Higher Production Costs and Provisions for Losses on Orders Due to High-Quality Video Production
First written in FY2018-Q1. 17 of 34 entries say "Worsened", first in FY2018-Q3. Latest entry: 2026-10-15.
IG Port moved to the "Worse" side of this theme in 2024, 3 years after the typical company in this theme (2021).
The whole theme swung hardest in 2025: 2 of 7 companies on the "Worse" side.
4 other companies' latest entry also says "Mitigated".
- 2026-10-15MitigatedEarnings
「一部の作品については、制作期間の長期化による人件費の増加や外注費等が高騰しており、受注損失引当金を計上しております。」
受注損失引当金は前連結会計年度末の769,747千円から669,405千円へ減少し、映像制作事業も営業利益へ転じた。一方、制作期間の長期化・人件費増加・外注費高騰と引当金計上は継続している。 - FY2026WorsenedAnnual report
「Provision for losses on orders ¥511.792 million ¥769.747 million」
The provision for losses on orders increased from ¥511.792 million at the end of the previous fiscal year to ¥769.747 million, reflecting greater provisions for production cost, delivery schedule and profitability risks. - FY2026-H1MitigatedAnnual report
「Certain projects are incurring provisions for losses on orders due to longer production periods and surging outsourcing costs, including personnel expenses and CG production costs.」
Although longer production periods, higher personnel and outsourcing costs, and the recognition of provisions for losses on orders continued, the provision decreased by ¥257.242 million from the end of the previous fiscal year, and the video production business's operating loss narrowed from the same period of the previous year. - FY2025WorsenedAnnual report
「In the animation production business, rising prices have driven up labor costs, CG production costs and outsourcing costs, among others, and the lengthening of production periods resulted in provisions for loss on orders being recorded for some works.」
Higher costs associated with high-quality video production and the ongoing risk of losses on orders continued, and the provision for losses on orders increased from ¥379.456 million in the previous fiscal year to ¥511.792 million. - FY2025-H1WorsenedAnnual report
「Some projects are loss-making because production periods have lengthened and personnel costs and outsourcing costs, including CG production costs, have risen, resulting in the recognition of provisions for losses on orders. Accordingly, net sales in this business were ¥3,318 million, up 18.5% year on year, and operating loss was ¥699 million, compared with an operating loss of ¥122 million in the same period of the previous year.」
Longer production periods and surging outsourcing costs, including personnel expenses and CG production costs, continued, and a provision for losses on orders was recognized. The operating loss widened from the same period of the previous year, with the impact of cost and profitability risks reflected in results. - FY2024-Q3WorsenedAnnual report
「Some projects are loss-making because production periods have lengthened and CG production and outsourcing costs have risen, resulting in the recognition of provisions for losses on orders. Accordingly, net sales in this business were ¥4,564 million, down 2.3% year on year, and operating loss was ¥420 million, compared with operating profit of ¥155 million in the same period of the previous year.」
Longer production periods and higher production costs continued, increasing the provision for losses on orders from ¥155.750 million at the end of the previous fiscal year to ¥416.841 million. The video production business also swung from an operating profit in the same period of the previous year to an operating loss of ¥419.709 million, with the impact of cost and profitability risks increasing. - FY2024-Q2WorsenedAnnual report
「Some projects are loss-making because production periods have lengthened and CG production and outsourcing costs have risen, resulting in the recognition of provisions for losses on orders. Accordingly, revenue from this business, recognized based on progress, was ¥2,800 million, down 11.5% year on year, because cost of sales recognized was lower than budget, and operating loss was ¥122 million, compared with operating profit of ¥54 million in the same period of the previous year.」
A provision for losses on orders was recognized due to longer production periods and surging CG production and outsourcing costs, and operating results also swung from a profit in the same period of the previous year to a loss of ¥122.433 million. The provision increased from ¥155.750 million at the end of the previous fiscal year to ¥318.800 million. - FY2024-Q1WorsenedAnnual report
「Some projects are loss-making because production periods have lengthened and CG production and outsourcing costs have risen, resulting in the recognition of provisions for losses on orders. Accordingly, net sales in this business were ¥1,346 million, down 12.8% year on year, and operating loss was ¥10 million, compared with operating profit of ¥88 million in the same period of the previous year.」
Longer production periods and surging CG production and outsourcing costs continued, and a provision for losses on orders was recognized. The video production business swung from an operating profit in the same period of the previous year to an operating loss, with the impact of cost and profitability risks reflected in results. - FY2023MitigatedAnnual report
「In the animation production business, rising prices have driven up labor costs, CG production costs and outsourcing costs, among others, and the lengthening of production periods resulted in provisions for loss on orders being recorded for some works.」
The situation in which provisions for losses on orders are recognized for certain projects due to higher prices, longer production periods and rising outsourcing costs continues. Meanwhile, the provision balance decreased from ¥323.481 million at the end of the previous fiscal year to ¥155.750 million. - FY2023-Q3MitigatedAnnual report
「The main factors were a ¥67.041 million increase in the provision for bonuses, partly offset by decreases of ¥404.280 million in accrued income taxes, ¥176.922 million in the provision for losses on orders and ¥125.339 million in accounts payable.」
The provision for losses on orders decreased by ¥176.922 million from the end of the previous consolidated fiscal year to ¥146.558 million. The disclosure does not state that the risk of production losses has been eliminated, but the provision balance has declined. - FY2023-Q2MitigatedAnnual report
「Certain projects are incurring production losses due to longer production periods and higher payments to external creators.」
Production losses caused by longer production periods and higher payments to external creators remain. Meanwhile, the provision for losses on orders decreased from ¥323.481 million at the end of the previous consolidated fiscal year to ¥234.939 million, and the video production business returned to operating profitability. - FY2023-Q1MitigatedAnnual report
「The main factors were a ¥67.215 million increase in the provision for bonuses, partly offset by decreases of ¥438.926 million in accrued income taxes, ¥101.035 million in the provision for losses on orders and ¥100.100 million in accounts payable.」
