Financial Results Presentation

Transcription

The 12th Term Third Quarter
Financial Results Presentation
CROOZ, Inc.
JASDAQ Standard; Code 2138
The 12th Term Third Quarter Financial Results Presentation
A g end a
Starting off
Strategy
This quarter's good news
What are the important fourth quarter policy points?
What devices will we focus on?
Business
What regions will we focus on?
What does CROOZ, Inc. do?
What is our global strategy progress?
What sort of games do we provide?
What technologies are we improving?
What are our major titles?
What are the strengths of CROOZ?
How is our global strategy playing out?
How popular are we?
Results
What kinds of trends exist for sales?
Shareholder return policy
What is the policy on return to shareholders?
What are the trends in regard to dividends and payout ratios?
What kinds of trends exist for ordinary income?
How was our performance this quarter?
How was our performance compared to last fiscal year?
What is our progress status?
Lastly
A special notice
What is the mid-to-long-term vision (dream) at CROOZ?
FAQ
Reference: What are social games?
This quarter’s good news
An important message
We have a very special announcement on the last page.
Please look forward to it.
Social game sales are 1.5 times better
The two leading titles = RAGNABREAK and Avalon
“ HUNTER x HUNTER Battle Collection ” is expected to
outpace these two titles in the fourth quarter,
contributing significantly to sales and profit,
so there is a lot of potential here.
* HUNTER x HUNTER belongs to our affiliate ForGroove,
so we expect more of a contribution to profit than sales.
Th is q ua r t er ’ s g o o d new s
Our sales for this quarter were 4.119 billion yen, significantly higher than
our previous record, and a 1.394 billion yen increase ( +51% ) from last
quarter’ s sales total of 2.725 billion yen.
The number of users playing “ Supernatural Succession! RAGNABREAK, ” our
main social game which started appearing nationally in TV commercials in
October, has increased together with the increase in sales.
But the good news doesn’ t stop there! Our new social game “ The Knights
of Avalon ” released on October 10 has quickly grown even more popular
than RAGNABREAK, significantly increasing the entire company’ s top line
sales. Also, with “ HUNTER x HUNTER Battle Collection ” ‘s release on
December 23 at the third quarter’ s end, it too is progressing well along
with RAGNABREAK and Avalon, as yet another positive contributor to our
fourth quarter results and beyond.
Before getting into details regarding these favorable results,
allow me to introduce CROOZ.
?
What does CROOZ, Inc. do
CROOZ provides Internet-based services worldwide.
Tokyo
CROOZ,Inc.
Established May 24, 2001
ForGroove, Inc.
Established January 23, 2012
Seoul
NEW
CROOZ Korea Corporation
Established December 6, 2012
San Francisco
Singapore
CROOZ America, Inc.
Established August 1, 2012
CROOZ Asia Pte.Ltd.
Established July 26, 2012
Current services are centered on social games.
?
What sort of games do we provide
Users (10,000s)
455
181
201
2Ｑ
3Ｑ
256
523
609
1027
875
703
333
92
1Ｑ
10th term
2010
2011
4/20
3/4
4Ｑ
1Q
2Q
3Q
4Q
11th term
2Q
3Q
12th term (this term)
2012
4/18
1Q
8/1
5/2
↑Released by our affiliate
ForGroove
7/13
↑ Global version of
Mobage title
10/10
3/13
6/13
9/6
7/25
3/16
12/23
9/13
3/30
↑Title for Yahoo! Mobage
↑Released by our affiliate ForGroove
W h a t so rt of g a m es d o w e p r o v i d e?
Year 1 - 10th term
As our first title, we released Nekketsu Kouha Kunio Battle for Mobage. It became a
hit, and next we released another licensed title, Shounan Bakusou-Zoku, which also
sold well, making us one of Mobage’ s top social application providers.
Year 2 - 11th term
We continued to release character-based hits one after another, such as Sengoku
Battle! Kunio-Kun (Mobage award winner) and Team and Resistance! Gang King. In
addition, we released an original title, Supernatural Succession! RAGNABREAK, our
biggest hit to date.
Year 3 - 12th term (current)
Our No. 1 title, Supernatural Succession! RAGNABREAK continues to grow. We also
released our first overseas title Deity Wars, and are beginning to develop globally.
“The Knights of Avalon” and “Hunter x Hunter Battle Collection ” continue to maintain
hit status as well, contributing to our rapid growth.
*User numbers are for users of current CROOZ services only. Users for cancelled services or services planned for cancellation have been excluded.
?
What are our major titles
Card battle games using high-quality illustrations for appeal.
W h a t a r e o ur m a j o r t i t l es ?
