Earnings Presentation for the H1 FY2021: Question & Answer Session (Summary)

From 11:30 on Friday, November 12, 2021, FIELDS CORPORATION held a financial results briefing (conference call) for H1 of the fiscal year ending March 31, 2022.
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: How about the trends in order receipt of the pachinko NEON GENESIS EVANGELION -Roar for tomorrow-?

A1: The machine has received expectations from pachinko halls in all aspects, including new chassis, specifications, and the first revamped handle mechanism in about 50 years. Thanks to the success of TV commercials broadcasted at the same time as sales, orders have exceeded expectations.

Q2: I would like to hear about the possible situations and outlook in the process of replacing the old-regulation pachislot machines (regulation 5 machines) that are still in the pachinko halls at the present time with the new-regulation machines (regulation 6 machines) by the end of January 2022.

A2: The removal of pachislot machines has lagged behind that of pachinko machines, and there are still about 500,000 old-regulation machines in pachinko halls (as of the end of October). According to our group’s survey, about half of those will be new machines delivered from each manufacturer by the deadline for removal. For the remaining half, while the main focus is on replacing used machines stored by each pachinko hall, it is speculated that some pachinko halls may try to temporary block some areas of the pachinko hall.

Q3: I would like to hear the evaluation of regulation 6.2 pachislot machine.

A3: Due to the small number of regulation 6.2 machine installed in the market, it is difficult to make a definitive assessment at this time. Going forward it is expected that machines with specs unique to regulation 6.2 will gradually appear, so we first would like to look forward to their operation.

Q4: I would like to hear about the impact of smart pachinko and pachislot on the industry.

A4: We recognize that the aim of introducing smart pachinko and pachislot is to promote ecology and cost reductions. Pachinko halls require initial investment, but if all smart pachinko and pachislot take the place of all the current machines, many advantages are expected in the future, such as reducing the noise of pachinko halls and the costs of machines.
The introduction of these machines is expected to progress gradually over multiple years.
* Smart pachinko: A pachinko machine with a mechanism in which pachinko balls are built into each machine and circulated
* Smart pachislot: A pachislot machine that manages the number of medals by data and can be played without using medals

Q5: I would like to hear about the impact on the industry of new bills to be issued in 2024.

A5: We are currently in the process of exchanging opinions and conducting surveys with relevant parties. At present, however, we estimate that the impact may be minor.

Q6: Are there any changes in the outlook for market unit sales in the current fiscal year? I would also like to ask about the market outlook for the next fiscal year.

A6: Since the revision of regulations in 2018, a succession of good products has appeared in response to new regulations. Considering this situation, we expect market unit sales for the fiscal year under review (FY2021) to slightly exceed the 1,600,000 units forecasted in May. The market unit sales for the next fiscal year (FY2022) is estimated at the present time, when extremely little information is available, but while there is potential to aim for 1,800,000 to 2,000,000 units, we think that it will remain in the range of 1,600,000 to 1,800,000 units, considering the risks of materials procurement, etc. due to the shortage of semiconductors.

Q7: I would like to ask you about your thoughts on the impact of a shortage of materials such as semiconductors.

A7: As mentioned above, while those impact on market unit sales is expected in the next fiscal year, we think there will be a difference between the forecast market unit sales by manufacturers and the procurement materials based on forecasts. We will work to make more sales with our partner manufacturers.


Q8: I would like to hear about the risks of regulations in China for Tsuburaya Productions (hereinafter, “TPD”)’ business.

A8: In China, TPD’s IP (intellectual property), including Ultraman, is extremely popular, and it is recognized as an important market for TPD. For this reason, we constantly recognize country risks, including regulations imposed by the Chinese government, and continuously monitor the situation through local distributors. Currently, TPD is working diligently to disperse risks by not only hedging risks within China, but also creating pillars other than China by increasing its share of other regions.
Although some TPD’s titles in China were suspended for distribution in the internet news and other media, we have also been able to manage risk in this matter, and have not been materially affected by this issue on our group.

Q9: I would like to hear about TPD’s business development and specific measures and regional development (priority regions, targets, products, apparel, etc.) in the medium term both domestically and overseas.

A9: Domestically, TPD is promoting an IP strategy of expanding its target base, and in addition to the development for the children and families that it has been working on from the past, it will expand its fans to include all-target customers, from young to adults.
In works for children and families, the Ultraman Trigger NEW GENERATION TIGA, which is currently being broadcast, has been well received, and merchandising based on this is also trending favorably. As a work that adults can also enjoy, TPD is working on the production of the movie SHIN ULTRAMAN, and is currently adjusting the release date.
The full 3DCG animations ULTRAMAN received favorable reviews, including winning first place in the “Japanese Most Viewed Animations” ranking in Netflix in 2019, and TPD plans to distribute season 2 in the spring of 2022. Animations such as SSSS.GRIDMAN and SSSS.DYNAZENON are also popular, and these merchandising are also trending steadily.
TPD is also developing its business in the digital domain, and launched “TSUBURAYA IMAGINATION”, a digital service platform as owned media, and “TSUBURAYA STORE ONLINE”, a proprietary e-commerce service. With these as a starting point, TPD will expand its digital business.
Overseas, TPD has positioned China, North America, and Asia (Taiwan, Hong Kong, Thailand, Malaysia, Indonesia, etc.) as priority regions. TPD and Netflix has already announced the joint production of Ultraman, a movie featuring CG animations. By expanding the range of titles produced overseas, it hopes to further expand its business.
In merchandise, sales of collectors’ items are trending favorably both domestically and overseas, in addition to toys for children that have been developed from the past. Going forward, TPD will further strengthen its development of apparel and other products.