Result Briefing for the Three Months Ended December 2009

FY2010
Result Briefing for the Three Months
Ended December 2009
Dwango Co., Ltd.
DWANGO Co., Ltd.
February 4, 2010
FY2010
Born in the net, Connected by the net
Cautionary Statement
• The forward-looking statements, including earnings
forecasts included in this document are determined by
the DWANGO Group based on information available at
the time of writing.
• Future figures involve a number of uncertainties, and
actual results may differ materially. Please refrain from
relying wholly on these forecasts in making investment
decisions .
DWANGO Co., Ltd.
Copying in part or whole is prohibited.
2
FY2010
Born in the net, Connected by the net
Overview of Consolidated Results for the Three Months Ended December 2009
(Unit: Million Yen)
Net Sales
(Growth Rate)
Gross Profit
(Growth Rate)
(Gross Profit on Sales)
Operating Income
(Growth Rate)
(Operating Income Margin)
Ordinary Income
(Growth Rate)
(Ordinary Income Margin)
Net Income
(Growth Rate)
(Net Income Margin)
DWANGO Co., Ltd.
Previous Term
Term under Review
FY2010 Forecast
2008/10-2008/12
2009/10-2009/12
2009/10-2010/9
6,960
7,626
31,200
16.4%
9.6%
17.4%
3,239
3,254
12,100
29.5%
46.5%
0.5%
42.7%
15.7%
38.8%
496
443
600
-%
7.1%
(10.6%)
5.8%
51.1%
1.9%
484
438
600
-%
7.0%
(9.5%)
5.8%
75.3%
1.9%
286
303
450
-%
4.1%
5.9%
4.0%
-%
1.4%
Copying in part or whole is prohibited.
3
FY2010
Born in the net, Connected by the net
Cost of Goods Sold
(Unit: Million Yen)
Previous Term
2008/10-2008/12
(% of total sales)
53.5%
Personnel Costs
3,721
947
Commission and
Fees Paid
Cost of Goods Sold
Manufacturing Costs
Royalties
Outsourcing Costs
Communication Costs
Other Expenses
(Account Transfers)
DWANGO Co., Ltd.
Term under Review
2009/10-2009/12
(% of total sales)
57.3%
13.6%
4,372
1,023
386
5.6%
341
4.5%
1,164
903
369
380
(430)
16.7%
1,301
948
445
916
(605)
17.1%
13.0%
5.3%
5.5%
(6.2%)
13.4%
12.4%
5.8%
12.0%
(7.9%)
Copying in part or whole is prohibited.
4
FY2010
Born in the net, Connected by the net
SG&A
(Unit: Million Yen)
Previous Term
2008/10-2008/12
(% of total sales)
Selling, General and
Administrative Expenses
Term under Review
2009/10-2009/12
(% of total sales)
2,742
39.4%
2,810
36.9%
Advertisement
Expenses
962
13.8%
1,043
13.7%
Personnel Costs
443
6.4%
485
6.4%
Commission and
Fees Paid
678
9.7%
761
10.0%
Research and
Development Expenses
436
6.3%
244
3.2%
Others
222
3.2%
276
3.6%
DWANGO Co., Ltd.
Copying in part or whole is prohibited.
5
FY2010
Born in the net, Connected by the net
Segment Overview
(Unit: Million Yen)
Mobile
Business
Net Sales
Game
Business
Portal
Business
Others
Eliminations/
Corporate
Total
4,574
1,599
1,299
420
(267)
7,626
(Growth Rate)
6.8%
(7.1%)
104.2%
15.1%
-%
9.6%
Cost of Goods Sold
2,113
969
1,167
388
(267)
4,372
(Growth Rate)
8.9%
53.5%
32.6%
23.8%
-%
17.5%
(% of total sales)
46.2%
60.6%
89.8%
92.3%
-%
57.3%
2,460
629
132
32
(0)
3,254
(Growth Rate)
5.0%
(42.2%)
-%
(37.5%)
-%
0.5%
(% of total sales)
53.8%
39.4%
10.2%
7.7%
-%
42.7%
1,438
319
270
82
700
2,810
(Growth Rate)
21.1%
(43.9%)
17.0%
20.4%
2.1%
2.5%
(% of total sales)
31.5%
19.9%
20.8%
19.5%
-%
36.9%
1,021
310
(138)
(49)
(700)
443
(Growth Rate)
(11.5%)
(40.2%)
-%
-%
-%
(10.6%)
(% of total sales)
22.3%
19.4%
(10.7%)
(11.8%)
-%
5.8%
Gross Profit
Selling, General and
Administrative Expenses
Operating Income
DWANGO Co., Ltd.