Supernatural Succession! RAGNABREAK is our main title.
Known for its high-quality card illustrations outmatching other card
battle games, it exceeded one million users in its first 6 months, and
has currently exceeded 1.5 million users.
It has also ranked in the Mobage Top 20 for 7 months in a row, was
ranked number 1 overall by mixi game ranking, and the iOS version
was ranked number 1 free game by the App Store the day after it
was released. Because of this, its fan base continues to grow for
various devices and platforms.
?
A real-time guild battle game ,
taking place in a parallel world to RAGNABREAK.
“ The Knights of Avalon ” is our second main title.
This is a real-time guild battle game, taking place in a parallel world
to RAGNABREAK. It exceeded 500 thousand users in its second
month since release.
And it has ranked in the Mobage Top 20 for 3 months in a row.
?
Title from our affiliate ForGroove
A card battle game under copyright of the popular anime.
“ Hunter x Hunter Battle Collection” is our third main title.
This is based on a copyrighted top-class anime, rising above dozens
of competitors. It exceeded 500 thousand users in approximately 20
days from release. It also ranks in Mobage’ s Top 15 smartphone and
feature phone games.
?
How popular are we
Mobage ranking for games released in 2012 or later:
2nd
3rd
4th
CROOZ games make up 3 of the top 5 Mobage titles.
H o w p o p ul a r a r e w e?
As of January 26, 2013, CROOZ games “Hunter x Hunter Battle
Collection,” “Supernatural Succession! RAGNABREAK,” and “The
Knights of Avalon” ranked 12th, 13th, and 14th respectively in
Mobage’ s Top 20 smartphone game ranking.
Excluding titles released in collaboration with DeNA Co., Ltd, CROOZ
titles ranked 2nd, 3rd, and 4th on Mobage’ s Top 5 released in
2012 or later, establishing our name as a hit-producing company for
Mobage.
?
4,119
83
What kind of trends exists
Internet contents
Internet commerce
839
Internet solutions
(Millions of yen)
2,749
88
2,725
51
396
388
2,321
2,252
68
82
366
388
2,089
75
1,774 368
78
2,284
1,781
1,480 1,491 402
129 113
463
404 140
104
19
36
263 304
1Q
8th term
2Q
535
113
18
696
100
32
950
122
114
867
105
50
851
122
75
654
714
2Q
3Q
404
564
713
3Q
4Q
1Q
9th term
1,273
2,264
107 220 327
1,038
1,644
172
905 113
1,294
94 144
1,051
126
1,131
994
782
685
4Q
1Q
2Q
10th term
3Q
4Q
1Q
3,196
2Q
3Q
11th term (Last term)
1,887
4Q
1Q
2Q
3Q
12th term (This term)
W h a t k in ds of t r end s ex i s t f o r s a l es ?
Our sales for the third quarter were 4.119 billion yen. This is a 51% increase
(+1.394 billiion) from the second quarter sales total of 2.725 billion yen, and
marks a new company record by a wide margin.
This is due in part to the airing of a TV commercial for our main title
“Supernatural Succession! RAGNABREAK,” increasing the number of users,
which ultimately led to an increase in sales.
Another contributor to our increase in sales is “The Knights of Avalon,” which
was released in the third quarter and continues to grow popular at a faster
pace than RAGNABREAK.
We also credit active promotion of our online shopping site “SHOPLIST.com
by CROOZ” as a significant contributor to increased sales.
From the fourth quarter and beyond, “Hunter x Hunter Battle Collection”
sales will be added to the robust trends of RAGNABREAK and Avalon after its
release on December 23.
* Sales generated from advertising services in the 9th term and earlier have been excluded.
?
What kinds of trends
exist for ordinary income
Ordinary income (millions of yen)
1,955
290
（4Q）
Ordinary income ratio (%)
1,665
196
6.1％
8th term
422
（3Q）
475
（2Q）
21.4％
21.8％
13.8％
355
（1Q）
12.1％
9th term
(Full-year forecast)
1,253
（ 3Q Total ）
1,129
443
2,000
10th term
11th term
(Previous term)
12th term
(This term)
What kin ds of t re n ds e xist f o r o r d i na r y i nc o m e?
Our ordinary income for the third quarter was 422 million yen. This is a
decrease of 53 million yen from the previous quarter’ s ordinary
income of 475 million yen.
This decrease was due to a wide range of promotional activities in the
third quarter for “Supernatural Succession! RAGNABREAK” and our
online shopping site “SHOPLIST.com by CROOZ.”
