• Akira Toriyama passed away

    Let's all commemorate together his legendary work and his impact here

NJ Holdings (they own tri-Ace y'know) FY6/23 presented by Sōta Fujii. Net Sales 10,131, Operating Profit -239, Game Business +43 (million yen)

KR_EP

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FEEL LIKE A PILOT. BE A LANDING HERO.
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NJ Holdings Inc.
Tokyo Stock Exchange Standard Market Code number: 9421.T
Supplemental Material For FY2023 Full Year Financial Results
August 14, 2023​
Investor Relations (IR) (ENG)
Financial Year (FY)
July 2022 - June 2023​

Media Create Sales: CY 2022 (2022 Jan 03 - 2023 Jan 01)
100./000. [PS4] Star Ocean: The Divine Force <RPG> (Square Enix) {2022.10.27} (¥7.980) - 37.413 / NEW (25.594 <77,94%>)
120./000. [PS5] Star Ocean: The Divine Force <RPG> (Square Enix) {2022.10.27} (¥7.980) - 26.746 / NEW (18.774 <78,23%>)
476./362. [NSW] Kishi: Fujii Souta no Shogi Training <TBL> (AnelaGamesStudio) {2020.03.05} (¥4.500) - 3.505 / 24.502 (-37%) (1.815 <35,90%>)
Star Ocean: The Divine Force - First Shipments [PS4] 32,838 & [PS5] 23,998
Media Create Sales: CY 2022 Used (2022 Jan 03 - 2023 Jan 01)
359./353. [PS4] Star Ocean: Integrity and Faithlessness <RPG> (Square Enix) {2016.03.31} (¥7.980) - 3.161 / 110.984 (-26%) (254.793 <77,17%>) New Game Retails Sales = 144,000
144,000 - 143,768 = 232 new retail copies sold in CY2022.
PS Store Sales: Oct 2022 (Oct 01 - Oct 31)
02./00. [PS5] Star Ocean: The Divine Force (ε) _PS Store Download Version_ |DL| # <RPG> (Square Enix) {2022.10.27} (¥7.980)
04./00. [PS4] Star Ocean: The Divine Force (ε) _PS Store Download Version_ |DL| # <RPG> (Square Enix) {2022.10.27} (¥7.980)


PS Store Sales: Nov 2022 (Nov 01 - Nov 30)
09./02. [PS5] Star Ocean: The Divine Force (ε) _PS Store Download Version_ |DL| # <RPG> (Square Enix) {2022.10.27} (¥7.980)
09./04. [PS4] Star Ocean: The Divine Force (ε) _PS Store Download Version_ |DL| # <RPG> (Square Enix) {2022.10.27} (¥7.980)
PS Store Sales: CY 2022 (2022 Jan 1 - 2022 Dec 31)
17./00. [PS5] Star Ocean: The Divine Force (ε) _PS Store Download Version_ |DL| # <RPG> (Square Enix) {2022.10.27} (¥7.980)

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Sōta Fujii here, thought I'd take a break from hustlin' & bustlin' in the cut throat world of Professional Shogi Shodown to give you the FY lowdown.