Copying in part or whole is prohibited.
6
FY2010
Born in the net, Connected by the net
Mobile Business
Comparison to
Forecast
1Q Result
Net Sales
4.57 billion
▼60 million
Cost of Goods
Sold
2.11 billion
▼0. 24 billion
SG&A
1.43 billion
Operating Income
1.02 billion
Comparison to
Previous Term
▲ 0.29 billion
Growth in purchase ratio of Chaku-Uta
Full® titles with high unit prices
▲ 0.17 billion
Increase in royalties due to growth in sales
of Chaku-Uta Full® titles
▲ 10 million
▲ 0.25 billion
Increased advertising expenses due to
mobile advertising
▲ 0.18 billion
▼ 0.13 billion
Mainly due to reduction in royalties
accompanying shortfall in pay-perdownload service sales
Change in Number of Members
（Unit：Thousand）
Trend on Net Sales and Operating Income Margin
1,200
(Unit: Million Yen)
50.0%
5,000
1,000
4,284
4,497
4,485
4,588
4,574
40.0%
4,000
800
27.0%
600
3,000
400
2,000
200
1,000
29.4%
30.0%
24.1%
22.0%
22.3%
20.0%
10.0%
0
0
1Q
2Q
3Q
4Q
FY2009
Ringtones
DWANGO Co., Ltd.
Chaku-Uta®
1Q
0.0%
1Q
2Q
FY2010
Chaku-Uta Full®
3Q
4Q
FY2009
Sales
1Q
FY2010
Operating Income Margin
Copying in part or whole is prohibited.
7
FY2010
Born in the net, Connected by the net
Mobile Business: Changes in Number of Unique Users and ARPU
* Excluding members of NICO NICO MOBILE
Continued growth of purchase ratio of CHO!animelo and Chaku-Uta Full® sites
(Unit: Thousand)
(Unit: Yen)
5,000
420
Unique Users
ARPU
399
4,500
393
377
4,000
381
383
378
394
398
400
380
380
3,500
360
3,691
3,800
3,843
3,850
3,834
3,851
3,859
3,821
3,900
3,000
340
2,500
320
2,000
300
Dec.
2007
Mar.
Jun.
Sep.
2008
Dec.
Mar.
Jun.
Sep.
Dec.
2009
Source: Dwango Internal Analysis
DWANGO Co., Ltd.
Copying in part or whole is prohibited.
8
FY2010
Born in the net, Connected by the net
Game Business
Comparison to
Forecast
1Q Result
Comparison to
Previous Term
Net Sales
1.59 billion
▼ 0.45 billion
Mainly due to shortfall in package
game sales and deferral to second
quarter
▼ 0.12 billion
Cost of Goods
Sold
0.96 billion
▼ 0.30 billion
Reduction in outsourcing costs
accompanying shortfall in sales
▲ 0.33 billion
SG&A
0.31 billion
▼ 10 million
▼ 0.25 billion
Operating Income
0.31 billion
▼ 0.14 billion
▼ 0.20 billion
Reduction in research and development
expenses
Trend on Net Sales and Operating Income Margin
(Unit: Million Yen)
2,000
50.0%
1,721
1,599
40.0%
30.0%
30.2%
20.0%
19.4%
754
1,000
817
0.0%
-10.0%
3.2%
-5.8%
0
2Q
3Q
FY2009
Sales
DWANGO Co., Ltd.