The profit-related contribution of these wide-scale promotional
activities will go into full swing next term. Sales since last quarter are
projected to jump more than 1.5 times (+1.394 billion yen) due to this
active investment, for a large increase in base ordinary income.
Also, the fact that “Hunter x Hunter Battle Collection” has been doing
well since it’ s December 23 release in the late third quarter will
contribute to an increase in base ordinary income.
*Ordinary income for the 8th term includes ordinary income made through advertising services.
?
How was our performance this quarter
(Millions of yen)
Previous quarter
Sales
2,725
Jun. – Sep.
This quarter
Oct. - Dec.
Compared to
Previous quarter
4,119 +1,394
+93
418
（+51％）
Personnel costs
325
Subcontracting costs
194
199
Advertising costs
160
749
+588
Operating profits
472
419
−52
302
257
−45
Term net profit
（+28％）
+5
（+2%）
（+365%）
（−11％）
（−15%）
Sales increased by 51% due to TV ads
and other promotional activities.
How w a s o u r pe rf o r m a nc e t hi s q ua r t er ?
Sales increased by 1.394 billion yen (+51%), and operating income
decreased by 52 million yen (-11%).
The increase in sales is due in part to TV commercials promoting our main
social game “Supernatural Succession! RAGNABREAK,” and active promotion
of our online shopping site “SHOPLIST.com by CROOZ,” which in turn led to
an increase in users. Another contributing factor is “The Knights of Avalon,”
which reached hit status in league with RAGNABREAK.
The wide-scale promotion of “Supernatural Succession! RAGNABREAK” and
“SHOPLIST.com by CROOZ” resulted in advertising costs of 749 million yen
(588 million yen more than the previous quarter), for a temporary drop in
operating income. However, this investment is projected to increase our
base ordinary income by a wide margin.
Also, the fact that “Hunter x Hunter Battle Collection ” has been doing as
well as RAGNABREAK and Avalon, since it’ s December 23 release in the late
third quarter, will contribute to an increase in base ordinary income.
?
How was our performance compared to last fiscal year
(Millions of yen)
Sales
Same Term
Last Year (Total) This Term (Total)
Apr. - Dec.
6,613
Apr. - Dec.
Compared to
Last year
9,097 +2,483
+553
1,020
（+37％）
Personnel costs
467
Subcontracting costs
435
594
+159
Advertising costs
560
1,083
+522
1,663
1,243
−419
972
765
−207
Operating profits
Term net profit
（+118％）
（+36%）
（+93%）
（−25％）
（−21%）
Sales increased by 37% , showing that growth is still strong.
How was our performance compared to last fiscal year?
Sales increased by 37％ (+2.483 billion yen).
This increase in revenue is due to our business growth in the social
gaming sector.
However, operating income decreased by 25% (-419 million yen). This
decrease is due to higher business costs as a result of growth.
Costs in particular that rose include personnel costs, associated with
highering engineers needed for social game operation and development
(+553 million yen), and advertising costs, used to actively promote
“Supernatural Succession! RAGNABREAK” and our online shopping site
“SHOPLIST.com by CROOZ” (+522 million yen). However, the decrease in
operating income is only temporary, as a way to increase top line sales,
which will lead to a continuous increase in operating income in the near
future.
What is our progress status
?
(Millions of yen)
Total 3Q
results
Full-year
performance
estimate
Sales
9,097
11,000
82％
Operating profits
1,243
2,000
62％
765
1,200
63％
Term net profit
Progress rate
An increase in fourth quarter sales is projected to
wield a large increase in profits
W h a t is o ur p r o g r es s s t a t us ?
Our full-year performance estimate includes a rate of progress at 82% for
sales, 62% for operating income, and 63% for term net profit.
Profit might appear a bit low, but we have recently achieved record sales,
and we estimate that base profit will increase by a wide margin starting in the
fourth quarter.
As an additional note on performance, we have already recorded record
single-month sales and profit numbers for January in the fourth quarter. Profit
will decrease in February and March due to wide-scale promotional plans for
those months, but we estimate record top line sales again from April of next
term, as well as a profit recovery period. However, we currently don’ t have
any wide-scale promotional plans for that period.
?
What are the important
fourth quarter policy points
Other than
card battle
Under development
Card battle
We will focus limited assets on
our 3 main titles and new titles.
W hat are the im port a n t f o u rt h qua r t er p o l i c y p o i nt s ?
We will focus our limited assets of people, equipment, and money
on our three main titles , “Supernatural Succession! RAGNABREAK,”
“The Knights of Avalon,” and “Hunter x Hunter Battle Collection,”
continue to revamp user interface, and strive to increase the
number of users.
We are also developing new original games as continuations of
RAGNABREAK and Avalon.
