Premium Management Inc. runs a fitness club business,
provides media-related management services to professional athletes, and offers special fitness support services for
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Fields ＞ Business
particularly health-conscious members.
Planning, Development, and Distribution of Pachinko/Pachislot Machines
This is the stable cash-flow source in the company’s Merchandising business.
As a fabless entity, the company creates contents or acquires merchandising rights to promising contents in Japan and
overseas. It then adds value through product planning, outsources development and manufacture to partners, and sells
finished pachinko/pachislot machines as the sales agent or distributor. Although it does sell machines made by
non-partners, most machines are made by partners.
Fields’ added value comes from its ability to obtain and combine proprietary content to plan and develop
pachinko/pachislot machines. Because the company is the largest independent distributor with a national sales network,
its customers enjoy the benefit of purchasing titles from several different manufacturers through a single sales contact. Its
sales force has compiled a database about market trends and best practices. The company shares this accumulated
knowledge with pachinko halls, fostering customer loyalty. Pachinko/pachislot machines require roughly two to three
years from content search, study, and acquisition to finished product delivery.
Manufacturing, development, and distribution flow
(as of December 31, 2015)
(number in brackets is the investment ratio)
Affililated company
Consolidated subsidiary
Cross Alpha
(formerly
Aristocrat
Technologies)
Spiky
*1
Universal
Entertainment
Group
Mizuho
NANASHOW
Alliance manufacturer
Sammy Group
SANKYO Group
KYORAKU SANGYO
Group
Daiichi Shokai
Group
CAPCOM Group
RODEO
Bisty
OK!!
D-light
Enterrise
TV, movies, animation, sports, etc.
Rights/product planning and development
Development and production
Development and production
Sales
Pachinko halls
Source: Company data
*1: made a subsidiary along with Cross Alpha (formerly Aristocrat Technologies), as a wholly-owned subsidiary of Aristocrat Technologies
The company sells pachinko/pachislot machines in two ways. In distribution sales, the company sells directly to pachinko
halls via its regional and branch offices. It uses this sales method for most of the pachislot machines and some of pachinko
machines it sells. In the agency sales method used for pachinko machines, the company serves as sales broker.
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Fields ＞ Business
Sales and profit reporting
<Agency sale>
Manufacturers
<Distribution sale>
Manufacturers
Commission
payment
Commission
payment
Manufacturing
cost
Machine
sales
Agency
commission Gross
sales
profit
(Recorded
the following
month)
Manufacturing
cost
Cost of
machine's
purchase
Whole
sales
Machine
sales
Gross
profit
Commission
payment
Gross
profit
Gross
profit
<Price:¥250,000-¥400,000>
<Price:¥250,000-¥450,000>
(Recorded
the same
month)
Source: Company data
In distribution sales the company purchases machines from machine makers and sells them to pachinko halls. In agency
sales, acting as a sales broker for machine makers, the company creates transaction agreements between machine makers
and pachinko halls, collects payments from pachinko halls, prepares for pachinko hall openings, and provides after-sales
services. By doing so, the company receives commissions from machine makers. Sales are booked differently in the two
methods. This means that the company’s sales are a function of the composition of distribution and agency sales.
▶
Distribution sales: Machine sales to pachinko halls are booked as sales in the month of sales. Payments for machines
purchased are booked as CoGS.
▶
Agency sales: Commissions received from machine makers upon machine sales are booked as sales in the following
month of sales.
As of March 31, 2014, the company had more than 300 sales staff at seven regional offices and 26 branch offices
nationwide. The company’s salespeople cover approximately 40 accounts each. Salespeople employ a “consulting sales”
approach where they contribute to efficient pachinko hall management. The company has machine showrooms in all of
its branch offices. Fields utilizes two distribution channels. The first is a direct channel (selling directly to hall operators);
around 70% of machines are sold using the direct channel. The second is sales through resellers; this channel is lower
margin than the direct channel, but sometimes makes economic sense due to the small size or geographic location of end
customers.
The company has been expanding its distribution channels since FY03/13. From FY03/15, Fields aims to establish seven
regional and 37 branch offices nationwide while expanding its sales team (400 staff in total). The number of pachinko and
pachislot halls under a salesperson’s coverage will be reduced, and access time to such hall operators shortened. The
company aims to strengthen its sale support to affiliated pachinko and pachislot machine manufacturers. Machine
volumes are the main swing-factor for earnings (see chart below). It is focusing on staff training at its branch stores amid
uncertain industry conditions.
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Fields ＞ Business
Operating profit vs. unit sales
（'000 units）
(JPY mn)
20,000
600
18,000
500
16,000
14,000
400
12,000
10,000
300
8,000
200
6,000
4,000
100
2,000
0
0
FY03/06
FY03/07
FY03/08
FY03/09
FY03/10
FY03/11
Operating Profit
FY03/12
FY03/13
FY03/14
FY03/15
Pachinko/Pachislot Sales (unit)
Strategic partnerships
The company partners with key machine manufacturers to jointly promote wide-ranging machine brands. For these
manufacturers, the company acts as the sole distribution agent.
◤
Rodeo Corp.: Subsidiary of Sammy Inc. under Sega Sammy Holdings Inc. (TSE1: 6460), equity-method affiliate of
Fields (Sammy: 65.0%; Fields: 35.0%). Pachislot focus. Following its exclusive third-party sales agreement for
pachislot machines in 2001, the company bought a stake in Rodeo Corp. in 2002. Owns hit titles such as
SALARYMAN KINTARO and Onimusha: Dawn of Dreams.
◤
Bisty Co., Ltd.: Subsidiary of SANKYO Co., Ltd. (TSE1: 6417), Fields’ partner pachinko/pachislot machine
manufacturer. Since its tie-up in 2003, Bisty has developed a variety of titles including the Evangelion series.
◤
OK Co., Ltd.: Tie-up with KYORAKU SANGYO (unlisted) in February 2008. Fields and KYORAKU SANGYO jointly
launched new brand “OK” to create a new pachinko market and expand the pachinko fan base. It owns hit titles
such as Pachinko Ultra Battle Retsuden.
◤
Enterrise Co.: Subsidiary of Capcom Co., Ltd. (TSE1: 9697), a leading video game company, Fields’ partner. Fields
began sales of Enterrise pachislot machines in 2010, as the exclusive retailer. Hit titles include the Sengoku BASARA
series and Biohazard 5 series.
◤
Mizuho Corp.: Fields and signed a joint business agreement with Universal Entertainment Corp. (JASDAQ: 6425)
and Mizuho in 2011. Fields acquired a 49.8% stake in Mizuho in 2012, and will begin retailing Mizuho pachislot
machines in 2014.
◤
D-light Co., Ltd.: Founded in 2000 as a second brand for Daiichi Shokai Co., Ltd. (unlisted). Business alliance
agreed upon with Fields in 2014.
◤
NANASHOW Corp.: Established in 2009. Fields bought a stake in NANASHOW in 2014 (38.9%). Business alliance
agreed upon with Fields in 2014. It launched sales of Pachislot BERSERK, a top title in 2015.
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Fields ＞ Business
Sales by Brand
FY03/09
FY03/10
FY03/11
FY03/12
FY03/13
FY03/14
FY03/15
(Units)
Rodeo
YoY
% of sales
Bisty
YoY
% of sales
41,536
28,762
121,691
81,820
104,549
26,505
42,566
-67.5%
-30.8%
323.1%
-32.8%
27.8%
-74.6%
60.6%
12.5%
6.4%
25.3%
19.8%
31.9%
6.7%
10.6%
262,087
363,056
306,585
263,530
114,092
173,630
159,778
-20.6%
38.5%
-15.6%
-14.0%
-56.7%
52.2%
-8.0%
79.1%
80.7%
63.8%
63.9%
34.8%
44.2%
40.0%
Enterrise
2,498
YoY
% of sales
0.6%
16,119
7,264
47,889
72,085
24,467
545.3%
-54.9%
559.3%
50.5%
-66.1%
3.4%
1.8%
OK
14.6%
18.3%
6.1%
32,437
28,790
114,597
-11.2%
298.0%
7.3%
28.7%
YoY
% of sales
9.9%
Mizuho
54,127
YoY
4,964
-90.8%
NANASHOW
20,084
YoY
Others
27,582
55,564
35,878
59,776
29,143
37,845
33,235
YoY
2.5%
101.5%
-35.4%
66.6%
-51.2%
29.9%
-12.2%
331,205
449,880
480,273
412,390
328,110
392,982
399,691
-31.6%
35.8%
6.8%
-14.1%
-20.4%
19.8%
1.7%
Total
YoY
Major hit titles, such as the Evangelion series developed jointly with SANKYO subsidiary Bisty, are significant earnings
drivers for Fields. By the end of FY03/13, Fields had sold more than 2.0mn machines based on Evangelion-related IP.
Evangelion is a hit animation franchise that has gained further popularity since the release of a four-part movie series,
Rebuild of Evangelion in 2007. The series rose to popularity in 1995–1996 when 26 episodes of the show were broadcast
on TV Tokyo. As of May 2015, the first three series have been produced and released.
