Drecom Co., Ltd. · TSE:3793
Drecom — Q3 FY03/2025 Earnings Presentation
34 slides from Drecom's earnings presentation, Jan 30, 2025
Slide 1: FY03/2025 Q3 Financial Results Presentation
FY03/2025 Q3 Financial Results Presentation Drecom Co., Ltd. January 30, 2025 Please refer to the fact sheet on our website for detailed information on consolidated financial results, cost of sales, SG&A expenses, and billing revenue in the game business: https://drecom.co.jp/ir/factsheet_202503Q3.
Slide 2: Overview of This Document
Overview of This Document • Wizardry Variants Daphne, a new title released on October 15 (Q3), contributed to sales FY03/2025 ‒ Since the company self-distributes its games, in-house distribution leads to high gross sales but also incurs variable costs, such as payment processing fees. Additionally
Slide 3: Agenda
1. Review of Q3 (Oct-Dec) FY03/2025 2. Forecast for FY03/2025 3. Medium-Term Goals 4. Appendix Copyright Drecom Co., Ltd. All Rights Reserved. 3
Slide 4: Summary of Business Results for Q3 FY03/2025
1. Review of Q3 (Oct-Dec) FY03/2025 Summary of Business Results for Q3 FY03/2025 Following the Q3 release of Wizardry Variants Daphne, sales doubled quarter-over-quarter, driving the Company’s return to profitability. FY03/2025 FY03/2024 Q1 Q2 Q3 Q3 Total Q3 Q3 Total YoY QoQ YoY (Apr-Jun) (Jul-Sep)
Slide 5: Q3 FY03/2025 Results (YoY by segment)
1. Review of Q3 (Oct-Dec) FY03/2025 Q3 FY03/2025 Results (YoY by segment) Increased revenue and return to profitability due to the contribution of Wizardry Variants Daphne Decrease in Net Sales / Operating Income Increase in Net Sales / Operating Income Net Sales Operating Income (Millions of yen)
Slide 6: Q3 FY03/2025 Operating Income (QoQ comparison, by expense)
1. Review of Q3 (Oct-Dec) FY03/2025 Q3 FY03/2025 Operating Income (QoQ comparison, by expense) The increased revenue from Wizardry Variants Daphne offset higher advertising and operating costs, enabling the Company to return to profitability Impact of increase Decline in revenue (Increase in expens
Slide 7: Q3 FY03/2025 Overview of Each Business Segment
1. Review of Q3 (Oct-Dec) FY03/2025 Q3 FY03/2025 Overview of Each Business Segment • Q3 release of Wizardry Variants Daphne contributed. Q3 sales were ¥2.16 billion - Sales are recorded on a gross basis due to in-house distribution, leading to high revenue figures. However, this also incurs variabl
Slide 8: (Reference) Game business: In-house vs other-company distribution profit structure
1. Review of Q3 (Oct-Dec) FY03/2025 (Reference) Game business: Differences in the profit structure between in-house distribution and distribution by other companies In-house distribution results in high gross sales figures but also incurs variable costs, such as payment processing fees. In-house Dis
Slide 9: Q3 FY03/2025 Revenue from Titles in Operation
1. Review of Q3 (Oct-Dec) FY03/2025 Q3 FY03/2025 Revenue from Titles in Operation All 10 titles are in the black. Q3 saw the release of one new title and the closure of one. Profit and loss for 10 titles in operation* (Q3 FY03/2025, Oct-Dec) Increase in profitable titles due to the release of Wizar
Slide 10: Agenda
1. Review of Q3 (Oct-Dec) FY03/2025 2. Forecast for FY03/2025 3. Medium-Term Goals 4. Appendix Copyright Drecom Co., Ltd. All Rights Reserved. 10
Slide 11: Announcement of FY03/2025 Full-Year Earnings Forecast
2. Forecast for FY03/2025 Announcement of FY03/2025 Full-Year Earnings Forecast Q2: At the time of the earnings announcement, accurately estimating financials was deemed challenging. As a result, the full-year earnings forecast was withdrawn. Future KPI sustainability was uncertain, along with poten
Slide 12: Regarding FY03/2025 Full-Year Forecast