?
What devices will we focus on
No. of monthly unique visitors (smartphone)
Percentage of smartphones users
53.8％
50.0％
39.7％
31.6％
25.0％
3Q
10th Term
4.7％
11.7％
4Q
1Q
12.3％
11th term
2Q
3Q
4Q
1Q
2Q
3Q
12th Term (This term)
We will focus energy on smartphones to increase the number of users.
W h a t de v ices w i l l w e f o c us o n?
We are focusing on providing social games for smartphones.
The result, the percentage of smartphone users visiting our main
titles has increased steadily each quarter, and today 53% of all
visitors use smartphones.
*The number of monthly unique visitors and percentage of smartphone users were determined for our main social games only.
*The feature phone image used in this presentation was extracted from NTT DOCOMO’ s website.
The smartphone image was extracted from Apple Japan’ s website.
?
What regions will we focus on
East Asia (Japan, South Korea, China)
North America (USA, Canada)
Population: 1.52 billion people
GDP: 14.29 trillion USD
Population: 350 million people
GDP: 16.83 trillion USD
We will focus on the large markets of East Asia and North America .
What regions will we focus on?
We will focus distributing games to the large markets of East Asia
(Japan, South Korea, China) and North America (USA, Canada).
We have currently localized and released “Supernatural Succession!
RAGNABREAK” for North America as “Deity Wars,” and for China as
“Shén Mó Chuánchéng.”
?
How is our global strategy playing out
CROOZ
Planning/development
Marketing
NEW
CROOZ America
CROOZ Asia
CROOZ Vietnam
Marketing
Marketing
(Coming soon)
Development
Marketing
NEW
CROOZ Korea
Planning/development
Marketing
We are currently organizating new local development teams
in South Korea and Vietnam.
How is o u r globa l s t r a t eg y p l a y i ng o ut ?
We are actively pursuing globalization of our social games to win over
users throughout the world.
As a matter of policy, we are actively establishing bases in regions with
large markets, or markets with potential to expand. We are performing
marketing activities in each of the countries we are based in, in order to
meet local needs, and provide services considered acceptable by the
local community.
We are also organizing overseas development teams with the objective
of strengthening technical capabilities and development speed. First we
will start off with South Korea , where the social gaming market
is growing rapidly, and Vietnam , where personnel cost is inexpensive .
What is our global strategy progress
CROOZ Korea
CROOZ Vietnam
CROOZ
Development bases
We will start developing new games
targeting users on a worldwide scale.
W h a t is ou r global s t r a t eg y p r o g r es s ?
CROOZ is now focusing on the East Asian market (Japan, South Korea,
China) and North American market (USA, Canada). So far we have
established marketing bases in five countries within those regions:
Japan, Singapore, USA, South Korea, and Vietnam (planned). We are
also organizing development teams outside of Japan in South Korea and
Vietnam (planned).
Phase 1 of our base establishment plan is now complete. For CROOZ to
attain its next level of growth, we will transition from the planning
phase, and begin developing new games for worldwide users .
The success of these new games will ensure a portion of profit from
overseas in addition to Japan, starting next term for CROOZ.
?
What technologies are we improving
Creative technology
Development power
Systemized through our Venus accelerated development framework
Delivery technology
G4
Four technologies
Universal network technology
Infrastructure power
Systemized through our Zeus common infrastructure base
Communicative technology
Marketing power
Systemized through our Compass marketing database
Visual technology
Design power
Outlined in the four articles of our Blue Fire design guidelines
What technologies are we improving?
We are mainly focused on improving four technologies.
We believe these four technologies, called G4 , are vital to long-term
survival in any sort of network-based business.
Development power
Infrastructure power
Marketing power
Design power
Creative technology
Delivery technology
Communicative technology
Visual technology
*For details regarding the four articles of our Blue Fire design guidelines, please refer to our website.
?
What are the strengths of CROOZ
Compass
Marketing database
Analysis of areas to be tuned up
S4
Four Systems
Innovative technological infrastructure
Venus
Accelerated development framework
Agile tuning operations through piecemeal development
Zeus
Common infrastructure base
A network capable of handling heavy loads on demand
Chronometer
Accelerated business system
Optimizing daily routine work
What are the strengths of CROOZ?
CROOZ continually strives to be a technologically powerful company .
In particular, we value systems that ensure high-quality, do not require
special skills, and allow for effective and highly productive work.
This philosophy helped to create one of our company’ s strengths, a
technological infrastructure system made up of four major technologies.
We call this system S4 and work each day to enhance it.