1. Consolidated Financial Results
(1)Results Summary for the full fiscal year ending June 30, 2023
Operating loss narrowed. Gross profit margin is also on an improving trend.
(Millions of Yen)​
Net Sales
Operating Income
Ordinary Income
FY6/22 (July 1, 2021 - June 30, 2022)​
10,652​
-869​
-865​
FY6/23 (July 1, 2022 - June 30, 2023)​
10,131
-239
-260
Total Change (FY22 - FY23)
-521
629
-605
'Another loss after initially forecasting operating profit of 160 million yen, slightly better than its last minute 2nd revision but still looking at 397 million yen off its plan for a quick recovery.'
Revision of the forecast for the full fiscal year ending June 30, 2023 (July 1, 2022 - June 30, 2023)
(Millions of Yen)​
Net Sales
Operating Income
Ordinary Income
Initial Forecast (A)​
10,710​
160​
150​
1st Revised Forecast (B)​
10,470​
15​
5​
Change (B - A)​
-240​
-145​
-145​
2nd Revised Forecast (C)​
10,160
-250
-270
Change (C - B)​
-310​
-265​
-275​
Total Change (C - A)
-550
-410
-420
A = Financial Results for the Fiscal Year Ending June 30, 2022 (August 10, 2022) page 16*
B = Notice of Revisions of Earnings Forecasts (February 10, 2023)*
C = Notice of Revision of Earnings Forecasts (June 26, 2023)
**English language version here on page 19 of the Supplemental Material For FY2023 First Half Financial Results, published February 10, 2023
(2)Results by Segment
Game business returned to profitability. Mobile business fell slightly short of maintaining profitability due to a decline in sales in 4Q.
(Millions of Yen)​
Net Sales FY6/22
Net Sales FY6/23
Change
Operating Profit FY6/22
Operating Profit FY6/23
Change
Game​
8,124
7,995
-128
-609
43
653
Mobile​
2,467​
2,070​
-397​
46​
-14​
-61​
Other*1​
68​
71​
2​
31​
37​
5​
Inter-segment Eliminations & Corporate Expenses*2​
-8​
-6​
1​
-223​
-225​
-1​
Goodwill Amortisation​
--​
--​
--​
-113​
-80​
33
※1 The Other segment is a business segment not included in the reportable segments.
※2 Corporate expenses are general and administrative expenses that do not belong to any reportable segment.
2. Game Business
(1)Overview
In terms of sales, in the operation support field, orders related to newly released titles and localization support for overseas markets were favorable, but revenues declined due to the gradual downward trend in operation sales.
In the development field, there was no huge increase in cost of sales as in the previous fiscal year. The decline in profit margin due to the increase in total estimated costs and the decrease in profit due to the gradual decline in operation sales were offset by strong orders received in the operation support field. Although we were unable to increase segment profit due to the cancellation of several development projects in the fourth quarter, we were able to return to profitability.
(4)Quarterly Operating Profit
Segment income remained in the black in the fourth quarter, albeit marginally. Despite the cancellation of a development project, strong orders in the operation support field contributed to the profit.
'Needed to make bigger gains to offset losses from store closures...buy Star Ocean 6! Note the different terms used on page 9 & 12, former mentions several while the latter only a single title.'
Number of projects currently under development ※1
Package type ※2 ※3 (Main platforms: consoles, PCs):
4 (+1 from May 12, 2023)

Smartphone type ※2 ※4 (Main platforms: mobile phone, PC):
0 (-2 from May 12, 2023)

