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Marvelous FY3/2024 Q3 Earnings Release. Forecast down. Loop8, Fashion Dreamer (500k units) and Frederica/Silent Hope underperformed, execs pay cut

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ggx2ac

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(They publish Dark Souls)
Executives pay cut: https://corp.marv.jp/img/240131_yakuin.pdf

Presentation slides: https://corp.marv.jp/library/img/kessansetsumei3q2024.pdf

Earnings release: https://corp.marv.jp/library/img/tanshin3q2024.pdf

Forecast revision: https://corp.marv.jp/img/240131_gyoseki.pdf

I don't normally make threads for Marvelous because their earnings releases are in Japanese like the links above. Only some of the stuff above gets translated into English at a later time.

Net Sales cumulative for Q3: ¥21,760M (+18.2% YoY)
Operating Income cumulative for Q3: ¥1,390M (-56.2% YoY)
Net Income cumulative for Q3: ¥1,174M (-51.3% YoY)

From the presentation slides for the Digital Contents segment (DeepL translated):
In addition to the sluggish sales of "LOOP8" launched in 1Q, sales of "Frederica" and "Fashion Dreamer" were lower than expected, Segment income was negative because development costs were not fully recovered.
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Digital Contents segment:
Net Sales cumulative for Q3: ¥12,137M (+18.23% YoY)
Operating income cumulative for Q3: -¥300M (-118.35% YoY)

They revised down their forecast due to the underperformance of Loop8, Frederica/Silent Hope and Fashion Dreamer:
Net Sales Consolidated Forecast: ¥28,500M (+5.56% revised up)
Operating Income Consolidated Forecast: ¥2,500M (-42.86% revised down)
Net Sales Consolidated Forecast: ¥1,650M (-34.52 revised down)

From the forecast revision announcement, we find out the sales for Fashion Dreamer and that it underperformed (DeepL translated):
Sales of "Fashion Dreamer" were close to 500,000 units worldwide, including digital sales, but were significantly lower than originally planned.
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From the pay cut announcement, the CEO and President are taking a 30% pay cut monthly from February to April 2024. The Full-time directors are taking a 12% pay cut monthly from February to April 2024.

Edit: As found by @Hartmann in the media create thread, there were presentation slides with explanatory notes in the IR library: https://corp.marv.jp/library/img/kessangaiyo3q2024.pdf

At page 11 of those slides, it mentions Fashion Dreamer had 60% of sales Overseas.
 
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Loop8 and Frederica being underperformers(especially the former) is not a surprise but I'm surprised expectations for Fashion Dreamer were so high that 500k in 2-3 months is significantly lower than expected.
 
Oregano said:
Loop8 and Frederica being underperformers(especially the former) is not a surprise but I'm surprised expectations for Fashion Dreamer were so high that 500k in 2-3 months is significantly lower than expected.
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The were expecting higher sales than Style Savvy given Switch popularity but at the end maybe it was the opposite.
 
Oregano said:
Even if the game was as well received as the Style Savvy games Marvelous has nowhere near the publishing power Nintendo has, so that would always be an uphill battle.
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In France Marketing was Big.

I remenber this game having TV spots in November on big TV channels.

The game was basicly push like a Nintendo game.
 
Disappointing results for Marvelous but shoutout to their execs for taking responsability and cutting their pay.

As mentioned in the MC thread, Fashion Dreamer had a good start but WoM hurt its legs. 500k isn't bad per say, but it could have been more.
 
Sales history under Nintendo:

Style Savvy (DS): 2.98 million
Style Savvy: Trendsetters (3DS): 1.44 million
Style Savvy: Fashion Forward (3DS): 1.00 million

Seems like there has been a persistent downturn for the franchise, but Marvelous was confident (overconfident?) in its ability to rebound under a new branding.
 
Aquamarine said:
Sales history under Nintendo:

Style Savvy (DS): 2.98 million
Style Savvy: Trendsetters (3DS): 1.44 million
Style Savvy: Fashion Forward (3DS): 1.00 million

Seems like there has been a persistent downturn for the franchise, but Marvelous was confident (overconfident?) in its ability to rebound under a new branding.
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Part of the issue in terms of critical reception is the fact that the game doesn't actually play like the Style Savvy games, nor does it have a lot of features(most annoyingly a lot of the QoL features).