Compass
Venus
Zeus
Chronometer
Marketing database
Accelerated development framework
Common infrastructure base
Accelerated business system
※For further information regarding each system, please refer to our website.
?
What is the policy on return to shareholders
① As a general rule, aim to distribute dividends every term
② Aim to achieve a payout ratio of 30% or higher
③ Recognition among all employees of the importance of dividends
④ Recognition among all employees of the importance of
operating income
⑤ Aim to heighten mid-term stock prices by achieving
our corporate vision
⑥ Consider various methods to improve liquidity of shares
⑦ Consider an investment unit price which will encourage
more investors
⑧ Boost internal reserves and create a term where investment
plays a bigger role than dividends
What is the policy on return to shareholders?
Once per quarter, CROOZ officers and executives take a retreat together and review
the return policy to shareholders based on stock prices and financial conditions.
(1) As a general rule, we seek to ensure income that will allow us to pay dividends to shareholders each
term. CROOZ has paid dividends since the term following listing.
(2) We aim to achieve a payout ratio of 30% so we can make returns to as many investors as possible.
(3) We are creating an environment where all employees, not just officers and managers, recognize the
importance of dividends. As a concrete example of our policy, employee bonuses are calculated based on
the source of dividends to shareholders.
(4) We are creating an environment where all employees, not just officers and managers, recognize the
importance of operating income. As a concrete example of our policy, officer remuneration and manager
salaries are calculated based on the operating income of the previous term.
(5) We do not aim for short-term increases in stock prices, but increases in the mid-term based on
achieving our corporate vision.
(6) We are considering various methods to improve the liquidity of our shares, aiming to secure 2,200 or
more shareholders in the mid-term. (As of late September 2012, we have 4,890 shareholders.)
(7) We are considering an investment unit price which will encourage a large number of investors.
(8) We will boost internal reserves and create a term where investment which makes a good profit in the
long term plays a bigger role than dividends
?
What are the trends in regard
to dividends and payout ratios
term 12th term
8th term 9th term 10th term 11th
(Last term)
(This term)
Dividend per share
(JPY)
Total dividends
(millions of yen)
Dividend payout
ratio (%)
1,500 1,500 1,500
225
562
24
61
189
191
191
28.0
22.5
28.9
16.7
16.0
CROOZ has been paying dividends each term since the term after listing
What are the trends in regard to dividends and payout ratios?
CROOZ has succeeded in paying dividends each term since the term
after listing.
As explained earlier, in this term we are working on creating
high-quality original games and actively expanding globally, so our
policy is to bolster our internal reserves.
Because of this, we plan to pay the same total of dividends as the
previous term, but will work to increase dividends and dividend
ratios with our performance and business situation in mind.
Stock splits were performed on October 1, 2010 and March 1, 2011. Figures calculated prior to these have been adjusted to reflect the splits.
*The 7th term dividend includes the portion commemorating the first anniversary of the company’ s listing worth 225 JPY.
*The dividend payout ratio for the 9th term is a theoretical figure that assumes deductions of irregular factors such as extraordinary losses.
*Figures for the 12th term represent forecasts made by CROOZ as of the date of preparation of this material.
That is all for the third quarter
earnings announcement,
However...
To end our meeting today,
We have a special announcement.
RAGNABREAK and Avalon have bumped up our top line,
and sales have been revised upward by 2.5 billion yen.
Initial Sales Forecast
Current Sales Announcement
11 billion yen
13.5 billion yen
for a 22% increase
*Since we will carry out a wide range of promotional activities
in the fourth quarter, there will be no change in profit forecast.
A s p ec i a l no t i c e
Due to positive business results, our full-year sales forecast for this term
has been revised upward from our initial forecast of 11 billion yen,
to 13.5 billion yen .
That is an increase of 22% (+2.5 billion yen) from the previous
announcement.
We will continue carrying out the wide range of promotional activities
from the third quarter into the fourth quarter, which will ultimately
expand top line sales for this term and secure a number of users.
Because of this, there will be no change of profit forecast at this time.
One more thing...
About that new game we released
at the end of the third quarter on December 23...
In only 20 days since release,
it has brought in over 500 thousand users.
Title from our affiliate ForGroove
Hunter's contributions to profit will start in the fourth quarter.
Another special notice
“Hunter x Hunter Battle Collection” was just released at the end of
the third quarter on December 23, and brought in 500 thousand
users in a mere 20 days on the market. This game is advancing at
a faster pace than RAGNABREAK and Avalon.
“Hunter x Hunter Battle Collection” ‘s contributions to profit will
start in the fourth quarter.
Lastly...
A wide range of promotional activities
in the fourth quarter,
combined with our new “HUNTER x HUNTER” title,
will further increase our top line sales and user count.