employees ※5
836 (+28 from Mar. 31, 2023) (+39 from Jun. 30, 2022)
※1 as of August 14, 2023. It does not indicate the number of titles that will be completed within this fiscal year.
※2 Multi-platform title counts as one. Small titles are not counted.
※3 Download sales and additional content are also included in the console type.
※4 including the free-to-play type.
※5 as of June 30, 2023 (including some fixed-term contract workers.)
Number of Employees: consolidated 996 (as of June 30, 2023. It includes 74 average temporary employees)
'The company doesn't give detailed breakdowns of group companies however I've confirmed the first two console/PC titles plus the cancelled project(s) were contract work. Question is what are the final two, is Undergrounded one of them & where's tri-Ace? NJ Holdings weren't on the Bitsummit show floor but were on hand to meet publishers....or will it self-publish?'
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[NSW/PS4/PS5/XBS/Steam] Infinity Strash: Dragon Quest The Adventure of Dai <RPG> (Game Studio/Kai Graphics/Square Enix) {2023.09.28}
[
PS5/XBS/Steam
] Synduality: Echo of Ada <ACT> (Game Studio/Bandai Namco Entertainment) {2023.xx.xx}
Console/PC title ???
Console/PC title ???
[TBC]
UNDERGROUNDED <ADV> (Game Studio) {xxxx.xx.xx}
1. Forecasts for FY2024
(1)Consolidated Full-Year Forecasts
Millions of Yen​
Net Sales
Operating Profit
Ordinary Profit
FY6/23 (July 1, 2022 - June 30, 2023)​
10,131​
-239​
-260​
FY6/24 (July 1, 2023 - June 30, 2024)​
10,370
200
180
Total Change (FY23 - FY24)
+238
+439
+440
(2)Projections for each business segment
Game
In the game business, we expect to post an operating loss in the first quarter due to the gap term between completed development projects and newly started projects, etc. However, since there are new development projects for which we have already foreseen the timing of orders, the decline in personnel utilization ratio due to the cancellation of development projects that occurred in the current fiscal year (ending June 2023) will improve and we expect to break even from the second quarter and return to profitability for the full year.
Mobile
Since the enforcement of the revised Telecommunications Business law in 2019, the profitability of the non-carrier store division has been declining, particularly in the Tokyo metropolitan area, where the company has long focused on price appeal, and the business environment is unlikely to bottom out in the future. We have closed four stores as of June 30, 2023, which we have determined will be difficult to turn profitable. As a result, we expect to recover to the same level of profits as in the previous fiscal year (fiscal year ended June 30, 2022).
'Well there you have it, this year things will be different...promise, not like last year, cause we've got 4 (count 'em!) console/PC games in development & we've cut the mobile store fat too. We're now a lean mean game makin' machine. Now if you'll excuse me
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I've got a tournament to win before I take a look over the Japanese only documents for more detail ahead of the Annual Meeting plus Q&A session in a fortnight (August 28, 2023)...should be fun!' Thanks to @Chris1964 for the MC Sales Data.
 
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The whole comment by the management bodies there feels truly like copium. Like boi. Such big operating income drop and still forecasing another operating profit drop as well.

and the game 2 known title game they are hoping to help there. I don't see them doing any good for them as well.

Whats even worse is their mobile front development has also been not much help for the company success there. So not much positive to even talk about.
 
...What?
I think you read it wrong.

Yeah lol.

I read the year wrongly there. So NJ is expecting recovery on both operating and ordinary profit.

Still doubtful though considering the slate they are having there. Outside Dai( which i feel is going to underperform as well) there does not seems to have a single big breakout title. And the lack of mobile success is even worse.
 
@AruanaRiva It would help if Square Enix confirmed a sequel or expansion/season pass that covered the second half of the Dai source material. I believe Operation Support refers to contracts to assist on projects like the recent Special Thanks credit on Pikmin 4 but an English language glossary to explain the various terms used would be helpful. Here's the parts to look out for this FY:
(5) Notes to Consolidated Financial Statements
(Notes on premise of a going concern)
In the previous fiscal year (ended June 30, 2022), the Group recorded an operating loss, ordinary loss, and net loss attributable to owners of the parent company. As a result, the Company has recorded operating loss and ordinary loss for two consecutive fiscal years. As a result, the Company has violated the financial covenants of the syndicated loan agreement. In addition, due to these losses, net assets have fallen below a certain percentage of the past base point, and the company is in violation of other financial covenants. As a result of the violation of these financial covenants, the Company may lose the benefit of time for 1,181 million yen of the balance of loans outstanding at the end of the current fiscal year, and its cash reserves are less than the amount of these loans. These circumstances have created events or conditions that may raise significant doubts about the premise of a going concern.

In order to resolve or improve this situation, the Group is taking the following measures to recover and stabilize its business performance and improve its financial base.