380
-20.0%
-30.0%
-29.5%
1Q
10.0%
-40.0%
4Q
1Q
FY2010
Operating Income Margin
Copying in part or whole is prohibited.
9
FY2010
Born in the net, Connected by the net
Portal Business
Comparison to
Forecast
1Q Result
Comparison to
Previous Term
Net Sales
1.29 billion
▲ 40 million
▲ 0.66 billion
Mainly due to increase in income
from Premium Members
Cost of Goods
Sold
1.16 billion
▼ 20 million
▲ 0.28 billion
Increase in outsourcing costs from
NICO NICO LIVE
SG&A
0.27 billion
▲ 30 million
▲ 30 million
Operating Income
(0.13 billion)
▲ 30 million
▲ 0.33 billion
Trend on Net Sales and Operating Income Margin
(Unit: Million Yen)
1,500
50.0%
1,299
30.0%
1,045
1,000
10.0%
-10.7%
876
-10.0%
722
636
-30.0%
-46.9%
500
-51.6%
-57.1%
-50.0%
-74.7%
-70.0%
0
-90.0%
1Q
2Q
3Q
4Q
FY2009
Sales
DWANGO Co., Ltd.
1Q
FY2009
Operating Income Margin
Copying in part or whole is prohibited.
10
FY2010
Born in the net, Connected by the net
Other Businesses
Comparison to
Forecast
1Q Result
Comparison to
Previous Term
Net Sales
0.42 billion
▲40 million
▲50 million
Cost of Goods
Sold
0.38 billion
▲60 million
▲70 million
82 million
▼10 million
▲10 million
(49 million)
▼10 million
▼30 million
SG&A
Operating Income
* Major breakdown of sales: Royalty income from music titles published by animation business, and income from school and artist
management businesses
Trend on Net Sales and Operating Income Margin
(Unit: Million Yen)
1,400
50.0%
1,200
1,110
30.0%
1,000
800
600
400
-0.9%
10.0%
2.3%
-4.5%
365
420
395
-14.3%
-10.0%
-11.8%
232
200
0
-30.0%
1Q
2Q
3Q
4Q
FY2009
Sales
DWANGO Co., Ltd.
1Q
FY2010
Operating Income Margin
Copying in part or whole is prohibited.
11
FY2010
Born in the net, Connected by the net
DWANGO Co., Ltd.
Copying in part or whole is prohibited.
12
FY2010
Born in the net, Connected by the net
DWANGO Co., Ltd.
Copying in part or whole is prohibited.
13
FY2010
Born in the net, Connected by the net
Changes in Number of Members for NICO NICO DOUGA
(As of January 31, 2010)
Registered Users
Premium Members*
Mobile Members
Increasing at a monthly pace of 350 K
Increasing at a monthly pace of 30 K
Increasing at a monthly pace of 120 K
15.64 Million
650 Thousand
4.71 Million
(Unit: 10 K)
(Unit: 10 K)
1,800
15.28 Million
1,600
80
(Unit: 10 K)
620 K
70
1,400
600
4.59 Million
500
60
1,200
400
50
1,000
40
300
800
30
600
400
20
200
10
0
200
100
0
0
Sep.
Dec.
Mar.
Sep.
Dec.
9月 12
月 3
月 6Jun.
月 9
月 12
月 1Jan.
月
2008∼
2009∼
2010
Sep. Dec. Mar. Jun. Sep. Dec. Jan.
9 月 12 月 3 月 6 月 9月 12月 1 月
2008∼
2009∼
2010
Dec. Mar. Jun. Sep. Dec. Jan.
9Sep.
月 12月 3 月 6月 9 月 12月 1月
2008∼
2009∼
2010
* Premium Members = Paying members --- For 525 yen a month, or a 90-day ticket priced at 1,680 yen, members receive access to a dedicated line
for a premium viewing experience, priority viewing of live broadcasts, and a host of other benefits.
DWANGO Co., Ltd.
Copying in part or whole is prohibited.