This growth will really start contributing to profit
numbers in April of next term.
Something to look forward to.
?
What is the mid-to-long-term vision (dream) at CROOZ
To create Omoshirokakkoi
Fun and Cool
Example
The Knights of Avalon
A real-time guild battle game, and
sequel to RAGNABREAK
Tech Hills
A technical study session held by CROOZ to
pursue the possibilities of next-gen technologies.
Launched in October of last year, and exceeded
100,000 users only 3 days after release. It has
ranked in Mobage’ s Top 20 for more than 3
months, and is one of our most popular social
games with over 500 thousand registered users
to date.
With a vision to be recognized as Japan’ s most important
technical study session, various themes are researched, such as
Japan’ s most prominent tech businesses, new technologies,
new gadgets, and new platforms.
More than 100 people have attended each session, with over 400
technicians in attendance at the 4th and most recent session,
“The Impact of UI/UX: Project Secrets for Drawing in Users.”
That wraps up our earnings announcement.
But from this point we'd like to list
FAQ and reference materials ,
so please feel free to continue looking.
FAQ
Plus Twitter-like comments from Obuchi
FAQ
We have gathered commonly-asked questions into this FAQ.
Q: How many employees work at CROOZ?
A: 323 (as of late third quarter)
Q: Why does the number of employees increase by more than 50 during the third quarter only?
A: Most were mid-career employment as developers for social games.
Investing in the future has given us development power to spare.
Q: What is the ratio of genders at CROOZ?
A: About 80 percent male, 20 percent female.
Q: What is the average age at CROOZ?
A: 30.(As of the end of last term)
Q: What is the job distribution like at CROOZ?
A: About 80% of the staff works in a technical or creative position. The remaining 20% works in marketing and the
back office.
This ratio is unlikely to change. We are a technological company, and most of our employees are technical workers.
Q: How many new employees will CROOZ hire over the next year?
A: If we find capable human resources, there is no limit to how many people we will hire, and then challenge in a
number of different ways.
We will accept lower profits compared to last year and greater personnel expenses if it
means gathering talented individuals. Investing in the future is paramount. We strike while the iron is hot.
Q: What is the average length of service for employees at CROOZ?
A: 2 years. (As of late last term)
We had over 100 new hires last term. Yet our average length of service remains
the same, due to the positive workplace environment we offer.
*Twitter images extracted from the Twitter website.
FAQ
Q: What is the turnover rate?
A: 9.5%. (As of the end of last term)
This is reasonable at an IT company. That rate won’ t go up or down.
Q: What is the average salary at CROOZ?
A: 5.3 million yen. (As of the end of last term)
With an average age of 30, this puts us among the top in the industry. And it’ ll go up a bit more, too.
Q: How many employees are working on social game development?
A: About 230. This number includes creators and designers, but excludes our infrastructure team.
We’ ll keep adding more.
Q: Do you believe the growth of social games will continue?
A: Yes.
Q: What are the strengths of CROOZ social games?
A: In addition to killer content unavailable from competitors, we have created and systemized our core systems like
development framework, marketing database, network infrastructure, etc.
We also have the industry know-how required to release original games as hits.
Q: Can you tell us the status of social games based on title?
A: That information is not made public.
Q: Can you tell us detailed KPI on social games?
A: That information is not made public.
Q: What are CROOZ’ s strengths as a company?
A: Systemized core systems for our development framework, marketing database, network infrastructure, etc.
FAQ
Q: Will you tell us the mid-term business plan at CROOZ?
A: We can't do that. Just as the fact that no one predicted that Mobage would become a huge media entity five years
ago taught, the changes in this industry come hard and fast, which means that quick, flexible reactions to the
environment are more important than solid planning.
In the IT business, speed is king. Thinking five years ahead is good, but looking right ahead is better. Rather than
thinking of profits planned for five years from now, creating a system and corporate culture that can handle change
seems wiser.
Q: What are CROOZ’ s major projects in the near future?
A: We plan to deepen our presence in the social games and actively expand into the global market over the next year
or two.
Q: What efforts is CROOZ making in the smartphone field?
A: All new mobile services are being planned and developed with smartphones as a base, and released at a date no
later than for feature phones.
In addition to global operation, we are working to improve our smartphone services.
Q: CROOZ donated 5 million yen in the wake of the earthquake and tsunami. How else does CROOZ plan to contribute
to society?
A: We try not to be a company that contributes only in the wake of the earthquake, but one that naturally contributes
through everyday activity.