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Fields | 2767 |
Fields ＞ Business
Business model
Based on the “growth-oriented business model,” Fields is pushing efforts to maximize the value of its IP portfolio. The
“growth-oriented business model” will have the following cornerstones. Through synergies of these cornerstones, the
company aims to maximize the value of its IP portfolio and realize continuous, organic business expansion.
▶
▶
▶
▶
Comics: Acquire/create content (original titles, stories, characters, etc.)
Animation: Raise the added value of content through CG and other leading-edge technologies
Movies/TV series: Spread animated content in the market and expand fan base
Merchandising/commercialization (games, media, SNS, consumer products, pachinko/pachislot): Use IP
effectively in each sector to improve profitability
Some examples of how the company is working to acquire and generate IP include Hero’s Monthly, “BERSERK” and
“Ultraman.” The company intends to use such IP assets in various media to accelerate its fan base growth from FY03/13
onward. For instance, the business model for Hero’s Monthly is to target profits by first starting with comics and from
there move to animation, television series and movies, and ultimately to merchandising, SNS, consumer products, and
new pachinko/pachislot titles. The company hopes to increase the number of fans in all of these fields, raise the value of
its IP, generate profit, and then again pour these results back into comics.
Group companies
Fields Group companies operate in a variety of areas, such as comics, animation, mobile, and pachinko/pachislot
machines. As of June 2015, the company had 16 subsidiaries, 9 equity-method affiliates, and one related company. Main
group companies are listed below (when joined the group; Fields’ stake).
Comics
▶
HERO’S Inc. (April 2010; 49.0%): Plans, produces, and manages comic magazines and character contents
Animation
▶
▶
Lucent Pictures Entertainment, Inc. (October 2007; 100.0%): Plans and produces animation films
Digital Frontier Inc. (April 2010; 86.9%): Plans and produces computer graphics
Movie/TV
▶
SPO Inc. (March 2008; 31.8%): Plans, produces, and distributes movies
Merchandising
Interactive Media
▶
▶
Future Scope Corp. (October 2006; 94.4%): Provides mobile content-related and online shopping services.
NEX ENTERTAINMENT CO., LTD. (November 2011;69.8%): Plans, produces, develops and sells computer software.
Consumer Products
▶
Tsuburaya Productions Co. Ltd. (April 2010; 51.0%): Plans and produces movies and TV shows. Plans, produces, and
sells character merchandise
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Fields ＞ Business
▶
Fields | 2767 |
Total Workout Premium Management Inc. (May 2011; 95.0%): Runs fitness clubs
Pachinko/Pachislot Machines
▶
▶
▶
▶
▶
▶
▶
▶
▶
Fields Jr. Corp. (March 2002; 100.0%): Provides maintenance services
Shin-Nichi Technology Co. (January 2008; 100.0%): Develops machines
BOOOM Corp. (May 2009; 51.0%): Plans and develops machines
Sogo Media Inc. (March 2010, 35.0%): Advertising agency business
Microcabin Corp. (January 2011; 100.0%): Plans and develops software
Mizuho Ltd (February 2012, 49.7%): Develops and manufactures pachinko/pachislot machines
NANASHOW Corp. (January 2014, 38.9%): Develops and manufactures pachinko/pachislot machines
Cross Alpha (May 2015, 100%): Develops and manufactures pachislot machines
Spiky Corporation: (May 2015, 100%): Develops and manufactures pachislot machines
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Fields | 2767 |
Fields ＞ Business
Profitability snapshot and financial ratios
FY03/08
FY03/09
FY03/10
FY03/11
FY03/12
FY03/13
FY03/14
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
GP Margin
33.9%
32.9%
40.5%
33.9%
34.0%
30.8%
29.4%
28.6%
OP Margin
12.9%
2.7%
12.2%
12.7%
9.2%
9.5%
8.5%
4.8%
RP Margin
11.5%
1.4%
11.7%
13.2%
9.4%
9.5%
8.5%
5.5%
NP Margin
5.2%
-2.0%
5.0%
7.3%
6.5%
4.4%
4.7%
3.0%
FY03/08
FY03/09
FY03/10
FY03/11
FY03/12
FY03/13
FY03/14
FY03/15
Profit Margin
Financial Ratios
FY03/15
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
ROA
17.3%
1.6%
11.6%
17.1%
10.0%
10.3%
9.2%
5.1%
ROE
11.9%
-3.5%
8.2%
17.1%
12.2%
8.9%
9.5%
5.1%
1.47
1.40
0.82
1.31
0.98
1.01
1.10
0.90
57.3
Total Asset Turnover
Inventory Turnover
25.4
75.8
43.7
76.3
29.4
46.2
36.7
Days of Inventory
14.4
4.8
8.4
4.8
12.4
7.9
10.0
6.4
Quick Ratio
130.4%
205.4%
136.8%
158.8%
139.1%
137.9%
140.8%
134.8%
Current Ratio
204.7%
333.0%
158.2%
185.1%
165.6%
153.5%
160.4%
155.1%
64.8%
77.6%
51.3%
60.3%
55.4%
51.5%
55.9%
54.5%
-17.5%
-20.2%
Equity Ratio
-32.8%
-29.5%
-32.4%
-40.5%
-49.2%
-19.5%
OCF / Current Liabilities
0.58
0.55
0.24
0.29
0.26
0.29
0.39
-0.20
OCF / Total Liabilities
0.49
0.33
0.21
0.25
0.24
0.26
0.35
-0.18
Net Debt / Equity
While true peer analysis is not possible due to the company’s unique business model, ROE exceeded 10% between
FY03/10 and FY03/13. The “growth-oriented business model” can be viewed as the company’s attempt to further raise
profitability.
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Fields ＞ Business
Fields | 2767 |
Strengths and weaknesses
Strengths
◤
Strong sales force: Game makers use Fields to take advantage of the company’s large and skilled sales force,
enabling them to extend geographic reach and accelerate getting games on the market.
◤
Game planning and development: The company develops games not dependent on a sense of gambling, but on
strong content.
◤
Brand creativity: The ability to create new, distinct brands gives the company's partners more bandwidth to sell
product while defraying their marketing costs. (Operators tend to allocate hall-space per brand; distinct labels
enable manufacturers to “backdoor” additional machines into one venue.)
◤
Alliances with top game makers: The company’s partners include game makers with notable technology and
development capabilities, as well as leading entertainment companies
Weaknesses:
◤
Dependency on pachinko/pachislot business in a regulated industry: Earnings are highly dependent on the
pachinko/pachislot business, which is easily affected by legal and voluntary restrictions.
◤
Lack of track record and experience in creating original IP: The creation of original IP is indispensable for
growth, but it takes three to four years and considerable costs.
Main facilities
Fields Corporation’s operational backbone is based on its national sales network. This includes 26 branch offices (as of
FY03/14) located in Hokkaido-Tohoku (3), North Kanto (3), Tokyo (6), Nagoya (4), Osaka (3), Chugoku-Shikoku (3) and
Kyushu (4).
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Fields ＞ Business
Market and value chain
This section focuses on the pachinko/pachislot machine market.
Market overview
The Japan Productivity Center estimated the total domestic leisure market at JPY65.2tn in fiscal year 2013 (source: White
Paper on Leisure 2014). Pachinko/pachislot was estimated at JPY18.8tn, or around 29% of the leisure market. Of that
amount, JPY16.0tn was returned to players in payouts or “winnings.” Operators reinvested about JPY1.1tn of the
remaining JPY2.8tn into new machine purchases (company estimate).
Market Trends
Pachinko
Market Size (JPYmn)
Machines Sold (Thousand)
Average Price Per Machine (JPY)
Pachislot
Market Size (JPYmn)
Machines Sold (Thousand)
Average Price Per Machine (JPY)
2000
2007
2008
2009
2010
2011
2012
2013
2014
568,300
3,360
169,137
868,600
3,170
274,006
921,300
3,330
276,667
985,200
3,330
295,856
886,900
2,900
305,828
826,700
2,600
317,962
772,900
2,490
310,402
609,900
2,060
296,068
643,700
2,010
320,249
314,500
1,130
278,319
502,500
1,740
288,793
247,800
910
272,308
225,800
760
297,105
286,700
970
295,567
375,000
1,250
300,000
429,900
1,320
325,682
473,300
1,390
340,504
425,600
1,230
346,016
Industry data shows that the market remains stagnant. The player population fell to 11.5mn in 2014 versus 29.0mn in
1995. The number of pachinko halls declined to 11,627 in 2014 from 18,224 in 1995 (source: National Police Agency). A
decrease in the amount of cash flow available for new investments has forced some smaller operators to sell or shut
operations. At the same time, hall sizes have become larger increasing to an average of 395 installed machines per hall in
2014 from 261 machines in 1995. Larger chains also appear to be gaining scale highlighting continued polarization of the
market. Against this background, the total number of installed machines stood at 4.6mn in 2013, little changed from
4.5mn in 1995.