1. Improvement of Business Income and Expenses
1. Stabilize profitability of the game business
We will change our sales structure and work to receive orders for projects in a timely manner. In the game development business, once the Group receives an order for a new project, it has been able to secure a certain degree of stability in orders until the game is completed. However, recently, as development projects have become larger in scale and deliberations on the continuation of development have become stricter, more and more clients are deciding to discontinue development in the middle of the project. However, it is not easy to receive orders for new projects in a timely manner after the discontinuation of a project has been found, and it is necessary to proceed with sales activities while taking into consideration the risk of the development being discontinued.

However, in this changing environment, in order to promote the acquisition of new projects while simultaneously developing new projects, the majority of the project managers' resources are being allocated to development, and we will establish a new structure to secure personnel who can focus on sales. In addition, we will establish a system to secure personnel who can focus on sales and marketing. At the same time, in order to increase the effectiveness of this change in the sales structure, the top management will more proactively lead the new sales structure to enable a variety of sales strategies.

In addition, with respect to the acquisition of new projects, the Company has begun to increase the frequency and accuracy of its information on the probability of receiving orders and the timing of receiving orders, and to strengthen its system for evaluating the impact on business performance of projects in development that are pending the start of the next phase of development until the decision is made to start the next phase of development.

This will enhance the predictability of possible future loss risks associated with waiting staff, etc., for the start of projects. Before losses increase due to prolonged waiting periods, etc., we will make decisions to change the priority of orders and allocate staff to other projects, and implement recovery measures. Through these measures, we will work to stabilize the profitability of the game business.

2 Reinforcement of Risk Management System in Game Business The Group has established an Investment Management Committee in response to the large losses incurred in the game business in the previous fiscal year.

The Investment Management Committee is a body that examines, from the perspective of individual and group-wide risk management, whether there are any particular problems with the decision to start, suspend, or continue a business or other activity that may involve risk, mainly in the form of management decisions. In particular, the Company is working to strengthen its checks on order terms and conditions and the order receipt system in order to prevent a significant deterioration in earnings by strengthening monitoring of risk conditions. In this way, the Company will strengthen its risk management system to prevent a deterioration in the earnings of the game business.

Source: Consolidated Financial Results for the Year Ended June 30, 2023, page 12 (via DeepL Auto-translation)
Emphasis mine, won't pretend to understand all (or any) of it, the first paragraph suggests decline in net assets means there's a pressing need to either renegotiate or renew 'syndicated loan agreement' and/or increase cash reserves on hand to pay off debt in time. Again not sure what that means in practise so won't draw any conclusions there, other sections are worth discussing. Making sure they have enough long term contracted work & planning ahead to avoid cancelled projects leaving people waiting for more work, moving staff around make sense.
2. Improvement of Financial Base
We are working to secure working capital by returning guarantee deposits and reducing inventories in connection with withdrawal from unprofitable stores in the mobile business, transferring shares in affiliated companies that are not our main business and have little synergy effect on our stockholdings, and selling assets that do not affect our core business.

At the meeting held in March 2023 with each bank, we requested renewal of the agreement to maintain the loan balance, and we are continuing to renew the agreement on a short-term basis. However, we will discuss with all financial institutions to obtain their agreement to renew the contract on a one-year basis at the earliest possible time.

We will work closely with our financial institutions to maintain good relationships with them so that they can provide us with the funds we will need in the future.

In order to fundamentally improve our financial position and restore the stability of our financial base, we will consider procuring funds from sources other than financial institutions as appropriate.

However, these measures are still in the process of implementation, and there is a possibility that the planned improvements may not be realized depending on future changes in the business environment, and the contractual repayment terms of some of the borrowing agreements with financial institutions are shorter than one year, so at this point, we recognize that there are significant uncertainties regarding the premise of a going concern. The Company recognizes that significant uncertainties regarding the premise of a going concern exist at this point in time.

The consolidated financial statements are prepared on the assumption that the Company is a going concern, and the effect of the material uncertainty regarding the Company's ability to continue as a going concern is not reflected in the consolidated financial statements.