2. Forecast for FY03/2025 Regarding FY03/2025 Full-Year Forecast The contribution of new products has helped to boost sales and profits. We are back on track for growth. FY03/2025 FY03/2024 Cumulative Q1(Apr-Jun) Q2(Jul-Sep) Q3(Oct-Dec) Q4 (Jan-Mar) Full-year Full-year (Millions of yen) (Apr-Dec) A
Slide 13: Game Business: Progress on Titles Releasing in the Second Half (1)
2. Forecast for FY03/2025 Game Business: Progress on Titles Releasing in the Second Half (1) Wizardry Variants Daphne was released in Q3 FY03/2025 (15th October 2024). Wizardry Variants Daphne Game Overview • Genre: 3D dungeon RPG • Supported platforms: iOS/Android *Steam® version also planned • Fee
Slide 14: Game Business: Progress on Titles Releasing in the Second Half (2)
2. Forecast for FY03/2025 Game Business: Progress on Titles Releasing in the Second Half (2) Disney STEP is scheduled for release in Q4 of the fiscal year ending March 2025. Pre-registration will begin on January 27th at each app store. Disney STEP Game Overview • Title: Disney STEP • Genre: Real-li
Slide 15: A Three-Year Plan to Scale Up
2. Forecast for FY03/2025 A Three-Year Plan to Scale Up After restructuring, the company is poised to re-enter a virtuous cycle of business expansion. From FY03/2026, we aim to achieve both growth and profitability. FY03/2024 FY03/2025 FY03/2026 – FY03/2027 Sales growth: CAGR 20% or more Sales: ¥9.7
Slide 16: Timely Disclosure: Stock Options for Executive Officers
2. Forecast for FY03/2025 Timely Disclosure: Stock Options for Executive Officers Introduced as an incentive for the management team responsible for execution to work together with shareholders to improve corporate value over the medium to long term. Item Details Name Drecom Co., Ltd. 18th Stock Acq
Slide 17: Agenda
1. Review of Q3 (Oct-Dec) FY03/2025 2. Forecast for FY03/2025 3. Medium-Term Goals 4. Appendix Copyright Drecom Co., Ltd. All Rights Reserved. 17
Slide 18: Medium-Term Goals
3. Medium-Term Goals Medium-Term Goals Aiming to be a global leader in entertainment content, driven by IP and technology. Current Medium-Term Goals Entertainment Game (Mobile and PC consoles) Content Business IP Publication Mobile Game (Novels, comics, webtoons) Business Video Entertainment (Anim
Slide 19: Our Market: Entertainment and Content Industry
3. Medium-Term Goals Our Market: Entertainment and Content Industry With the rise of video streaming services and digital sales, the popularity of Japanese content, particularly animation and PC/console games, is gaining significant traction worldwide. The overseas export of Japanese content has rea
Slide 20: Our Strengths and Competitive Advantages
3. Medium-Term Goals Our Strengths and Competitive Advantages With the entertainment content market expanding, we will leverage our strengths as a latecomer to seize opportunities, drive sustainable growth, and enhance corporate value. Utilize Technology to Create New Experiences/Markets/Opportuni
Slide 21: Business Model of Entertainment Content Market and Objectives of Each Business
3. Medium-Term Goals Business Model of Entertainment Content Market and Objectives of Each Business As we own, develop, and monetize IPs, we will define the positioning of each area based on our businesses' unique characteristics. This will help us identify key business domains to prioritize in the
Slide 22: IP-Centered Multimedia Development: Wizardry
3. Medium-Term Goals IP-Centered Multimedia Development: Wizardry Acquiring and developing popular IP into in-house assets, enhancing value through multimedia expansion. Actively fostering cross-project collaborations, including games and Blade & Bastard. Blade & Bastard Wizardry Variants Daphne Col
Slide 23: Status of In-House IP Development: 'Drecom Media'
3. Medium-Term Goals Status of In-House IP Development: 'Drecom Media' Enhancing and monetizing IP through web novels, comics, and originals—200,000+ copies sold; two titles confirmed for animation adaptation Own IP Growing IP Monetize IP Publishing (novels, comics, webtoons) Video (animation) Novel