Order trends for Fields are tied to the financial health of its pachinko hall customers. Logically, the higher the cash flows of
pachinko halls, the more funds they can spend on new equipment. Industry new machine investment is broadly defined
by the average number of times halls “turn” their machine line-up per year. In 2013, turnover was 0.68 times for
pachinko, 0.87 times for pachislot, and 0.75 for game machines (source: Yano Research Institute, National Police Agency).
In terms of the machine market, pachinko machine sales rose from 3.7mn machines in 1995 to a peak of 4mn machines in
2005. But since then, pachinko machine sales have been declining. On the other hand, pachislot machine sales expanded
five-fold to 1.8mn in 2005 off a low base of 350,000 machines in 1995. Following the introduction of stricter regulation in
2007, demand for lower gambling nature pachislot machines fell before recovering from the second half of 2009.
As the size of the market has changed, competition between manufacturers has intensified. Well-known manufacturers
that have worked their way into the top ranks tend to generate repeat sales by developing a series of machines based on
a popular theme, but smaller manufacturers have been struggling. Today, while top-selling blockbusters may still garner
over 100,000 machines in sales, less popular titles may not even sell 10,000 machines.
The chart below illustrates market share per manufacturer on a machine basis (source: Yano Research Institute, Trends of
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Fields ＞ Business
Pachinko Related Manufacturers and Market Share 2012). As of the end of June 2015, there were a total of 35 pachinko
machine manufacturers versus more than 60 manufacturers of pachislot machines, an indication that there is less
competition in the pachinko industry than in the pachislot industry. Across both segments, Shared Research believes the
success of the company is partly due to its ability to partner with key players at the development stage. Manufacturers, in
turn, have reason to partner with Fields as it enables the creation of secondary brands and higher penetration per account
resulting in a higher market share.
Pachinko Market Share Installed Base
Pachslot Market Share Installed Base
Source: Yano Research Institute, Trends of Pachinko Related Manufacturers and Market Share
For pachinko machines, SANKYO includes Bisty. Sammy includes Ginza and Taiyo Elec.
For pachislot machines, Sammy includes Rodeo, IGT, TRIVY, and Taiyo Elec. SANKYO includes Bisty. Universal includes Eleco, Mizuho, and Macy.
Olympia includes machines sold by Heiwa; satays for the total all Olympia and Heiwa brands.
The company believes a recent move away from dependency on high gambling nature machines towards healthier and
more entertainment-orientated machines should resume growth for the pachinko industry in the near future. While it is
difficult to provide solid proof of this view, consumers’ average leisure time has been increasing and the company
believes the evolution and growth of the pachinko industry into one of the choices of entertainment to fill this increased
leisure time is a likely scenario. In addition, the pachinko market appears to be relatively impervious to the economic
cycle. The company thinks that the decline of the playing population is related more to the peculiarities of the pachinko
and pachislot markets themselves.
Market growth potential and cyclicality
The market is mature and arguably in secular decline due to Japan's declining population and emerging forms of passive
entertainment. However, industry innovation could reverse or slow what has been a gradual decline. The key cyclical
drivers are government regulation and the industry's growth as a distinct type of popular entertainment. The industry is
regulated by the National Public Safety Commission. Rules on the approval and certification of machines are set in
accordance with the Entertainment Business Control Law per each prefecture.
Historically, regulators have tended to change the technical specifications regarding gambling nature limits every several
years. The goal has been to prevent excessive gambling and trends in high-gambling nature machines have been easing.
For instance, a change in regulations in 2004 led to a de-emphasis in the gambling aspect of pachislot machines, and to a
big wave of replacement sales in 2007. Pachislot machine sales then declined as some players gravitated to pachinko.
However, as manufacturers compete to develop machines compliant with the newest regulations and increase the
entertainment aspect of new machines there has been an acceleration in both hardware and software innovation.
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Fields | 2767 |
According to Fields, the gambling aspect has an influence on players and thus potentially on market growth. Since
FY03/11, many manufacturers have focused on so-called "max-type" machines where average spend per player tends to
be higher when compared with other types of machines, but the expected return is also likely to be higher (which can be
appealing to serious players). This means on average a player loses money faster on these types of machines. Although
max-type machines could mean higher cash flow for pachinko halls in the short run, Fields was concerned this trend
might alienate casual players and could be an unhealthy trend for the overall market. However, from November 2015,
max-type machines will no longer be sold due to voluntary restrictions adopted by the industry.
However, from FY03/12, such trend has shown a turnaround: pachinko halls have increasingly installed machines with low
gambling nature (e.g., light-middle and middle types) because these machines could push up machine utilization.
Classification of pachinko specifications (i.e., jackpot-probabilities) is based on explanations from the company. Probabilities: max-type is
1/370–1/399; middle-high is 1/320–1/369; middle-low is 1/280–1/319; light-middle is 1/150–1/279; “amadeji” class is between 1/40 and
1/149+.
SR Inc. thinks Fields could be a long-term beneficiary from the rise and fall in popularity of different machines. Regulatory
revisions can upstage market leaders and give manufacturers a short window when they need to scramble for new
innovative products. The company helps manufacturers plan and develop new product lines to sell to halls that could be
otherwise reluctant to increase dependence on a particular maker.
Customers
Pachinko halls are the company’s clients. Pachinko halls could buy directly from manufacturers, but the benefits of using
Fields include a single supplier relationship (i.e., they can buy titles of different manufacturers from Fields) and market
knowledge that the company can share (such as which machines are popular nationwide).
Suppliers
Field’s main suppliers are pachinko/pachislot machine manufacturers. This is the core relationship defining the company’s
business model. The relationship is mutually beneficial—manufacturers provide the company with products to sell, and in
return receive content rights, design ideas and benefit from the sales channel.
Barriers to entry
Barriers to entry are high; the industry has a number of sophisticated and well capitalized players, while products require
substantial development costs, and carry high failure rates. The company’s business model is unique and would be
difficult to replicate. It possesses an extensive expert sales network and has long-term relationships both with top
manufacturers and thousands of pachinko halls. With roughly 300 salespeople in daily discussions with pachinko hall
operators, the customer relationship base is sticky and it has extensive information about customers. Moreover, pachinko
tends to be a personality-driven industry reliant on trust. Incumbents with existing relationships therefore have a natural
advantage. Finally, the pachinko hall operator market is fragmented and a newcomer would need significant time to
gather a critical mass of customers to become profitable.
Competition
The company estimates there are approximately 1,000 distribution companies in the pachinko/pachislot market.
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Fields | 2767 |
However, no other company has a business model or a nationwide sales network that rivals Fields’. The company's
products though do in fact compete with those of its partner and non-partner manufacturers. Listed manufacturers
include SANKYO Co., Sega Sammy Holdings Inc., Heiwa Corp. (TSE1: 6412), and Universal Entertainment Corp.
Substitutes
Casinos: As of May 31, 2015, casinos were officially banned in Japan. However, there was an ongoing debate regarding
potential legalization. Standard Research thinks even if casinos were legalized, only a limited number would be licensed
to operate. As such, the substitution effect would be negligible on the extensive nationwide network of nearly 11,627
pachinko/pachislot halls (2014 data) and 4.6mn installed machines (2013 data).
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Fields | 2767 |
Strategy
Based on the “growth-oriented business model,” the company is pushing efforts to maximize the value of its intellectual
property (IP) portfolio. Fields sees its core strength as its ability to find and leverage content for its pachinko and pachislot
clients. However, the company’s longer-term ambition is to extend its capabilities beyond the pachinko/pachislot
business. Fields has not been able to develop a large enough or profitable enough business outside of pachinko/pachislot
for the past several years, but its profitability has been recovering, and the company may be back on a growth track.
While pachinko and pachislot will likely remain the main earnings drivers for the time being, SR Inc. estimates that
Tsuburaya Productions could determine Fields’ future success. Also, HERO’S Inc. is responsible for creating content and
on top of contributing toward the pachinko and pachislot business, it is expected to be involved in other entertainment
ventures, such as digital comics.
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Fields ＞ Historical financial statements
Historical financial statements
Summary
1H FY03/16 results
▶
▶
▶
▶
Sales:
JPY50.3bn (+147.1%)
Operating profit: JPY1.9bn (versus loss of JPY4.1bn in 1H FY03/15)
Recurring profit: JPY1.9bn (versus loss of JPY4.1bn in 1H FY03/15)
Net earnings attributable to parent company shareholders:
JPY706mn (versus loss of JPY2.5bn in 1H
FY03/15)
SG&A expenses rose 8.8% YoY, to JPY12.0bn, as sales-related expenses grew in conjunction with the increased number of
pachinko and pachislot machine titles sold versus the same period last year. In 1H the company rolled out a total of four
new pachinko machine titles and three new pachislot machine titles, compared with only one new pachinko machine and
one new pachislot machine during the same period last year. Despite a rise in SG&A expenses on an increase in titles, the
company says it is on track to meet its planned reduction in SG&A expenditures over the next two to three years.