Source: Consolidated Financial Results for the Year Ended June 30, 2023, page 13 (via DeepL Auto-translation)
Emphasis mine once more. Knew about the meeting back in March 2023 but wasn't able to get a read-out of the details. Seems they will look to secure more short term loans (which have gone up overall while long term are down), curious as to on what terms. International publishers, crowdfunding & Steam Early Access for self-published titles in-between contracted work seems like a good interim measure (Undergrounded) but really it goes back to the issue of being too reliant on contract work from publishers like Square Enix rather than in-house IP. Even for long running series like Star Ocean & Valkyrie Profile closely associated with tri-Ace, because the publisher owns the IP, it can hire other studios like TOSE, Gemdrops & Soleil to develop remakes & spin offs.

Investor & Analysts webcast August 28, plus Q&A session, perhaps more detail on all of the above will emerge ahead of the Annual Shareholders meeting, late September (edit: typos & clarity).
 
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Bandai Namco Tokyo Game Show 2023
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“You’re by yourself, but never alone”
September 24th, 2023
  • 12:30 - 13:15 – SYNDUALITY Project Tokyo Game Show 2023 Special StageSYNDUALITY is a large-scale science-fiction project from Bandai Namco Group. This stage event will feature the latest information on the anime SYNDUALITY Noir and in-development game SYNDUALITY Echo of Ada, as well as hobby-related news. Featuring Yui Ishikawa (Aida voice actor), Takeo Ootsuka (Kanata voice actor), Aoi Koga (Noir voice actor), Yosuke Futami (Bandai Namco Entertainment producer), and Hiroshi Matsuda (Bandai Namco Entertainment producer).
The new science fiction project "SYNDUALITY" by the BANDAI NAMCO Group.
The game "SYNDUALITY Echo of Ada" will be exhibited for the first time in the world!
This is a PvPvE shooter game where you drive a mecha "Cradle Coffin" and compete for items on the ground with your own partner Ai "Maygus".
No two experiences are the same, and you and "Megas" must adapt to an ever-changing environment and survive in a harsh world.
Experience the bond between you and MEGUS that deepens the more you repeat the game. This is a unique and exciting journey for you and Megas.
As if on cue, no sooner than I had posted a company wide update in the Output Strategy thread, Bandai Namco confirmed that Synduality: Echo of Ada will appear on stage at TGS2023 & be playable on the show floor. So glad. So jelly. Steam page entry updated from 2023 to Coming Soon. Right decision to let Super Game Studio cook! Not to be outdone, NJ Holdings has made the Q&A available in English. Plus the head of IR was kind enough to provide an update on a couple other queries, so without Dai Delay, let us do battle in Samurai Shogi Showdown!
Dumb.Q) Can you clarify the number & timeframe of cancelled titles as page 9 of the Financial Report mentions several projects, while page 12 says a single title. Was it one project cancelled in the last quarter & several over the course of the financial year? How far along were these in development & were they all smartphone titles?
Sorry, this was overlooked in the translation check. The uploaded file has been corrected.
As ever, turns out the simplest answer is the correct one & led to a page saying 1 project, rather than multiple. It's now projects, plural on both pages. No dice on the rest of my query. 😥
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August 28, 2023 NJ Holdings Inc.
Financial Results Briefing for the Fiscal Year Ending June 30, 2023 Summary of Key Questions and Answers
Q.1) To what extent do you have a reasonable prospect of returning to profitability?
In FY6/2023, the company revised its earnings forecast in the second quarter, resulting in a small operating profit, and with no buffer to maintain profitability, the company was unable to recover from the cancellation of several development projects in the fourth quarter. This is due to the delay in detecting loss risk amidst the rapidly changing business environment. In the current progress period, the company is strengthening its grasp of the outlook. If a risk of loss is anticipated, such as prolonged deliberations or the cancellation of a project, the company will make an early decision and take recovery measures, such as increasing the number of prospective projects or picking up other project opportunities within the group, even if the profit margin declines slightly.
Q.2) What is different in the situation means a 200 million yen profit forecast for the current Financial Year 2024 will be met without one or more downward revisions?
First, we have strengthened our system for understanding the situation so that we can take action as soon as possible. We feel that this has already improved our grasp of the outlook by about one month. Next is a change in the sales structure. Until now, each company had solely worked on sales and personnel assignment, and the person in charge of a project was also responsible for new prospective projects. From this fiscal year, a dedicated sales manager has been assigned to the group so that he can monitor the status of projects and utilization of the entire group and conduct sales activities. Although a certain amount of unavoidable losses can occur due to uncontrollable cancellations and delays in order timing, we believe that the scope of losses can be reduced by working together as a group to pick up opportunities that could not be handled by individual companies.
Q.3) Does the company plan to introduce a new business strategy to become less reliant on publishers & contract work that can be cancelled for reasons beyond the control of NJ Holdings?
As for expansion into peripheral businesses, in the game business, we use a variety of tools in our operations and have created tools for our own use. We will work on productization and provision to other industries of those items that we believe would be appreciated. This will provide a stable revenue stream that is not affected by the cancellation or termination of projects.
(note) The forecasts in this document are based on information currently available to the Company and certain assumptions that the Company believes are reasonable. Actual results may differ from forecasts.