Slide 24: About the Video (Animation) Business
3. Medium-Term Goals About the Video (Animation) Business In addition to publishing, we have launched a comprehensive initiative in the video business to expand its global market. We are actively engaged in animation production projects to develop and monetize our own IP while also investing in prod
Slide 25: Overview of the PC and Console Game Business
3. Medium-Term Goals Overview of the PC and Console Game Business In this rapidly expanding global market, we are developing three titles as part of our strategy to create IP through small to medium-scale investments. Two of these titles have already been announced and are scheduled for release sequ
Slide 26: Entertainment x Technology Area: Web3 and Generative AI
3. Medium-Term Goals Entertainment x Technology Area: Web3 and Generative AI We are implementing initiatives to leverage technologies that align closely with entertainment content and drive business growth. Significant progress is being made in Web3, blockchain, and generative AI. Web3 - Blockchain
Slide 27: Agenda
1. Review of Q3 (Oct-Dec) FY03/2025 2. Forecast for FY03/2025 3. Medium-Term Goals 4. Appendix Copyright Drecom Co., Ltd. All Rights Reserved. 27
Slide 28: Timely Disclosure: Financing Agreement with DBJ for Profit Sharing Rights
4. Appendix Timely Disclosure: Financing Agreement with DBJ for Profit Sharing Rights To mitigate the risks of highly volatile businesses while continuing to pursue new opportunities, we accept investments on a project-by-project basis. Item Details Procurement source Development Bank of Japan Inc.
Slide 29: Game Business: Pipeline of Operational and Development Titles
4. Appendix Game Business: Pipeline of Operational and Development Titles We will make additional investments and enhance systems for operational titles to secure long-term revenue. Our strategy includes diversifying and expanding our offerings through the release of new titles. 2011 – 2023 After 2
Slide 30: Game Business: Pipeline of Operational and Development Titles
4. Appendix Game Business: Pipeline of Operational and Development Titles Business Status Definition Number of Projects Details Other company distribution: 4 titles Operation Titles in operation 10 * In-house distribution: 6 titles Development is underway with a • Disney STEP Commerciali
Slide 31: Status of In-House IP Development: Tokyo Stories
4. Appendix Status of In-House IP Development: Tokyo Stories Launched through social media, this project aims to develop IP via buy-to-own games for PC and console. It has received strong international recognition, amassing over 100,000 followers on X. Own IP Growing IP Monetize IP PC and console ga
Slide 32: Revenue Status of Titles in Operation (by release period)
4. Appendix Revenue Status of Titles in Operation (by release period) Operating Title Release Timeline and Quarterly Business Performance 2010 2011 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Q3 Oct-Dec 2024 Profit Loss Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 33: List of Operational Game Titles (As of December 2024)
4. Appendix List of Operational Game Titles (As of December 2024) Game title Distributor Service start date Chocotto Farm Drecom Co., Ltd. Jan 2011 ONE PIECE Treasure Cruise Bandai Namco Entertainment Inc May 2014 BOKU & DRAGONS studiorex Co., Ltd. *1 Feb 2015 (March 2020) Derby Stallion: Masters
Slide 34: For details on trends in consolidated performance, refer to the fact sheet
For details on trends in consolidated performance, cost and SG&A expenses, and billing revenue for the game business, please refer to the fact sheet available on our website https://drecom.co.jp/ir/factsheet_202503Q3.pdf The perspectives, strategies, and plans outlined in this document are forward-l