Total pachinko/pachislot machines sales hit 134,531 units, up 32,412 units (31.7%) versus the same period last year. Sales
of pachinko machines were down, declining 12.1% YoY to 64,954 units, while sales of pachislot machines were sharply
higher, rising 146.6% YoY to 69,577 units.
The company rolled out a total of four new pachinko machine titles during 1H versus only one new title at this time last
year. The new titles included CR Million GOD RISING, manufactured by Macy, which went on sale in July.
The three new pachislot machine titles rolled out by the company included EVANGELION—Spear of Hope
and Resident Evil 6. Manufactured by Bisty, EVANGELION—Spear of Hope went on sale in June and sold more than 26,000
units. Resident Evil 6 sold more than 35,000 units. Delivers of the new Majestic Prince pachislot machines from D-light
(announced last August) began in November. The new Majestic Prince-themed pachinko machine is the first pachislot
machine to use IP from a serial comic appearing in Hero's Monthly magazine.
Results were generally in line with the company's full-year forecasts, including Tsuburaya Productions and the social game
field.
Titles sold or in use (as of October 30, 2015)
Pachinko machines
Delivery month
May 2015
CR Million God Rising
July 2015
CR Martian Successor NADESICO
August 2015
CR Sakigake Otokojuku
August 2015
CR EVANGELION X
September 2015
CR Midoridon Hanabi DE Buon giorno*
November 2015
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Fields | 2767 |
Pachislot machines
Delivery month
June 2015
Resident Evil 6
July 2015
Asura's Wrath
September 2015
Majestic Prince*
November 2015
Oh My Goddess!*
November 2015
EVANGELION―Tamashii wo Tsunagumono *
December 2015
Note: Asterisk denotes titles being marketed as of October 30, 2015.
◤
In comics, the company is focusing on IP development with the aim of expanding IP in cross-media formats,
primarily through the comic Hero's Monthly. The company is already working on seven animation projects involving
works serialized in this monthly publication, and plans to commercialize multiple titles as games, pachinko/pachislot
machines and other products.
◤
In visual media, the company began television broadcasting of Ultraman X, the most recent installment of the
Ultraman series. In conjunction the domestic broadcasts, the company also began distributing Ultraman X overseas
and has made plans to ramp up overseas product development for the Ultraman series going forward. The company
reports a total of 250mn views in China. The company's Ninja Slayer From Animation is being distributed through
Web media and, having logged more than 11 million replays in last six months, will now become the basis for
collectable figures and social games. Ninja Slayer From Animation has now been licensed for use to a total of 28
different companies.
◤
In the social game field, the company released the Tower of Princess in August 2015. The game went into the black
in September and ARPPU (average revenue per paying user) is also high. Starting in November, the company plans
to launch four native app games (i.e., for playing on a specific platform or device). The company is also developing
new social games for release at the rate of approximately one game per quarter. In home games, the company
plans to turn Killing Bites (a story running in the comic Hero's Monthly) into a game.
◤
The number of companies licensing A Man of Ultra (licensed brand), which depicts the concept and worldview of
the Ultraman series through apparel and other products, increased to 33. In addition, in the live entertainment field,
live experience-type shows utilizing the Ultraman series were staged in four locations in Japan and overseas and the
company plans to stage several shows going forward, primarily in Asia. In the pachinko/pachislot field, the company
focused on expanding sales of pachinko/pachislot machines that are part of a series, such as EVANGELION. The
company also continued to promote pachinko/pachislot machines utilizing new IP, such as Majestic Prince, with the
aim of raising the value of related IP and turning them into a product series in the future.
Q1 FY03/16 results
▶
▶
Sales:
JPY17.1bn (+129.8% YoY)
Operating loss:
JPY1.0bn (operating loss of JPY2.5bn in Q1 FY03/15)
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▶
▶
Recurring loss:
JPY864mn (recurring loss of JPY2.3bn in Q1 FY03/15)
Net loss attributable to parent company shareholders:
JPY867mn (net loss of JPY1.5bn in Q1 FY03/15)
SG&A expenses in Q1 were JPY6.0bn (+12.4% YoY). According to the company, the increase came as it reported sales
promotion costs for new machines to be launched in Q2. Its plan to reduce SG&A expenses for two to three years from
FY03/16 is progressing as expected.
The company launched a number of machines including EVANGELION – Spear of Hope in response to the change in the
pachislot model certification testing method in September 2014. The table below (“Titles sold or in use”) outlines the
company’s business activities in Q1. The company sold 28,725 pachislot machines (up 23,068 machines or 407.8% YoY)
and 15,684 pachinko machines (down 22,856 machines or 59.3% YoY). A total of 44,409 machines (up 212 machines or
0.5%YoY) were sold.
Fields put one pachinko machine title on sale during Q1. CR EVANGELION 9 Type zero version, a machine manufactured
by Bisty Co., contributed to sales along with other titles. The company launched one pachislot machine title. Sales of
EVANGELION–Spear of Hope, a machine also made by Bisty and launched in June 2015, totaled 23,000 units,
contributing to the rise in machine sales volume.
A change in the model testing protocols for pachislot machines in September 2014 introduced stricter rules against
gambling. The company’s two titles launched in June and July 2015, respectively, comply with the new rules; despite a
lower sense of gambling, the game’s usage rate is above average because the cost to play is lower. According to the
company, the lower limit of the pachinko machine jackpot probability range required from November 2015, and a further
decrease in the gambling nature of pachislot machines from December 2015 should lead to a favorable environment,
because it has emphasized amusement and IP rather than the sense of gambling when developing its titles.
Titles sold or in use (as of July 31, 2015)
Pachislot machines
Delivery month
June 2015
Pachislot Biohazard 6
July 2015
Pachinko machines
Delivery month
May 2015
CR Million GOD RISING
July 2015
CR Martian Successor NADESICO（※）
August 2015
CR EVANGELION X（※）
September 2015
CR Sakigake Otokojuku（※）
August 2015
※ Titles in use as of July 31, 2015.
◤
The company has focused on creating Intellectual Property (IP) primarily based on the Hero’s Monthly comic series
by developing its stories in cross-media formats, such as working on several films, and planning and developing IP
into games and pachinko/pachislot machines. Hero’s Monthly has so far inspired 52 titles, with 2 new titles starting
in Q1. Toward the fourth anniversary of its launch, the magazine is promoting development of new IP and
conducting selection and concentration of its serialized titles.
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The company’s TV segment began broadcasts of Ultraman X, while the Web distribution segment launched Ninja
Slayer From Animation. The company also developed products for children and adults based on characters appearing
in TV and films distributed online . As of July 2015, viewers exceeded eight million and licensees came to 28.
◤
Merchandising generates revenue from IP, and the company focused on reinforcing its revenue base in various fields
toward its plan to produce films from its IP in FY03/17 and later. The company improved elements in the Social game
segment by overhauling Animal x Monster (launched in the previous fiscal year) and devised new plans for
collaborations. In addition to developing products based on existing characters, the company launched A MAN of
ULTRA (licensed brand), which brings concepts and world views into tangible form. As of July 2015, there were 27
licensees for A MAN of ULTRA. Interactive live shows based on the Ultraman series were presented both in Japan and
overseas. In the Pachinko/Pachislot segment, the company marketed multiple pachinko/pachislot machines based on
IP, such as Biohazard 6 and CR EVANGELION X, to be launched in Q2 this year. The group made pachislot machine
maker K.K. Aristocrat Technologies and K.K. Spiky subsidiaries in Q1, and will use the subsidiaries’ hardware,
software, and other assets to develop more products.
FY03/15 results
▶
▶
▶
▶
Sales:
JPY99.6bn (-13.4% YoY)
Operating profit: JPY4.7bn (-51.6% YoY)
Recurring profit: JPY5.5bn (-43.8% YoY)
Net profit:
JPY3.0bn (-43.8% YoY).
In the amusement machine sales business, Fields pursued a range of sales strategies as it looked to grow sales of pachinko
machines featuring leading intellectual property (IP). As a result, the company sold 302,406 pachinko machines
(+139,527 machines, up 85.7% YoY), and 97,285 pachislot machines (-132,818 machines, down 57.7% YoY). As a result,
total sales volume of amusement machines were 399,691 (+6,709 machines, up 1.7% YoY).
The company booked sales on five new pachinko machines. Sales CR Evangelion 9 manufactured by Bisty Co. (102,000
units) and launched December 2014 contributed to sales, as did Pachinko Ultra Battle Retsuden manufactured by OK Co.,
Ltd. (20,000 units) launched in March 2015.
The company launched three new pachislot machines, and according to the company, outperformed sales forecasts.
Salaryman Kintaro: Shusse Kaido-hen manufactured by Rodeo Corp. sold 42,000 units, and Pachislot BERSERK
manufactured by NANASHOW Corp. sold 20,000 units. The launches of five new pachislot machines scheduled for this
year, however, were delayed until FY03/16 owing to new testing protocols introduced in September 2014.