14
FY2010
Born in the net, Connected by the net
Attributes of NICO NICO DOUGA Users
(As of December 31, 2009)
By Age
Male ６８％
40s
7.1%
Others
2.2%
50s
2.3%
40s
8.3%
10s
20.5%
30s
21.5%
20s
45.3%
Others
2.0%
50s
1.9%
10s
23.9%
30s
19.3%
20s
45.8%
Female ３２％
50s
1.1%
40s
4.6%
30s
14.5%
Others
1.5%
10s
31.4%
20s
47.0%
For about every 2 people in their 20s, one NICO NICO DOUGA user exists.
This amounts to 6.99 million users for a population of about 14.05 million people in their 20s, as posted by the Ministry of
Internal Affairs and Communications.
DWANGO Co., Ltd.
Copying in part or whole is prohibited.
15
FY2010
Born in the net, Connected by the net
Revenues from NICO NICO DOUGA
Trend on Sales
(Unit: Million Yen)
1,600
Figures in parentheses indicate
values for 4Q FY2009
Figures only indicate results of NICO NICO DOUGA
related Portal businesses
1,300
Points, Others
Advertisement
※
*
Premium Membership
1,200
Results for 1Q FY2010
(Unit: Million Yen)
Affiliate Advertisement
1,400
Breakdown of Sales
1,200
1,100
1,276
（1,023）
3.6％ （3.8）
4.4％ （5.3）
18.9％ （19.5）
Premium Membership:
933 (4,581)
Advertisement
:
241 ( 961)
Affiliate Advertisement:
56 ( 180)
1,000
Costs
900
1,000
1Q
(Full-year
Results Projection)
(Unit: Million Yen)
800
Points, Others
:
46 ( 212)
Total Sales
: 1,276 (5,935)
700
800
600
500
600
73.1％ （71.4）
400
400
● No. of registered members : 15.28 million
300
(Full-year projection) 18.00 million
200
200
● No. of premium members : 620 thousand
100
0
(Full-year projection) 850 thousand
0
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
FY2008 FY2008 FY2008 FY2008 FY2009 FY2009 FY2009 FY2009 FY2010
1Q1Q
14
期
FY2010
*Before impairment (FY2009)
DWANGO Co., Ltd.
Copying in part or whole is prohibited.
16
FY2010
Born in the net, Connected by the net
NICO NICO DOUGA Usage
(1Q FY2010: Dwango Internal Analysis)
Average visitors per day
Average PVs per day
Average PVs per day
(Unit: 10 K)
(Unit: 10 KPV)
300
7,000
63.39 Million PVs (62.86)
6,000
5,000
Average visitors per day
250
4,000
2.38 Million (2.36)
3,000
200
2,000
Average sojourn time
per visit
1,000
150
0
37.6 minutes (37.3)
*Above results indicate NICO NICO DOUGA total.
Figures in parentheses indicate results for 4Q FY2009.
3Q
FY2008
4Q
FY2008
1Q
FY2009
2Q
FY2009
3Q
FY2009
4Q
FY2009
1Q
FY2010
NICO NICO LIVE Usage
Average PVs per day
Average visitors per day
Average sojourn time
per visit
3.30 Million PVs (3.25)
0.20 Million (0.14)
79.5 minutes (87.1)
DWANGO Co., Ltd.
Copying in part or whole is prohibited.
17
FY2010
Born in the net, Connected by the net
Trends in Number of Premium Members 1 “NICO NICO LIVE”
The real shared experience generated by communication via live video proved popular and contributed to income
NICO NICO LIVE
Examples of Popular Shows and Trends in Viewer Numbers
■ Breaking past records! Dwango special
"Winter! Xmas! Comment!
13-hour Live Broadcast!"
◆Total no. of viewers: 300 thousand/Total no. of
comments: 2.50 million
◆Cast: Masatoshi Hamada, YOU, Hakuryu, Sho Aikawa,
Aki Yashiro, Kazumi Morohoshi, Kunikazu Katsumata,
GACKT, Takanori Nishikawa, and others
90
80
70
60
AVATAR
アバター
12.23公開記念
タイタニックの監督
ニコ生独占
インタビュー！
12.21（月）15：15∼
DWANGO Co., Ltd.
