Earnings Presentation for the FY2020: Question & Answer Session (Summary)

From 12:00 on Friday, May 14, 2021, FIELDS CORPORATION held a financial results briefing (conference call) for the fiscal year ending March 31, 2021
This page provides an overview of the main questions and answers (summaries) at the briefing.

Question & Answer Session (Summary)

[Pachinko and pachislot (hereinafter, “PS”) related]

Q1: Please tell us about the forecast of total unit sales in the PS market for the next fiscal year.

A1: Assuming that approximately 1.5 million old regulation machines will be replaced by new-regulation machines, the Company expects total market unit sales in the FY2021 to be around 1.6 million units.

Q2: Please tell us about the status of the application and passing test ratio of the Security Communications Association.

A2: The applications to Security Communications Association remains crowded, and it is difficult to accept such applications, as the number of applications submitted to Security Communications Association is nearly 100 per day. Passing test ratio is recovering slightly, with pachinko about 40% and pachislot about 30%.

Q3: The deadline for the removal of the old regulation machine has been extended, so we would like to know the impact on the marketplace and your company.

A3: There is no change to all old regulation machines scheduled to be removed during FY2021.
We believe this is a good news for the market and us, as it is able to gradually remove machines each month and expect to be able to replace them more stably than in the past. On the other hand, as the impact of declaration of state of emergency and other factors remains uncertain, the Company is also continuing to scrutinize its current sales and future forecasts.

Q4: Can we think that there will be no self-restraint in replacements even when the Olympics are held?

A4: Industry groups have issued documents stating that they will continue to systematically remove and replace the machines from July to September, during the Olympic, and we recognize that there will be no restraint on replacements during the period.

Q5: What is your outlook for the number of units sold since the removal of the old regulation machine?

A5: In PS market in FY2020, the number of pachinko hall declined by a little less than 8% YoY, while total number of machines installed in the market declined only slightly. Based on this assumption, if the removal of the old regulation machines is completed as scheduled, the average number of units sold in the next few years will probably remain at the actual level of FY2021.

Q6: In focusing on the digital and DX fields, are there any possibilities for incorporating external resources through M&A, etc.?

A6: The Company may utilize M&A, etc. for evolving the various services such as “PS Information Station.”


Q7: Please tell us about Tsuburaya Productions’ main measures.

A7: A major measure launched in the fiscal year under review (FY2020) is a subscription service “TSUBURAYA IMAGINATION”, which is a collaboration with NTT DOCOMO. In addition, the comic version of “Ultraman” was launched in North America from MARVEL COMICS, and it received a response. Other than that, works aimed at kids and families have had a very good record.
For the next fiscal year (FY2021), “SHIN ULTRAMAN” is considered the largest title. The Company also plans to take a variety of measures this summer, including new TV programs for children and tie-ups with major companies. In addition, the Company will begin full-fledged development of titles for the global market, such as CG anime movie “Ultraman,” which will be jointly produced with Netflix.

Q8: Will the joint production of Tsuburaya Productions and Netflix continue in the future and continue to generate revenues?

A8: Tsuburaya Productions and Netflix have been involved to date in the distribution of the full 3DCG anime “ULTRAMAN,” etc., and the title has a certain track record, including deciding to produce season 2 due to its popularity. Our Group has great hopes for the CG anime film announced this time amid this trend and we will continue to deepen our relations with Netflix as a good business partner in the future.

Q9: Please tell us about the size of the investment amount, the timing of recording revenue, and the production company regarding the works of joint production of Tsuburaya Productions and Netflix.

A9: The production is handled by Industrial Light & Magic. We will refrain from details at this time regarding the size of the investment amount and the timing of recording revenue.

Q10: I would like to hear your company’s outlook on “SHIN ULTRAMAN”’s contribution to earnings.

A10: Although it is difficult to predict a specific amount, the recently released “EVANGELION: 3.0+1.0 ” by Hideaki Anno has recorded a revenue of ¥8.3 billion at this point, and we are also looking forward to “SHIN ULTRAMAN.” In the future, we would like to convert both works into merchandise, and when they materialize, we would like to deliver them to everyone as a merchandise that further highlights the attractiveness of the works.


Q11: I think the entertainment industry is in a transitional period of generational change. I would like you to tell me how you think about the development of your company’ s successors.

A11: We are already building a system in which young employees can play a central role in growing the company.
As a distributor and trading company in the PS industry, we have grown the company with sales expertise, which has strengths in the number of branch offices and sales employees nationwide. Going forward, in order to quickly build a foundation for a stable PS business in a mature market, the Company will work to strengthen its “sales capabilities” utilizing DX (Digital Transformation) and other technologies. This change in direction requires a radical overhaul of the sales-related activity process, so the Company intends to actively hire young people capable of handling DX and other issues and promote generational change in all situations.
In April, Takashi Yamamoto, the son of me (Hidetoshi Yamamoto), was selected as Corporate Officer of the Group Strategy, and in the next few years, we will nurture him to become a major force for the growth of the Company.

Q12: Are there possibilities to enter the game-related business as part of a new business?

A12: Centered on Tsuburaya Productions, the Company is advancing its business not only in the gaming field, but also with a view to expanding its digital business utilizing IT technologies.

Q13: When will you announce the medium-term management plan?

A13: With regard to the medium-term management plan announcement, the Company will announce the details that incorporate the specific strategies of “building a foundation for a stable PS business in a mature market” and “shifting to an IP company,” in conjunction with the timing in which it will be able to announce results forecasts for the next fiscal year.

Q14: Amid a dramatic rise in the market reputation of IP stocks and recognized companies across the board, I would like to hear about the company's plans, measures, and prospects for investing and M&A in order to shift to an IP company centered on Tsuburaya Productions and others.

A14: In order to shift our group to an IP company, we will cultivate two companies, Tsuburaya Productions and Digital Frontier, as global companies. Based on the prospect of expanding and horizontally deploying the knowledge and systems gained there in the next step, the strategic initiatives that had been underway at both companies produced tangible results in 2020.
Looking ahead, I think the key points will be the creation of new large-scale IP and the shift to the digital field. I would like to explain these details when announcing the medium-term management plan.