Developments in Fields’ IP are as follows:
◤
The company continued focusing on creating IP via the comic Hero’s Monthly, and developing visual content for the
IP in this comic. It also decided to go ahead with the use of IP in video games, and pachinko and pachislot machines.
◤
The Ultraman series generated stable revenues as the company deployed this IP across a range of media. It
continued broadcasting a TV series and premiered a new movie, while growing sales of TV and movie tie-in
products. In addition, overseas, the company sold existing movie products and planned new movie products, while
also holding events at complex facilities. The company also planned, produced, and premiered a new live action
show based on the Ultraman series that allows that audience to experience the action. It plans to expand this
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production overseas.
◤
In social games, Fields made its operation and development framework more efficient, and focused on improving
the quality of its titles. In particular, it added new content and used real-life events to enhance titles featuring the
AKB48 brand. The company also steadily released new smartphone game apps with exciting gameplay and
appealing characters.
FY03/14 results (announced on April 30, 2014)
In the pachinko/pachislot business, the company launched four pachinko titles (three new titles in the previous year) and
seven pachislot titles (six in the previous year). The new pachinko titles included a new model of the Evangelion series
and the pachislot titles newly included Mizuho Corp.’s machines. Total sales of pachinko/pachislot machines increased to
392,982 units (+64,872 YoY), including 162,879 pachinko machines (+62,886 YoY) and 230,103 pachislot machines
(+1,986).
Higher unit sales of pachinko machines were partly due to The Evangelion 8 machine—manufactured by Bisty Co.—which
saw sales of 75,000 units. Pachislot Monster Hunter by Enterrise Co. and Another God Hades by Mizuho Corp. both
contributed to increased unit sales of pachislot machines, with sales of about 45,000 and 54,000 units respectively.
According to the company, utilization rates fell in the pachinko/pachislot market, but unit sales—which fluctuate with
popular machine introductions—were mostly unchanged. Total market sales of pachinko/pachislot machines between
April 2013 and March 2014 were 3.7mn units (-9.5% YoY), including 2.3mn pachinko machines (-15.2%) and 1.4mn
pachislot machines (+1.3%) (source: company materials).
Profits were up for pachinko/pachislot machines and consumer products, but fell for social games in interactive media.
Factors that affected operating profit are as follows:
◤
In the pachinko/pachislot business, profit increased YoY thanks to steady selling activities though the company spent
more to strengthen the sales structure and expand sales promotion activities. The company strengthened
development of new machines in cooperation with its subsidiaries in a bid to broaden its product line-up for the
medium and long term.
◤
In the consumer products business, movie production subsidiary Tsuburaya Productions Co., Ltd., the founder and
holder of the “Ultraman” series, is building up a structure to obtain stable income. The license business performed
well as Tsuburaya Productions held events to mark its 50th anniversary and produced a new TV series. Tsuburaya
Productions reported sales of JPY3.3bn (+11.2% YoY) and operating profit of JPY670mn (+71.8%).
◤
In interactive media, sales of ongoing popular content were robust. Meanwhile, the company promoted reform of
the income structure, such as narrowing down the lineup of games and implementing more efficient operations and
development, to cope with a transition from Web applications to native applications in the social game market. As a
result, there was a temporary fall in profitability in FY03/14.
◤
In the comics, animation and movie/TV businesses, the company continued to spend management resources for
creating and fostering intellectual property, such as characters and stories, as the sources of growth. Particularly, it
made efforts to make animations from comics that were created in the company’s media and strengthened sales
promotion for them.
Operating profit saw a 5.1% YoY fall as a result of measures and advance investments toward growth for the medium and
long term.
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FY03/13 results (announced on May 7, 2013)
Sales were JPY108.1 bn (+17.3% YoY), operating profit was JPY10.3 bn (+21.0% YoY) recurring profit was JPY10.3 bn
(+18.6% YoY), and net profit was JPY4.7 bn (-21.2% YoY). The main factor behind this earnings fluctuation was the
increase in the number of pachislot machines sold compared with the previous year as a result of the launch of strong
products in the pachislot market. A few subsidiaries recorded extraordinary losses that caused net income to decline YoY.
The company pursues business activities with an emphasis on maximizing the value of its characters and other intellectual
property (IP) based on the “growth-oriented business model” (seamlessly synergistic business development involving
Comics, Animation, Movie/TV, and Merchandising) announced in May 2012.
Fields made the following comments on its initiatives in main businesses:
IP Acquisition, Creation, and Development; Comics; Animation; Movie/TV
In the comics segment, the comic Hero’s Monthly marked the first anniversary in November 2012 since launch, as well as
favorable publication of the “Heroes Mix” comic since its launch in September 2012. Volumes one and two of the
“Ultraman” comic series sere published, selling over 400,000 issues. In the animation and movie/TV segment, the
company plans to bring its comic stories to the screen. The animation “Ginga Kikotai: Majestic Prince” began
broadcasting on television in April 2013.
The company released three series of the animated movie “BERSERK.” This movie was selected for the Special
Achievement Award in the animation division at the Agency of Cultural Affairs’ 16th Japan Media Arts Festival. The movie
was also nominated for an award at the Festival International du Film d’Animation d’ Annecy in France. Given the success
of its animation, the company is expanding into new media. Fields pursued plans to raise its name recognition for a
number of IP by expanding them into the merchandising segment.
Merchandising
In the merchandising segment, the company is enhancing its services and products for a broad range of media and
platforms, by expanding its stories and characters created and promoted from its comics, animation, and movies/TV
segments, to increase the value of its intellectual properties and maximize profits. In interactive media, Fields was focusing
on the high-growth social media field and advancing activities to increase profitability in this segment. In the social game
segment, the company focused on planning and developing new game titles to enhance its competitive advantage over
its competitors.
In the pachinko/pachislot sales business, the company is implementing a number of measures to increase support from
existing fans, as well as capturing new pachinko and pachislot players. The company became the overall sales agent for a
new pachinko machine brand, “OK” for a major pachinko machine maker in FY03/13. The company received rave reviews
for its “Biohazard 5” pachislot machine from its fans. In FY03/13, the company sold 228,000 pachislot machines (up
49,000 units YoY), a record high. However, it sold 100,000 pachinko machines (down 133,000 units YoY), mainly affected
by the absence of major model releases during the period. As a result, total unit sales of pachinko and pachislot machines
fell in FY03/13 over the previous year.
FY03/12 results (announced on May 9, 2012)
The company downwardly revised its FY03/12 forecast on March 16, 2012. Actual results were largely in line with the
revised forecast. Sales were down 11.0% YoY at JPY92.1 bn with operating profit tumbling 35.1% to 8.5 billion. Net
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income fell 20.3% YoY to JPY5.9 bn due to the recognition of a deferred tax asset from the dissolution/liquidation of its
Japan Sports Marketing Inc. subsidiary and a lower corporate tax burden. The company posted YoY declines in sales and
profitability. However, this was because the company released a number of blockbuster Pachinko and Pachislot machine
titles in Q4 giving consideration to component supply shortage due to March 2011’s earthquake, and some sales related
to a pachislot machine released in Q4 are now to be booked in FY03/13.
The company has continued investing in the entertainment field based on a vision of maximizing Intellectual Property (IP)
value through the use of various forms of media, including pachinko/pachislot machines, from the viewpoint of building a
business centered on IP. These efforts can be seen in such projects as its comic Hero’s Monthly and the movie “BERSERK.”
Performance by segment:
PS Field: Sales of JPY83.9 bn (-10.8% YoY); Operating profit of JPY8.6 bn (-32.7% YoY)Industry Situation:
Pachinko and pachislot machine manufacturers had changed their sales schedules with a focus on 2H FY03/12 activity
(October 2011 to March 2012), as component makers, such as semiconductor firms, began recovering from March
2011’s earthquake going into summer 2011. Consequently, 1H sales were sluggish industry-wide on a YoY basis as
machine sales were focused on those units where components had been procured pre-quake. However, the supply chain
has recovered faster than initially expected and for Q3 machine makers released numerous new titles, with a number of
them becoming hit machines. Pachinko hall operators have also been actively replacing models with new machines.
Specifically, 2H saw the increased replacement with major titles (each selling more than 50,000 units). Regarding the
impact of the November 2011 floods in Thailand there have been limited issues with component procurement, however,
the industry wide effect was not perceived to be particularly severe.
According to the company’s analysis, the number of pachinko machine titles sold during 1H declined by 29 to 92, while
the number of pachislot machine titles offered decreased by 8 to 53. In 2H, during which time supply chains damaged by
the earthquake disaster were restored, the number of pachinko machine titles sold increased by 14 to 106, while the
number of pachislot machine titles sold declined by 8 to 48. This trend is indicative of the pachinko/pachislot market
where there tends to be a focus on major titles in the second half, especially among pachislot machine makers. For the full
year, the number of pachinko machine titles sold declined 15 to 198 and the number of pachislot machine titles sold
decreased by 16 to 101. So the number of titles fell for both types of machines, a result probably due in large part to
impacts from the March 2011 Great East Japan Earthquake.