160
No. of viewers (Unit: 10 K)
140
120
100
50
40
30
20
■ The First NICO NICO LIVE broadcast from overseas
10
Live broadcast of Space Shuttle Atlantis launch
0
◆NICO NICO LIVE's cameras headed directly to NASA.
Broadcast live from overseas, the show featured
interviews with NASA personnel.
No. of official programs
80
60
40
20
0
Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
Time Shift
『ＡＶＡＴＡＲ』
■■映画
Live broadcast
of the公開記念
deliberations of the
third working group
『ジェームズ・キャメロン監督
独占インタビュー』
New Function
Live
broadcast of
the Government Revitalization
◆『タイタニック』
などを手掛け、先日ゴールデングローブ
Unit's
budget screening
賞を受賞したジェームズ・キャメロン監督に、映画公開に
The new Time Shift function lets users make advance bookings to view one
live show that has already finished per month with the original comments.
The function will be supported on official live broadcasts from October and
on NICO NICO USER’S LIVE/NICO NICO CHANNEL LIVE from December.
◆先駆けニコニコが独占取材
During this live broadcast, the show took polls on user's
verdicts and the actual verdicts given by the working
group both before and after the actual verdicts were given.
*Premium members can book after the broadcast has finished and
are also allowed to book up to ten shows
Copying in part or whole is prohibited.
18
FY2010
Born in the net, Connected by the net
Trends in Number of Premium Members 2 “NICO NICO MOBILE”
The ease with which payments can be made, the offering of NICO NICO LIVE to general members, and other factors
helped the number of premium members from NICO NICO MOBILE to continue to increase steadily.
Trends in Premium Members Registration Using Mobile Payment
NICO NICO MOBILE
(Unit: 10 K)
30
25
20
15
au
Officially supported
Monthly billing
starts
NICO NICO LIVE
offered to general
members using NTT
DOCOMO and
SOFTBANK (WiFi
models)
NTT DOCOMO
Free trial menu
starts
NTT DOCOMO
NICO NICO LIVE for
premium members only
starts
NTT DOCOMO
Monthly billing
starts
10
DOCOMO
au
5
SOFTBANK
Total
0
Mar.
DWANGO Co., Ltd.
Apr.
May
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
Copying in part or whole is prohibited.
19
FY2010
Born in the net, Connected by the net
Trend on Advertising Revenue
While the sluggish economy continued to exert an influence, sales steadied and 1Q projections were achieved.
Trend on Sales
Ad Client's Attributes
(Unit: Million Yen)
450
400
300
Total number of clients
Total ads placed
Advertising sales
Game
250
350
300
200
250
150
200
150
100
100
50
50
0
0
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
FY2007 FY2007 FY2008 FY2008 FY2008 FY2008 FY2009 FY2009 FY2009 FY2009 FY2010
Client Base
DWANGO Co., Ltd.
1Q FY2009 1Q FY2010
Segment
千
PCs/Peripheral Equipment/Software
Video/Music/Publications
Commodities/Toys
Cosmetics/Beauty/Hair
School/Education
Fashion/Accessories
Human Resources
Information/Communication
Finance/Security/Insurance
WEB Services
Travel/Leisure
Food/Drink
Car/Motorcycle
Real Estate/Construction
Others
39.0%
14.8%
3.1%
5.5%
3.3%
11.4%
6.0%
2.1%
2.9%
1.9%
1.0%
2.6%
1.9%
0.2%
0.2%
4.0%
45.2%
18.2%
4.2%
2.1%
1.8%
1.2%
6.7%
2.3%
2.1%
0.9%
5.0%
5.9%
2.9%
1.2%
0.0%
0.3%
Ajinomoto, Otsuka Pharmaceutical, Mazda, Volkswagen, NTT, KDDI, Dell, VISA, JCB, and others
Copying in part or whole is prohibited.
20
FY2010
Born in the net, Connected by the net
NICO NICO POINTS
While NICO NICO points currently only have a small impact on revenue, growth is steady.