I'd definitely put it down to overconfidence when you consider that during the Switch gen Marvelous has had only 3 confirmed million sellers with Friends of Mineral Town, Pioneers of Olive Town and Sakuna: Of Rice and Ruin. The only other milestone we have for a Marvelous game was Rune Factory 5 selling 500k which was considered a success. So if you take those as their 4 best sellers* Fashion Dreamer is one of their best sellers.

*Daemon x Machina is definitely up there but we never got any milestones, probably partially due to Nintendo publishing outside Japan.
 
Real shame what happened with Fashion Dreamer, because there was a fair deal of anticipation prior to launch. But ultimately, synSophia failed to deliver. They took the "series" in the right direction with the influencer focus and all, but getting rid of the actual meat from past games wasn't really wise.
 
Yeah, Fashion Dreamer needed the shop/inventory management/selling to give it a loop. I wouldn't be surprised if that hurt it.

Marvelous's upcoming slate:
  • Project Magia - A game with art by the Fairy Tail guy
  • Project Life is RPG - A large-scale RPG that pays respect to the classics
  • New Story of Seasons game - Supposedly going to have better graphics
  • New multiplayer Story of Seasons game - Very little info about this game
  • Rune Factory: Project Dragon - Eastern-influenced RF game with dragons and more stylish visuals
  • Rune Factory 6 - We only have a title screen to go on, but described as the "west" to Project Dragon's "east"
  • Daemon X Machina: Titanic Scion - No info to go on yet
So there is stuff coming out, but we'll see what their expectations are for the SoS and RF games, and Daemon X Machina as well.
 
Half a million for Fashion Dreamer was "significantly lower than forecasted"???? What the hell were these guys smoking holy shit.
 
500k in few months seems very good
They probably hoped for more due to other weak output imho

Next output seem to have more potential imho
 
Ishaan said:
Yeah, Fashion Dreamer needed the shop/inventory management/selling to give it a loop. I wouldn't be surprised if that hurt it.

Marvelous's upcoming slate:
  • Project Magia - A game with art by the Fairy Tail guy
  • Project Life is RPG - A large-scale RPG that pays respect to the classics
  • New Story of Seasons game - Supposedly going to have better graphics
  • New multiplayer Story of Seasons game - Very little info about this game
  • Rune Factory: Project Dragon - Eastern-influenced RF game with dragons and more stylish visuals
  • Rune Factory 6 - We only have a title screen to go on, but described as the "west" to Project Dragon's "east"
  • Daemon X Machina: Titanic Scion - No info to go on yet
So there is stuff coming out, but we'll see what their expectations are for the SoS and RF games, and Daemon X Machina as well.
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They have a very good lineup and optimal timing with new hardware coming soln. They just need to not fuck it up. Hopefully Fashion Dreamer is a wakeup call for any unrealistic expectations
 
Marvelous was a bit of a mixed mess this gen. Unlike some others companies (coucoughLevel-5coughcough), they didn't miss the boat altogether, but they did make some regrettable mistakes (like rushing that new Story of Seasons game out of the gate, RF5 releasing in a sad state in Japan and needing a dozen updates to fix) that prevented them from taking full advantage of Switch potential.

More than unrealistic expectations (definitely an issue), it'd be great if they took the time to deliver great, polished experiences from the getgo. Oh, and please no more chibi nonsense, this isn't the 3DS anymore 😓
 
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Lite_Agent said:
More than unrealistic expectations (definitely an issue), it'd be great if they took the time to deliver great, polished experiences from the getgo. Oh, and please no more chibi nonsense, this isn't the 3DS anymore 😓
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I'm not quite sure what you mean by "chibi nonsense"? The only franchise that I can think off the top of my head that retained something like that would be Story of Seasons, and that still wouldn't be a "business as usual" thing, as they actually changed (simplified) the art style from the 3DS games. And even then, that franchise has a more pressing issue with the drop in quality as compared to the 3DS entries for its sales (which ties into your first point, which I agree with).
 
Refyref said:
I'm not quite sure what you mean by "chibi nonsense"? The only franchise that I can think off the top of my head that retained something like that would be Story of Seasons, and that still wouldn't be a "business as usual" thing, as they actually changed (simplified) the art style from the 3DS games. And even then, that franchise has a more pressing issue with the drop in quality as compared to the 3DS entries for its sales (which ties into your first point, which I agree with).
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Was referring to Silent Hope, which had sick character art...