Company situation
Given the above situation of most makers choosing to release titles in Q3, as a distributor to halls Fields Corporation
decided to go for Q4 releases of its titles to attract players. As for Q4, the latest release in its hit Evangelion Pachinko
machine series, “CR Evangelion 7,” was released in January 2012. This new title was well received. The ongoing recovery
in the Pachislot segment continued, and the company launched “Evangelion—the Heartbeat of Life,” its second major title
for the quarter, in February as well as a third major title in March 2012: the pachislot machine “Monster Hunter.”
Some of the sales related to the pachislot title “Monster Hunter” are now to be booked in FY03/13 as component
procurement had been disrupted by the November 2011 flooding in Thailand. In addition, the company delayed the
release of a new Bisty Co., Ltd. title until FY03/13 to make the machine specifications compliant with the regulations
revised after April 1, 2012. Unit sales performance was 179,167 pachislot machine units (down 38,492 units YoY) and
233,223 pachinko machine units (down 29,391 units YoY).
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Mobile field: Sales of JPY1.9 bn (-5.3% YoY); operating profit of JPY11 mn (-95.1% YoY).
Operating profit declined, but this was due to the results for some mobile content operations being booked on a
parent-only (PS Field) basis. As such, mobile-related results should not necessarily be viewed as sluggish.
Sports entertainment field: Sales of JPY1.9 bn (-10.4% YoY); operating profit of JPY7 mn (operating loss of JPY290 mn YoY)
Business reorganization helped to bring about a return to profitability.
Other field: Sales of JPY5.4 bn (-7.2% YoY); operating loss of JPY139 mn (operating profit of JPY315 mn YoY)
The operating loss was due to continued investment in the acquisition and creation of IP such as the comic Hero’s
Monthly and the production and distribution of the movie “BERSERK.”
The first issue of the comic Hero’s Monthly, a joint venture with Shogakukan Creative Inc., debuted in November 2011
and the eighth issue was released on June 1, 2012.
Subsidiary Lucent Pictures Entertainment Inc. on February 4, 2012 released the anime film BERSERK I THE HIGH KING'S
EGG in theaters nationwide. There are plans to release the second installment in this series, BERSERK II THE BATTLE OF
DOLDREY, in June 2012.
Tsuburaya Productions released the latest Ultraman movie “Ultraman Saga” nationwide in March 2012.
Pachinko/Pachislot Market Trends (May 2012 press briefing)
The company provided the following information about recent developments for the pachinko and pachislot markets.
Installation Shares by Pachinko Machine Type
Looking at pachinko hall installation shares by machine types, the share held by “ama-deji” type machines (offer the best
chance of winning, but payouts are smaller) have held steady, while shares held by the “MAX” and “middle-high” type
machines have continued shrinking. Meanwhile, shares have been increasing for “middle-low” type machines such as “CR
Evangelion 7” and “light-middle” machines. Looking at these trends, the company thinks needs of pachinko fans are
shifting, from machines with strong gambling nature to those with somewhat weaker gambling nature but appealing
content for relatively casual entertainment.
Fields uses the following terms to classify pachinko machine specifications (odds of hitting a big payout).
MAX: odds 1/370–1/399, middle-high: 1/320–1/369, middle-low: 1/280–1/319, light-middle: 1/150–1/279 and
ama-deji: at least 1/149.
Pachinko machine utilization
Pachinko machine utilization levels remained high between 2007 and 2008 (approximately 25,000 balls/day per unit).
Utilization levels then continued declining from 2009 to 2011 due in part to the emergence of the MAX-type machines
with higher gambling elements. However, as the middle-low and light-middle machines became more common from
2011, utilization has remained at a stable level (approximately 20,000 balls/day per unit), suggesting the earlier decline
had bottomed.
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Pachislot machine utilization
Utilization levels declined sharply following the complete mandatory shift to the machines compliant with Regulation 5 in
October 2007 (approximately 9,000 coins/day per unit). However, from 2010 there was a recovery mainly for ART (Assist
Replay Time) and similar pachislot machines, and recently utilization levels have been growing (approximately 11,000
coins/day per unit). The current utilization levels are on par with those during the later stage of Regulation 4.
FY03/12 (April–March) top selling machine titles
During FY03/12 the pachinko market had 15 top-selling machine titles defined as having sales of more than 40,000 units.
Fields produced two of these titles: “CR The Story of Ayumi Hamasaki—the prologue” and “CR Evangelion 7.” The
pachislot market had 17 top-selling machine titles defined as having sales of more than 15,000 units. Fields produced
three of these titles: “Kaze no Youjinbou—Memory of Butterflies,” “Evangelion—the Heartbeat of Life” and “Monster
Hunter.” Big hits for the pachislot industry were concentrated in the second half of the year.
Pachinko/pachislot new titles sales
The company estimated that the number of new pachinko machines sold market-wide remained at roughly the same level
as during FY03/11, while sales of pachislot machines were estimated to have surged compared to FY03/11 and topped
the one million unit mark.
New management policy (summary based on FY03/12 financial report)
Since its listing, the company had followed a business model focusing on the PS Field. This changed several years ago: the
company has worked to shift its focus to intellectual property (IP) in a bid to achieve long-term growth. Approaching the
10th listing anniversary and the 25th founding anniversary, the company is eyeing the establishment of a
“growth-oriented business model” for the next 25 years. With a new business model, the company aims for further
corporate growth.
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Income statement
Income Statement
(JPYmn)
Sales
YoY
CoGS
Gross Profit
SG&A
Operating Profit
YoY
Non-Operating Income
Non-Operating Expenses
Recurring Profit
YoY
Extraordinary Gains
Extraordinary Losses
Pretax Profit
Tax Charges
Minorities etc.
Net Income
YoY
FY03/08
FY03/09
FY03/10
FY03/11
FY03/12
FY03/13
FY03/14
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
101,818
73,035
66,342
103,593
92,195
108,141
114,904
99,554
-13.4%
19.3%
FY03/15
-28.3%
-9.2%
56.1%
-11.0%
17.3%
6.3%
67,274
49,010
39,452
68,464
60,865
74,862
81,092
71,086
34,544
24,024
26,889
35,129
31,330
33,279
33,812
28,468
23,724
21,385
22,063
18,764
21,993
22,803
22,964
24,020
13,158
1,960
8,124
13,136
8,527
10,314
9,791
4,743
47.1%
-85.1%
314.5%
61.7%
-35.1%
21.0%
-5.1%
-51.6%
1,213
313
528
484
1,136
574
738
1,313
1,766
1,497
846
588
440
784
1,339
465
11,705
991
7,761
13,684
8,661
10,268
9,765
5,491
27.2%
-91.5%
-43.8%
683.1%
76.3%
-36.7%
18.6%
-4.9%
97
269
53
215
8
10
29
479
1,292
3,840
597
488
404
1,276
207
215
10,509
-2,579
7,218
13,410
8,265
9,002
9,588
5,754
5,101
-126
3,900
5,883
2,099
4,224
4,143
2,430
111
-971
29
6
174
57
74
305
5,296
-1,481
3,289
7,520
5,991
4,720
5,370
3,018
-
128.6%
-20.3%
-21.2%
13.8%
-43.8%
42.7%
-
Performance overview
Sales can be affected by the mix between pachinko/pachislot sales due to accounting treatment (pachinko revenues are a
commission, pachislot revenues are for the full machine price). Field’s operating profit trends track the underlying market
cycle.
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Balance sheet
Balance Sheet
(JPYmn)
Cash and Equivalents
Securities
Accounts Receivable
Inventories
Other
Current Assets
FY03/08
FY03/09
FY03/10
FY03/11
FY03/12
FY03/13
FY03/14
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
FY03/15
Cons.
12,841
11,181
15,916
15,873
18,344
23,314
29,583
15,823
45,888
-
-
48
-
12,354
4,324
33,088
27,948
34,402
42,017
29,155
4,013
963
1,519
1,357
3,134
2,343
3,133
1,736
10,351
8,667
6,171
5,873
6,931
5,035
5,050
7,567
39,559
25,135
56,694
51,051
62,811
72,709
66,921
71,014
Tangible Assets
8,093
10,898
9,721
10,089
10,980
11,151
12,104
12,197
Intangible Assets
3,937
2,761
2,333
5,070
4,372
4,540
4,365
4,490
17,578
13,268
12,578
12,760
15,437
18,226
21,477
22,614
Fixed Assets
29,608
26,929
24,634
27,920
30,790
33,918
37,948
39,302
Total Assets
69,168
52,064
81,329
78,971
93,601
106,628
104,869
110,316
Accounts Payable
5,954
1,981
26,610
17,939
29,100
36,604
33,105
33,850
Short-Term Debt
4,322
781
720
869
1,068
943
692
4,056
Other
9,046
4,785
8,515
8,779
7,757
9,818
7,933
7,867
Current Liabilities
19,322
7,547
35,845
27,587
37,925
47,365
41,730
45,773
Long-Term Debt
684
2,230
1,510
965
439
109
50
8
2,830
2,791
2,785
3,397
3,682
4,055
4,336
4,288
LT Investment Securities etc.