CROOZ donates 100,000 yen to a guide dog fund with every new social game title released, taking profit generated by
sighted users who enjoy our games, and trying to help those with visual impairments enjoy life more.
FAQ
Q: What is your current business scheme?
A: There is still plenty of room for growth in social games, using original titles as an axis. We aim to multiply the scope
of our sales. In the near future we will actively work to obtain global sales.
We believe we can be the top SAP.
Q: What is your current target demographic?
A:Male users in their 30s or older. This group is our biggest payer of user fees.
Q: They say your officers are on average the second youngest of all listed companies. Tell us more about that.
A: Every July, Toyo Keizai issues a report on officers for all listed companies and our company’ s officers ranked the
second youngest out of 3,595. The total average for officers was 59.6 years old and our average was 36 years old.
Q: CROOZ had the second highest rate of stock price increases in 2011. Tell us more about that.
A: For the year-to-date (January 2011 to late August 2011) CROOZ is number two in the rate of stock price increases
for major IT companies, even against famous names.
Further, CROOZ is part of the major representatives of JASDAQ on the JASDAQ-TOP 20 two years in a row.
Q: Real-money trading (RMT) is a problem cropping up in recent social games. What do you think of this issue?
A: We believe it is a hindrance toward the healthy enjoyment of games. We will monitor the problem carefully and work
together with platforms to implement policies and methods to deal with it.
FAQ
Q: Did the cancellation of “complete gacha” services affect profits or KPI?
A: There was almost no effect.
Q: I saw something about the Asia Diva Audition in a press release. What sort of event is it?
A: It is an audition held sponsored by us to discover the next generation of fashion artists.
Its aim is to unearth Asia’ s female singing talent. By using CROOZblog, one of Japan’ s largest blog sites, we are able to
choose from 7 million women who are then screened, tested for singing skills, then carefully chosen by popular vote by
CROOZblog users.
The 1st Asia Diva Audition’ s Grand Prix Artist is Momoyo Fukuda.
Q: The press release called it an incredible first in the music industry. Could you give us more information?
A: After wowing audiences by taking the Grand Prix in our Asia Diva Audition, Momoyo Fukuda’ s (affiliated with Label
Line, Inc.) debut song, Dear Best Friend, was ranked #1 on RecoChoku’ s daily single ranking on July 11.
She debuted after only 38 days and in a single day her song toppled those by established artists, making her tale a
modern Cinderella story.
Q: You’ re also holding other events, such as “Gotōchi! Zeppin! Umai Mon Kōshien” for agricultural high school students
across the country. What is the profit forecast for this?
A: We’ re really not sure. But profit is not the objective in this case. CROOZ is also involved in other activities, such as
planning on-the-job training events, in cooperation with Tokyo Metropolitan Office of Education, for public junior high and
high school students in the metropolitan area. Sometimes we organize special classes for local vocational students in
Hokkaido and other regions as well. In conjunction with conducting business, we feel it is our important duty to offer
these sorts of events to the younger generation, as an opportunity to fulfill their dreams, as they will be the backbone of
Japan’ s economy into the future.
FAQ
Q: Why did you establish affiliate companies in Singapore and San Francisco?
A: Our affiliate company in Singapore will serve as a marketing base for Southeast Asia and China. Offshore development
is also taking form there.
Our affiliate company in San Francisco is to serve as a marketing base for North America, the market we will pursue most
aggressively in the near future. We will actively work to obtain profits there.
?
Reference: What are social games
Packaged games
Social games
Wii
PS3
Desktop game consoles
Mobile phones, PC
W h a t a r e s o c i a l g a m es ?
Packaged games
Wii
One-time sale model
Continuous revenue generating model
Basically played by 1 or 2 players with limited
Basically played by multiple players; abundant
communication
communication and highly entertaining
There is great risk in relation to the profitability
Stable revenue generation as user inputs can
of these games as they cannot be modified after
be reflected instantly and improvements can
they are put on the market.
be made
Game machine manufacturers:
PS3
Social games
Game software developers:
Nintendo, Sony, etc.
Game site operators:
Capcom, Sega, etc.
DeNA, GREE, etc.
Game application providers:
CROOZ ,Drecom, etc.
Desktop game consoles
Mobile phones, PC
（Wii、PS3、Xbox360）
(Cell phone and Smartphone, PC)
Glossary “Social games”
Games offered as social applications via SNS (social networking services).
*Wii screens and game software pictures in this material have been extracted from the website of Nintendo.
Playstation 3 screens have been extracted from the website of Sony Computer Entertainment Inc. Mobage screens have been extracted from the website of DeNA Co., Ltd.
Facebook images have been extracted from the Facebook website. Images of notebook computers have been extracted from the Hewlett-Packard Japan website.