98914377ffba14d706290eb86065c256d428b6d458a6cb6fbcbf4be1d1fbaf4d


... turned into this in the actual game.

d3ff8abb601c9243c3746223059b0714b9f62b23eb2cc5f4759ae79ac7c081fb


A real shame. Pretty sure that didn't do the game any favours.
 
Lite_Agent said:
Was referring to Silent Hope, which had sick character art...

98914377ffba14d706290eb86065c256d428b6d458a6cb6fbcbf4be1d1fbaf4d


turned into this in the actual game.

d3ff8abb601c9243c3746223059b0714b9f62b23eb2cc5f4759ae79ac7c081fb


A real shame. Pretty sure that didn't do the game any favours.
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Oh man, that I completely forgot about this game right after it came out is probably very telling. You're right, that game's style wasn't very appealing.
 
Loop8 and Silent Hope always appeared to me (and this may be completely off the mark as I haven't played them) as the kind of titles that FuRyu would've published.

It seems that Marvelous didn't have the same very low sales expectations that FuRyu would've had for their titles. Looking back, the Silent Hope sales seem... I guess alright? While the Loop8 sales are undeniably dismal (and I'm sure the awful reviews hurt it WW as well):

11./00. [NSW] Silent Hope <RPG> (Marvelous) {2023.09.28} (¥4.980) - 10.880 / NEW <60-80%>
09./00. [NSW] Loop8: Summer of Gods <RPG> (Marvelous) {2023.06.01} (¥5.980) - 5.796 / NEW <40-60%>
16./00. [PS4] Loop8: Summer of Gods <RPG> (Marvelous) {2023.06.01} (¥5.980) - 2.775 / NEW <40-60%>

Fashion Dreamer is a strange one because it very much seems to me that 500k for a release like that is somewhat of a shockingly good success? Perhaps because they didn't have anything else of note during the period or were expecting it to be a bit leggier than it was.
 
As someone who played Silent Hope, the game is fine but it is a very... average game. It's like Dragalia Lost but without any of the depth of gameplay with mediocre bosses and limited overall movepool for how much you have to repeat encounters/levels to progress.

It has an interesting gameloop all in all but its not something that was going to be a big breakout hit, the game feels too narrowly defined for that.
 
Kresnik said:
Fashion Dreamer is a strange one because it very much seems to me that 500k for a release like that is somewhat of a shockingly good success? Perhaps because they didn't have anything else of note during the period or were expecting it to be a bit leggier than it was.
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Maybe launch sales were fine for them, but they didn't expect post-launch sales to drop like they did?
 
I really hope they don't drop synSophia because all Fashion Dreamer needs is the atelier aspect of the SS games, it's a very good base to build off of.

Looking at the upcoming slate of releases though... doesn't give me much hope they'll learn from their recent stumbles and still try to push unpolished or unfinished games through. Two SoS and two RF in the pipeline is way more than I would have thought they can handle.
 
500k is way more than I expected for Fashion Dreamer. Why did they think it was going to sell way more than that with how low quality it is? Maybe the executives sometimes should have a better idea of the quality of the products they're making forecasts for.
 
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Fashion Dreamer problem is, it is very barebones. It should have more content there. And also their post launch content support is also not really good.

Frederica is not bad game considering how much i as dragalia lost player enjoy the game but it feels like Dragalia lite and the story simply is not that fun in the end.
 
Astral_lion02 said:
In France Marketing was Big.

I remenber this game having TV spots in November on big TV channels.

The game was basicly push like a Nintendo game.
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That makes sense given Nintendo gave it a marketing and distribution deal in Europe and America.
 
Fashion Dreamer released on November 2 and sold nearly 500k by the end of December 2023 (approx. 2 months). I truly wonder what their expectations were for this title.
 
Alex4 said:
Fashion Dreamer released on November 2 and sold nearly 500k by the end of December 2023 (approx. 2 months). I truly wonder what their expectations were for this title.
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Maybe they expect 1m? I think thats too much considering the game does not receive stellar review scores. Just mediocre with not so good WoM as well.
 
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