Other
Fixed Liabilities
3,514
5,021
4,295
4,362
4,121
4,164
4,386
4,296
Total Liabilities
22,836
12,568
40,141
31,949
42,046
51,529
46,116
50,070
Shareholders' Equity
44,795
40,420
41,741
47,601
51,895
54,957
58,670
60,171
-554
-821
-824
-398
-390
-679
242
483
539
473
753
Appraisal Gains / Losses etc.
1,536
-924
Minority Interests
Net Assets
46,331
39,496
41,187
47,021
51,555
55,098
58,753
60,246
Total Liabilities & Net Assets
69,168
52,064
81,329
78,971
93,601
106,628
104,869
110,316
Working Capital
10,413
3,306
7,997
11,366
8,436
7,756
-817
13,774
5,006
3,011
2,230
1,834
1,507
1,052
742
4,064
-7,835
-8,170
-13,686
-14,039
-16,837
-22,262
-28,841
-11,759
Interest-Bearing Debt
Net Debt
Increases in sales have tended to lead to higher accounts receivable, reflecting the company’s role as a distributor and its
function as a trading partner. The company does not put pachinko machines on its balance sheet and therefore
inventories are not significant. The net interest-bearing debt (interest-bearing debt minus cash and equivalents) has long
been negative (practically debt-free). The equity ratio has ranged between 39.1% and 77.6% from FY03/03-FY03/15.
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Cash flow statement
Cash Flow Statement
FY03/08
FY03/09
FY03/10
FY03/11
FY03/12
FY03/13
FY03/14
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Operating Cash Flow (A)
11,127
4,147
8,429
8,005
10,015
13,570
16,322
-9,086
Investment Cash Flow (B)
-14,604
-6,182
-1,011
-4,356
-4,798
-6,263
-8,018
-6,297
-3,477
-2,035
7,418
3,649
5,217
7,307
8,304
-15,383
-1,384
602
-2,687
-3,915
-2,565
-2,277
-2,018
1,624
1,097
1,775
1,368
1,734
1,962
2,207
2,164
2,137
(JPYmn)
Free Cash Flow (A+B)
Financing Cash Flow
Depreciation (A)
Capital Expenditures (B)
Working Capital Changes (C)
Simple FCF (NI + A - B - C)
FY03/15
4,211
5,111
919
1,490
2,420
3,312
3,449
3,252
-1,988
-7,107
4,691
3,369
-2,930
-680
-8,573
14,591
4,170
2,290
-953
4,395
8,463
4,295
12,658
-12,688
Fields’ operating cash flows (OCF) have been lumpy mainly due to working capital changes.
Negative simple free cash flow was largely the result of cash used in working capital, driven by higher machine sales.
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Fields ＞ Other information
Other information
History
The company was established in Nagoya in 1988 by its founder and current Chairman/CEO, Hidetoshi Yamamoto.
Yamamoto was exposed to the pachinko industry initially through his father whose Nagoya company was involved in
management of pachinko halls. The younger Yamamoto proved a skilled advisor, adept at helping improve pachinko
halls’ operating performance.
During Fields’ first decade the business grew rapidly as the company augmented its sales pitch with pachinko hall space
design and machine installation advice. After establishing itself in Kyushu and Tokyo in 1992, Fields Corporation
rolled-out operations on a national scale by establishing branch offices in Tohoku, Chugoku, Shikoku and Kansai in 1995.
The company realized halls wanted access to the best machines to attract fans, but industry practice at the time wedded a
pachinko hall to one specific manufacturer. What was needed was a flexible system whereby halls could freely pick and
choose popular titles. Positioning itself as an unaligned distributor, the company uncovered a profitable niche that it has
since fortified.
Important developments since 2000 include partnerships with several major pachinko/pachislot manufacturers. One
important example of this was when the company started selling machines of Rodeo, a subsidiary of Sammy Corp. Fields
took a 35% equity stake in Rodeo in 2002 and used its Rodeo relationship to demonstrate its ability to source publishing
rights from third parties. In this case, it licensed rights from Toei Corp. (TSE1: 9605) for “Gamera” (a giant sea-turtle and
rival to the Godzilla franchise), and the Gamera model sold a respectable 60,000 machines at the time of its release. The
event also raised the company’s ability to price its services; specifically, revenue per machine effectively doubled when
this approach was employed.
Starting in the early 2000s, Fields set up several ventures outside of pachinko/pachislot planning, development and sales
in order to create new content and realize multiple use of content. These included a sports gym operation, a sports
management office for professional athletes, a game software company, a magazine publishing firm, and a mobile
content company. In 2003, the company listed on the JASDAQ exchange, receiving the ticker code 2767. It then formed a
business tie-up with Bisty of SANKYO Group. SANKYO Co. took a 15% stake in Fields in 2008. The company has also
teamed up (in 2006) with Olympia Co. (unlisted) and formed an alliance in 2008 with KYORAKU SANGYO (unlisted).
In 2007, Takashi Oya, a prominent games and IT securities analyst, joined the company as its new president and COO.
With his arrival, the company focused on improving execution, and systemizing many of its planning and sales functions.
At the same time, his appointment allowed Chairman Yamamoto the time and freedom to execute his vision. From 2008,
Fields can be viewed as transitioning from a machine distributor to an IP business.
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News and topics
November 2015
On November 25, 2015, the company announced the nationwide launch of Mobile Suit Gundam Awakening-Chained
battle-, a pachislot machine manufactured by Bisty Co. This machine is scheduled to be installed in pachinko halls from
January 2016 onward.
October 2015
On October 27, 2015, the company announced the nationwide launch of Evangelion- Tamashii wo Tsunagumono, a
pachislot machine manufactured by Bisty Co. This machine is scheduled to be installed in pachinko halls from December
2015 onward.
August 2015
On August 25, 2015, the company announced the nationwide launch of MAJESTIC PRINCE, a pachislot machine
manufactured by D-light Co., Ltd. This machine is scheduled to be installed in pachinko halls from November 2015
onward. It is the first pachislot in a series of Monthly Hero’s IP to be made into pachislot.
On August 17, 2015, the company announced the nationwide launch of Asura’s Wrath, a pachislot machine
manufactured by Enterrise Co. This machine is scheduled to be installed in pachinko halls from September 2015 onward.
July 2015
On July 31, 2015, the company announced it would sell pachinko machine CR Evangelion X nationwide, with a planned
launch in pachinko halls in September 2015.
June 2015
On June 29, 2015, the company announced the nationwide launch of CR Sakigake!!Otokojuku, a pachinko machine
manufactured by Daiichi Shokai Co., Ltd. This machine is scheduled to be installed in pachinko halls from August 2015
onward.
On June 23, 2015, the company announced the nationwide launch of CR Martian Successor Nadesico, a pachinko
machine manufactured by Bisty Co. This machine is scheduled to be installed in pachinko halls from July 2015 onward.
On June 1, 2015, the company announced a share transfer agreement with Aristocrat International Pty Ltd. regarding
the acquisition of K.K. Aristocrat Technologies.
The company has entered into an agreement with Aristocrat International (Australia) to acquire all shares in Aristocrat
Technologies, a consolidated subsidiary of Aristocrat International that develops, manufactures, and sells pachislot
machines in Japan.
Reasons for the acquisition
Aristocrat International established Aristocrat Technologies as a wholly owned subsidiary in 1994. Together with
Aristocrat group company Spiky Corporation, Aristocrat Technologies has since produced a succession of hit titles,
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including the Kyojin no Hoshi (Star of the Giants) and the Black Lagoon series. Fields—an independent trading
company—and Aristocrat Technologies have forged strong ties in the amusement machines industry through the sale of
Aristocrat Technologies products.
Fields and Aristocrat International began negotiating the efficient use of Aristocrat Technologies’ assets after Aristocrat
International announced that it was exiting the Japanese market in April 2015. Fields thus agreed to purchase the assets
and shares of Aristocrat Technologies from Aristocrat International.
Upon forging ties with existing partner manufacturers, Fields plans to launch products that take full advantage of the
assets it has acquired in this deal. It is also considering the best way to utilize Aristocrat Technologies, including sounding
out potential partners.
The company does not expect this action to have any material effect on earnings results for FY03/16.
May 2015
On May 25, 2015, the company announced the nationwide launch of Biohazard 6, a pachislot machine manufactured by
Enterrise Co. This machine is scheduled to be installed in pachinko halls from July 2015 onward.
On May 22, 2015, the company announced the nationwide launch of Evangelion: Spear of Hope, a pachislot machine
manufactured by Bisty Co. This machine is scheduled to be installed in pachinko halls from June 2015 onward.
April 2015
On April 30, 2015, Fields Corporation announced a revision to its dividend forecast (a special dividend commemorating
the company’s listing on the First Section of the Tokyo Stock Exchange).