?
What is our business model
Approximately
Approximately
59,870 thousand users
122,890 thousand
Approximately
users in total
Approximately
Game Platforms
mixi
Yahoo!Mobage
Mobage
Google Play
App Store
W h a t is o ur b us i nes s m o d el ?
We provide Nekketsu Kouha Kunio Battle and other social games through the
Mobage game platform from DeNA Co., Ltd. Anyone who owns a mobile phone
through NTT docomo, au, and softbank are potential customers .
We earn revenue from fees paid by users who access game platforms including
Mobage, Yahoo!Mobage, mixi, Google Play, and App Store via mobile phone
networks.
*Number of users: Extracted from the website of the Telecommunications Carriers Association
*Logos images have been extracted from the websites of NTT DOCOMO, Inc., KDDI CORPORATION, SOFTBANK MOBILE Corp.,
DeNA Co., Ltd., mixi, Inc., Google, and Apple Japan respectively.
?
How does CROOZ make profit
￥500
We sell incredibly powerful weapons for only 500 yen.
How does CROOZ make profit?
In the case of Nekketsu Kouha Kunio-Kun (RENEGADE):
An action game in which the player trains and strengthens the character
to fight against enemies cooperatively with friends
“I could have won
if I had this weapon.”
“I’ ll go to the item shop
and buy this weapon.”
“With this weapon,
I have become more
powerful. I can now
play more effectively!”
Fee income
Revenue from
selling items
To start
“I could have won with
this weapon, but I am not
sure I want to pay for it.”
User loses against
the opponent
Point!
“By introducing this game
to a friend and having
them register, I was
rewarded with the item!”
Increase in users
Users solicit
friends to join
CROOZ earns revenue from selling weapons that strengthen the character,
and the reduction in the required training time of character, as well as other features
“With this weapon,
I have become more
powerful. I can now
play more effectively!”
How large is the game software market
Nintendo
Online games
3DS / DS
137.6
133.2
billion yen
Mobile
games
69.6
billion yen
billion yen
Social games
Playstation3
465 billion yen
billion yen
63.2
（as of 2012）
31.5
Wii/WiiU billion yen
40.7
billion yen
PS VITA
PSP
How large is the game software market?
The social game market has grown to account for 465 billion yen in 2012.
This means the market has grown far beyond that of Wii and PlayStation3
software seen in TV commercials.
*Market sizes for the game software of each console are assumptions based on company calculations as of late January 2013.
?
What is the future
outlook on market size
(100s of million yen)
5,750
4,650
Online games
1,376
Nintendo 3DS/DS
1,332
Mobile games
696
PlayStation3
632
PS VITA/PSP
519
Wii/WiiU
442
2,650
1,389
447
0
5
60
157
2005
2006
2007
2008
2009
2010
2012
2012 2013(Year)
What is the future outlook on market size?
Social games play a leading role in the game software market.
Social games pulled in 465 billion yen in 2012, making them the
undeniable kings of the game software market.
The social game market will continue to grow, expected to exceed
500 billion yen per year in the near future.
*Market information is estimated via company calculations as of late January 2013, based on material provided by the Mobile Content Forum and Mitsubishi UFJ Morgan Stanley Securities.
Are social games really profitable
∼ Brand Ranking: Number of times aired on TV commercials ∼
1st place
Mobage
2nd place
GREE
3rd place
Ameba
4th place
SoftBank Mobile
5th place
Aeon
6th place
NTT docomo
7th place
Uniqlo
8th place
DeNA
9th place
McDonald’ s
10th place
Daihatsu
2,316
1,829
1,396
1,239
1,154
1,025
1,004
894
867
772
times
times
times
times
times
times (Mobage excluded)
times
times (MOVE)
times
times
Are social games really profitable?
In terms of the number of times TV commercials aired, Mobage ranks
first and GREE ranks second.
This indicates that in today’ s Japan, companies focusing on social games
as a source of revenue, such as GREE and Mobage, are extremely active
in respect to their presence on TV commercials.
Today, social game providers are comparable to firms such as NTT
DOCOMO and McDonald’ s, providing common services everywhere,
which society cannot do without.
*Kanto area data extracted from Video Research Comhouse Ltd. website, December 2012.
Points to note
The material herein contains mid-to-long-term plans and
forecasts made by CROOZ.
The information contained in these pages is not
intended to guarantee the future business results of the
company and bears certain risks and uncertainties.
As business forecasts are affected by various factors and
prone to change, we ask the reader to refrain from
relying solely on the information presented herein.

Financial Results Presentation

Transcription

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