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Chart below shows the operating profit forecasts and results for the contents and digital business segment.
As a historical review, in the FY2021, the segment's operating profit was ¥1.46 billion, which was a record high for the time.
In this response, the company announced the 2022 medium-term management plan to accelerate global expansion and announced a three-year operating profit plan (see (1) in the chart). The company planned ¥2 billion for the first year, but this was ¥4.37 billion due to growth in the Chinese MD and license business in particular (see (2) in the chart).
In response to the fact that it greatly exceeded the plan from the first year of the medium-term management plan, the Company announced a new medium-term management plan for 2024 and beyond, and a three-year operating profit plan (see (3) in the chart).
In the FY2023, as a result of temporary inventory adjustments of existing card games and active investment, operating profit was ¥3.8 billion compared to the ¥6 billion plan (see (4) in the chart).
We take this outcome seriously and announce plans to move toward a new growth stage by clarifying areas for improvement in the future.

The previous fiscal year (FY 2023) and the current fiscal year (FY 2024) will be positioned as a thorough branding period to increase awareness and favorability, and to lay the groundwork for growth.
From FY2025, the company hopes to enter an aggressive growth phase.
Thereafter, the company aims to become a globally dynamic business entity based on a variety of content.

The first major factor supporting the growth of Tsuburaya Productions is the steady expansion of the fan base through continued product development. In Japan, three-generation fans are familiar. In overseas, particularly in China and other Asia countries, the development of over 10 years of TV series and other works has produced results, creating a very strong fan base centered on parents in their 30s and their children who have grown by viewing popular works such as Ultraman Tiga.
Second, Tsuburaya Productions is reforming its business model and is in the process of changing and growing to a new business model in addition to a stable growth model for B2B businesses. In addition to B2B businesses (mainly royalty income and licensing business revenues), the company is strengthening its B2B2C and D2C businesses as a business to expand globally. Currently, the company is in the midst of strengthening merchandise planning and development, further domestic expansion and cross-overseas expansion, and marketing in conjunction with merchandise development.

The company is promoting the development and expansion of distribution networks to deliver to each distribution partner or directly to fans. In addition, through marketing that utilizes CRM linked to Merchandise development, the company is further enhancing IP value and fostering communities. The company is currently building the flow of “1 Live events, 2 Merchandise planning and development, and 3 Development and expansion of distribution network” in order to expand the number of fans through the continuous development of the global market it serves.

The past live event business was conducted only domestically, and it was a very low-profit business. The COVID-19 pandemic had an extremely difficult situation with evens attendance of around 100,000 customers per year. However, the company changed its approach and implemented various measures to attract as many as 700,000 visitors. Ticket sales and product sales accompanying this have been extremely strong and are steadily expanding. We think there is plenty of room for growth, and in addition to the traditional Tokyo hosting of large-scale summer events, we plan to hold these events in Osaka from this year. In overseas, the company is also working to expand horizontal expansion using similar know-how.

In addition to the licensing business, the company is strengthening its merchandise planning and development. The expansion of live events enables the company to deliver merchandise planned and developed in-house to direct fans at the venues. Growth in terms of strengthening merchandise planning and development is ample, and further expansion in the domestic market and horizontal expansion in the overseas market are expected. Sales of MD and license, which were ¥1.5 billion as of FY2020, are projected to exceed ¥6.4 billion in FY2023 and ¥10 billion in the future.

An example of event-linked merchandise is “color timers," which are merchandise that customers who come to the event always buy so much.
In addition, in the e-commerce website of Tsuburaya Store, which we have developed independently, we are developing a variety of merchandise, including limited merchandise and collaborative merchandise through order-based sales. Due to merchandise categories and patterns that have not yet been launched, it is planned to be expanded in the future.

The company established a domestic retail organization in FY2021 and is working to expand its general sales channels. Domestically, the company launched the TSUBURATA STORE ONLINE on its own website. The company has also begun planning measures to expand the number of fans in cooperation with major retailers, and has begun activities to expand the sales floor by developing these measures with the cooperation of each licensee. Looking ahead, the company will work to develop and expand its distribution network, focusing on two bases in North America and Singapore.

With Tsuburaya Productions at its core, the North American base Tsuburaya Fields Media & Pictures Entertainment, Inc., Singapore-based Tsuburaya Fields Entertainment International Pte. Ltd., and the Group-based Digital Frontier will work together to engage in global businesses.

In terms of net sales growth among global business companies, revenues from events and related MD and license revenues from the development of visual products are steadily growing on a baseline basis.
Going forward, along with the rollout of new merchandise lineups, including card games, we will steadily grow the various merchandise categories.

During the period of the current medium-term management plan, the company will invest in new businesses and IP development, as well as structural reforms, with a view to achieving further growth. In the next fiscal year (FY 2024), the Company will focus on global promotional activities in line with the development of card games and new merchandise lineups, and will continue to invest a certain amount in the future. The company will also invest in video production, acquire and develop human resources in line with structural reforms, and strengthen its overseas bases.

The current fiscal year’s advertising expenses totaled ¥370 million, but in FY 2024 the company will aggressive invest more than ¥1 billion for thorough branding.
This will lead to new developments by branding, such as acquiring awareness of a wide range of targets. The company's policy is to maintain other fixed costs at a level below net sales growth rate.

Digital Frontier will work to restructure its business by developing new markets in North America and other regions and expanding its business globally, in addition to domestic VFX production and game-related contract development.
In the future, the Digital Frontier aims to reach net sales of ¥10 billion and become a Japanese-leading global content production company.

The table below shows the operating profit targets for the contents and digital business segment. For the next fiscal year (FY 2024), the company plans ¥4 billion, taking into account aggressive investments for further global expansion.
Following thorough branding up to the next fiscal year, from FY2025 onward, the company plans to move into an aggressive phase from FY2026, with a target of ¥10 billion in FY2027.

The market circumstances surrounding the amusement equipment business have bounced back since regulatory amendment/revised regulations in 2018 with the emergence of smart pachislot, and internal regulation is also easing to accelerate the penetration of smart machines.

i. Pachinko/pachislot machines (hereafter, "PS") sales (To sell attractive 12 pachinko and 12 pachislot titles per year)
[IP acquisition]
By strengthening ties with content holders through investment and other means, the Company will acquire leading IP and continuously develop and sell attractive PS machines.
[Pachislot]
The company has already established a system for selling 12 titles per year, and it will aim to establish a system that can develop 4 PB titles per year in three years from now.
[Pachinko]
Currently, the Company is aiming to further strengthen the system to achieve annual sales title of 12 titles in three years (currently 8-9 title per year). In private brand, we are strengthening our system so that we can develop 2-3 titles per year in three years time while currently selling just 1 title.

ⅱ. Peripheral equipment and construction of ACE DENKEN
Strengthen sales expertise: Build a robust sales structure capable of developing new projects and customers through sales collaboration with FIELDS.

Improve management efficiency: Work to optimize costs and improve profitability by integrating sales bases and integrating production and logistics bases.
We will work to develop, sell, and install the optimal peripherals that contributes to the automation of pachinko halls.

ⅲ. Initiatives for new profitable businesses
The company will accelerate initiatives in collaboration with DAIKOKU DENKI and form a new business in 3 years.

Following Evangelion, our leading hit series, PS featuring the new leading IP Tokyo Ghoul was also a major hit.
Going forward, the company will continue to develop and sell high-quality merchandise by acquiring leading IP and further strengthening its development and sales structure.

The chart below shows the 3-year operating profit plan for the amusement equipment business segment.

In the final year of the plan, the company is planning an operating profit of ¥18.5 billion for the FY2027.