Source: Summary of Q&A (English language translations are made available here)
Can you guess the queries (yes, plural!) that I submitted for the Q&A? Follow the bad grammar, it's a dead giveaway. Good to see that steps are being taken after what happened last Financial Year to ensure any setbacks can be mitigated by moving quickly to secure new work. Leading query to end but CEO & Smooth Criminal King General was having none of it.
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Dorky.Q) Are you able to provide an update & commentary for the retail sales of Kishi: Fujii Souta no Shogi Training for Nintendo Switch as of June 30, 2023 (Media Create Sales figures provided below) plus can you comment on its digital eShop sales figures (digital/physical sales ratio or specific numbers) since launch?
We expect sales in CY 2023 to be about the same number of units as in CY 2022.
The digital/physical sales ratio is roughly 25%.
For reference here are the domestic retail sales so far, while not to be taken literally, will check next year when the Media Create Sales: CY 2023 are published to see if how it compares.
Media Create Sales: CY 2020 (2019 Dec 30 - 2021 Jan 03)
212./000. [NSW] Kishi: Fujii Souta no Shogi Training <TBL> (Game Studio) {2020.03.05} (¥4.500) - 15.445 / NEW (1.815 <35,90%>)
First Shipment Estimate: 5,056
Media Create Sales: CY 2021 (2021 Jan 04 - 2022 Jan 02)
362./212. [NSW] Kishi: Fuji Shouta no Shogi Training <TBL> (Game Studio) {2020.03.05} (¥4.500) - 5.553 / 20.998 (-64%) (1.815 <35,90%>)
Media Create Sales: CY 2022 (2022 Jan 03 - 2023 Jan 01)
476./362. [NSW] Kishi: Fujii Souta no Shogi Training <TBL> (Game Studio) {2020.03.05} (¥4.500) - 3.505 / 24.502 (-37%) (1.815 <35,90%>)
Digital ratio of roughly 25%, however lets keep it simple & say it was exactly 25% - well that's impossible (lukenooooo.gif) unless somebody bought 1/4 of a digital copy. Shall round up to 6,126 eShop downloads because this is Game Studio x Sōta Fuji we're talking about people - you always gotta look sunny-side up! Which means that -- give me a moment cause maths is hard -- as of January 1, 2023 it'd be 24,502 + 6,126 = 30,628. Again, not a precise figure but gives a sense of how it's doing, I'd say its a more than respectable figure for a modern Shogi title on a single platform wouldn't you? Definitely worth developing a follow up for the next console from Nintendo, that is if Big Time Boi, Sōta Fujii is still game for a new Game Studio game. (edit: typos)
 
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