NICO NICO points can be purchased with credit cards, WebMoney, and NTT DOCOMO’s mobile phone payment system
and can be used with the services below.
Services for which
points can be used
Trends in income from points
(Unit: Million Yen)
NICO NICO LIVE
NICO NICO
USER'S LIVE
60
50
Viewing of fee-based live
broadcasts
Reservation/extension of
broadcasting slots
40
Points set as necessary
500 pts.
30
USER ADS FOR
NICOVIDEO
NICO NICO
CHANNEL
Advertisements on
posted videos
Fee-based videos (payper-view)
From 100 pts.
From 100 pts.
DWANGO Co., Ltd.
20
10
0
3Q
FY2009
4Q
FY2009
1Q
FY2010
Copying in part or whole is prohibited.
21
FY2010
Born in the net, Connected by the net
NICO NICO CHANNEL
(As of December 31, 2009)
A range of official company video channels featuring everything from fee-based to free promotional content
Many channels also feature live broadcasts
Politics
●The Liberal Democratic Party of Japan ●The Democratic Party of Japan ●Social Democratic
Party ●Japanese Communist Party ●New Party Nippon ●The People's New Party
Institutions/
Corporations
●Ajinomoto ●SOFTBANK ●Adidas ●Ferrari ●Advertising Council Japan ●U.S. Army
Education/
Regional
●Komazawa University ●Teikyo University ●Kaetsu University ●Kyoto Seika University
●Tokushima Shimbun ●Saga Shimbun
Media
●NHK (Japan Broadcasting Corporation) ●TBS (Tokyo Broadcasting System) ●TV Tokyo
●Tokai Television Broadcasting ●Mainichi Broadcasting System ●Discovery Japan
Music/Movies
Animation/Games
Comedy/Sports
Example
Live
Broadcasts
DWANGO Co., Ltd.
●Warner Music Japan ●Pony Canyon ●Columbia Music Entertainment ●Toho-Towa
●Tezuka Productions ●Tsuburaya Productions ●Sega ●Sony Computer Entertainment
●Shochiku Geino ●Yoshimoto Fandango ●MASEKI GEINOSHA ●Rakuten Eagles ●All
Japan Pro-Wrestling
For a total of
211 channels
Copying in part or whole is prohibited.
22
FY2010
Born in the net, Connected by the net
Subsidiaries
Anime
Game
■Dwango Planning and
Development Co., Ltd.
Holding: 100%
□School management
■GAMES ARENA Co., Ltd.
Holding: 67.2%
□Planning and
supervision
■AG-ONE Co., Ltd.
Holding: 36.7%
□Content planning,
production, and
management
■CHUNSOFT Co., Ltd.
Holding: 100% (GAMES
ARENA Co., Ltd.)
□Planning, development,
and sales
Advertisement & Others
■Dwango Music
entertainment, Inc.*
Holding: 100%
□Production of
master recordings,
management of music
copyrights, sale of
CDs and DVDs
■niwango, inc.
Holding: 75.1%
□Information distribution
and movie distribution
■Spike Co., Ltd.
Holding: 100% (GAMES
ARENA Co., Ltd.)
□Planning, development,
and sales
■skyscraper,inc.
Holding: 70.7%
□Mobile advertisement
sales
■T&E SOFT Inc.
Holding: 100% (GAMES
ARENA Co., Ltd.)
□Planning and
development
■MOBILE CONTENTS
Co., Ltd.
Holding: 70.1%
□Content production
and supply
* On December 10, 2009, Dwango Music Publishing, Inc., (advertising and others) and dwango AG Entertainment CO., Ltd., (anime) merged and commenced operations under the name
Dwango Music Entertainment, Inc.
DWANGO Co., Ltd.
Copying in part or whole is prohibited.
23
FY2010
Born in the net, Connected by the net
For more information:
Public & Investor Relations
Dwango Co., Ltd.
E-mail ： [email protected]
◆Website ⇒ http://info.dwango.co.jp/
DWANGO Co., Ltd.
◆Mobile site⇒ http://info.dwango.co.jp/
Copying in part or whole is prohibited.
24