On April 14, 2015, the company moved to the First Section of the TSE. It now plans to issue a special year-end dividend of
JPY10 per share commemorating this event. Together with an ordinary dividend of JPY25, the total year-end dividend will
be JPY35, meaning the company is forecasting a full-year dividend per share of JPY60.
On April 7, 2015, the company announced its listing on the First Section of the Tokyo Stock Exchange.
The Tokyo Stock Exchange has granted the company approval to change its listing. On April 14, 2015, Fields will move
from TSE JASDAQ (Standard) to the First Section of the Tokyo Stock Exchange.
February 2015
On February 3, 2015, the company announced that nationwide sales have begun for Pachinko Ultra Battle Retsuden, a
new pachinko machine manufactured by OK Co., Ltd. The new machine is scheduled to be installed in pachinko halls
beginning in March 2015.
January 2015
On January 14, 2015, the company announced that Nanashow Corp. will conduct a nationwide launch of its pachislot
machine BERSERK, part one. The new machine will be installed in pachinko halls in Japan beginning in March 2015.
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October 2014
On October 31, 2014, the company announced the domestic nationwide launch of pachislot machine Salaryman
Kintaro: Shusse Kaidou-hen, manufactured by Rodeo Corporation. The new machine will be installed in pachinko halls
beginning in January 2015.
On October 15, 2014, the company announced the nationwide release of a new pachinko machine from Bisty Co., CR
Evangelion 9. It is expected to be available at pachinko halls from December 2014.
August 2014
On August 8, 2014, the company announced the nationwide release of a new pachinko machine from Bisty Co., CR
ayumi hamasaki 2. It is expected to be available at pachinko halls from October 2014.
July 2014
On July 15, 2014, the company announced the nationwide release of a new pachislot machine from Enterrise Co.
“Sengoku BASARA 3”. It is expected to be available at pachinko halls from September 2014.
May 2014
On May 7, 2014, the company announced earnings forecasts for FY03/15.
FY03/15 earnings forecast:
▶
▶
▶
▶
▶
Sales: JPY100bn
Operating profit: JPY5bn
Recurring profit: JPY5bn
Net income: JPY2.5bn
Net income per share: JPY75.34
As a primary reason for the forecast, the company has entered new business partnerships with D-light Co., Ltd. and
NANASHOW Corporation in pachinko/pachislot machine sales. Meanwhile, the company is holding numerous
conscientious discussions with Sammy Corporation and RODEO Co., Ltd. regarding the overall approach to their business
affiliation. As a result, Fields is not including products produced by RODEO in its forecast with the exception of one title,
production of which has been postponed from FY03/14 to FY03/15.
On the same day, the company announced a business alliance with D-light Co., Ltd., a member of the Daiichi Shokai
Co., Ltd Group.
Daiichi Shokai and the company agreed on the use of Fields’ intellectual property and nationwide logistics network to
support the creation and development of new pachinko/pachislot machines with a high degree of novelty, leading to the
business alliance for conducting joint business with D-light.
On the same day, the company announced a business alliance with NANASHOW Corporation.
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According to the company, NANASHOW is a pachinko/pachislot machine manufacturer that joined the Japan Amusement
Machine Industry Association in 2013. Fields holds 210 shares of NANASHOW’s common stock with a stake of 38.9%.
March 2014
On March 18, 2014, the company announced a revision to its FY03/14 earnings forecast.
Revised FY03/14 earnings forecast:
▶
▶
▶
▶
Sales: JPY114bn (previous forecast: JPY120bn)
Operating profit: JPY9.6bn (JPY12.5bn)
Recurring profit: JPY10.3bn (JPY12.5bn)
Net income: JPY5.2bn (JPY6.3bn)
The pachislot business held steady from efforts by the company to strengthen and enhance its product lineup. However,
the company modified the release date of a new machine to FY03/15, and this required a revision to its FY03/14 earnings
forecast. In interactive media, Fields moved to concentrate its efforts on select social game titles in order to increase
intellectual property value and maximize revenue. As a result, the company stated that number of titles released in
FY03/14 decreased.
Top management
Top management
Hidetoshi Yamamoto
Founded Fields in 1988. Chairman with responsibility for executing Company’s long-term vision.
Takashi Oya
President
Kiyoharu Akiyama
Vice President
Tetsuya Shigematsu
Vice President
Masakazu Kurihara
Managing Director
Akira Fujii
Managing Director
Kenichi Ozawa
Managing Director
Hiroyuki Yamanaka
Director, Planning and Administration Head Division Chief
Hideo Ito
Director and Corporate Division Manager
Teruo Fujishima
Director and Pachinko/Pachislot Business Management Division Manager
Nobuyuki Kikuchi
Director and Media Relations Business Division Manager
Eiichi Kamagata
Director and Imaging Produce General Manager
Shigesato Itoi
Outside Director
Employees
Fields employed 856 employees at the parent company (1,716 total consolidated group employees). Average age was
35.5, average salary was JPY6.51mn (both parent company) (As of March 31, 2015.)
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Major shareholders
As of the end of March 2015, the shareholder breakdown was as follows: individuals/other 57.25%, foreign institutions
18.73%, financial institutions 2.30%.
Top Shareholders
Hidetoshi Yamamoto
SANKYO CO., LTD.
Takeshi Yamamoto
Mint Co.
Northern Trust Company (AVFC) RE NVI 01
Amount Held
25.00%
15.00%
10.41%
4.61%
4.21%
Goldman Sachs and Campany Regular Account
2.02%
State Street Bank and Trust and Company 505103
Oya Takashi
State Street Bank and Trust and Company 505019
The Bank of New York Jasdec Account
1.63%
1.30%
1.25%
1.19%
Shareholder returns
The company adheres to the policy of paying dividends in line with its earnings levels. Specifically, Fields determines
dividend amounts based on cash flow status with a yardstick of the 20%+ consolidated payout ratio.
Investor relations
The company hosts quarterly analyst meetings following earnings announcements.
In July 2012, the company improved the content of its English IR website, adding “Top Message” (message from
chairman and president) “Financials” (description of the company’s business results, financial statements, segment data,
etc.), “CSR” (message from COO, etc.), and other information.
(Click here to visit the English IR website.)
By the way
▶
▶
Chosen by Daiwa Investor Relations Co., Ltd. as recipient of its “2014 Internet IR Excellence Award.”
Chosen by Nikko Investor Relations, Co., Ltd. as recipient of its “Best Corporate Website” award in 2014.
Awarded Gomez IR Site Comprehensive Ranking 2014, Silver Medal announced by Morningstar Japan K.K.
Glossary
ART Machine: An abbreviation of Assist Replay Time, an ART Machine is a type of pachislot machine. When this function is
installed, if the machine enters ART mode, the odds of a replay increase, allowing the user to continue playing without
using up coins.
AT Machine: An abbreviation of Assist Time, an AT Machine is a type of pachislot machine. During regular play, even if the
user selects the winning icons, they do not match up on the screen because of the push-order rule. However, when the
AT function is installed, if the machine selects the AT mode, a display screen on the pachislot machine will indicate the
order of the buttons to press to match up the icons on the screen, allowing the user to increase their coins.
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IP: Intellectual property, such as characters of comics
License business: A business that grants the rights to use characters to other companies (licensees) and receives license
fees in return.
Merchandizing: Monetization of original IP or secondary IP, obtained from right holders, by planning, developing, and
selling games, goods, and pachinko/pachislot machines.
Glossary (machine terminology)
Model test: A test for a pachinko or pachislot machine of whether it complies with the technological standards set under
regulations, conducted by the Security Communication Association, the authorized inspection organization.
Sub-board: A central processing unit (CPU) of a pachislot machine that takes charge of displays for music and songs and
other supplementary elements, other than main functions like drawing lots and controlling reels.
CR machine: A card reader machine, used only by inserting prepaid cards.
Nichidenkyo: The Japanese acronym for the Japan electronic game machine industry association, an industry group of
pachislot machine makers.
Nichiyukyo: The Japanese acronym for the Japan association of game machine-related businesses, a cross-border
organization of pachinko/pachislot halls, game machine makers, trading firms, peripheral equipment makers, wholesalers
of prizes, and others.
Nikkoso: The Japanese acronym for the Japan Game Machine Industry Association, an industry group of pachinko
machine makers.
Hotsukyo: The Japanese acronym for the Security Communication Association, an inspection organization designated by
the National Public Safety Commission that conducts model tests for pachinko and pachislot machines.
Main board: A central processing unit (CPU) of a pachislot machine that takes charge of main functions like drawing lots
and controlling reels.
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Company profile
Company Name
Head Office
Shibuya Garden Tower
Fields Corporation
16–17 Nampeidai-cho
Shibuya-ku
Tokyo, Japan 150–0036
Phone
Listed On
+81–3-5784–2111
Tokyo Stock Exchange 1st Section
Established
Exchange Listing
June 10, 1988
March 19, 2003
Website
Fiscal Year-End
http://www.fields.biz/ir/j/
March
IR Contact
IR Web
Watanabe
http://www.fields.biz/ir/e/
IR Mail
IR Phone
[email protected]
+81–3-5784–2111
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