Although longer production periods, higher production costs and production losses on certain projects continue, the provision for losses on orders decreased by ¥101.035 million from the end of the previous consolidated fiscal year to ¥222.445 million. - FY2022-Q3WorsenedAnnual report
「Global inflation is continuing, and if outsourcing costs, personnel expenses, public utility charges and other costs rise further, costs for projects already ordered are expected to exceed their production budgets, potentially affecting the operating results and other aspects of the Group.」
The disclosure newly details the risk of higher production costs, stating that global inflation could cause increases in outsourcing costs, personnel expenses, public utility charges and other costs, resulting in production costs exceeding the budgets for projects already ordered. The provision for losses on orders also increased to ¥170.489 million from ¥148.588 million in the previous disclosure. - FY2022-Q2MitigatedAnnual report
「Certain projects are incurring production losses due to longer production periods and the emphasis on quality, but operating profit is trending upward as a result of improved accuracy in preparing production budgets and negotiations over order amounts that reflect the budgets.」
Although production losses caused by longer production periods and the emphasis on quality remain, the company continues to manage production budgets and negotiate order amounts. The provision for losses on orders decreased from ¥179.703 million at the end of the previous fiscal year to ¥148.588 million. - FY2022-Q1MitigatedAnnual report
「Certain projects are incurring production losses because priority is being given to quality, but operating profit is trending upward as a result of production budget management and negotiations over order amounts that reflect the budgets.」
Although production losses continue on quality-focused projects, measures involving production budget management and negotiations over order amounts have progressed, and the video production business returned to operating profitability. The provision for losses on orders also decreased from ¥179.703 million at the end of the previous fiscal year to ¥153.474 million. - FY2021WorsenedAnnual report
「For new video production orders, the company is negotiating order amounts based on the preparation of highly reliable production budgets that reflect current conditions. Although improvements were also seen in some delivered projects, certain quality-focused projects incurred production losses and provisions for losses on orders due to longer production periods and surging outsourcing costs.」
While the company continues to prepare budgets and negotiate order amounts for new orders, quality-focused projects incurred production losses and provisions for losses on orders due to longer production periods and surging outsourcing costs. The provision for losses on orders stood at ¥179.703 million. - FY2021-Q3WorsenedAnnual report
「The video production business continues to face difficult conditions due to surging CG production and outsourcing costs and longer production periods. Improvements were seen in some of the projects delivered, but provisions for losses on orders were recognized for certain projects.」
Amid continuing difficult conditions caused by higher production costs and longer production periods, a provision for losses on orders was recognized for certain projects. The provision stood at ¥194.014 million, up from ¥107.634 million in the previous disclosure. - FY2021-Q2MitigatedAnnual report
「The video production business continues to face difficult conditions due to surging CG production and outsourcing costs and longer production periods, but improvements were seen in some of the projects delivered.」
Although difficult conditions caused by rising production costs and longer production periods continue, improvements were seen in some delivered projects, and the provision for losses on orders decreased by ¥56.358 million from the end of the previous consolidated fiscal year to ¥107.634 million. - FY2021-Q1Updated the provision balance for losses on ordersAnnual report
「Provision for losses on orders ¥167.818 million」
The provision for losses on orders stood at ¥167.818 million, an increase of ¥3.825 million from ¥163.993 million at the end of the previous consolidated fiscal year. The video production business posted an operating loss in the first quarter, which the main text attributes primarily to an interim period between projects. - FY2020-Q3MitigatedAnnual report
「The video production business continues to face difficult conditions due to surging CG production and outsourcing costs and longer production periods, but improvements were seen in some of the projects delivered. The main factors were increases of ¥998.751 million in advances received and ¥125.050 million in accounts payable, partly offset by a ¥103.469 million decrease in the provision for losses on orders.」
Although difficult conditions caused by rising production costs and longer production periods continue, improvements were seen in some delivered projects, and the provision for losses on orders decreased by ¥103.469 million from the end of the previous consolidated fiscal year. - FY2020-Q2MitigatedAnnual report
「The video production business continues to face difficult conditions due to surging CG production and outsourcing costs and longer production periods, but improvements were seen in some of the projects delivered.」
Although difficult conditions caused by rising production costs and longer production periods continue, improvements were seen in some delivered projects, and the provision for losses on orders decreased by ¥145.764 million from the end of the previous consolidated fiscal year. - FY2020-Q1MitigatedAnnual report
「The video production business continues to face difficult conditions due to surging CG production and outsourcing costs and longer production periods, but improvements were seen in some of the projects delivered. The main factors were a ¥171.196 million increase in accounts payable and a ¥115.887 million decrease in the provision for losses on orders.」
Although difficult conditions caused by higher production costs and longer production periods continue, improvements were seen in some delivered projects, and the provision for losses on orders decreased by ¥115.887 million from the end of the previous fiscal year. - FY2019MitigatedAnnual report
「For new video production orders, the company has begun negotiating order amounts based on the preparation of highly reliable production budgets that reflect current conditions. For video production projects carried over from the previous fiscal year, CG production and outsourcing costs remain high and production periods continue to lengthen, worsening profitability. Provisions for losses on orders have also been recognized for certain projects, and difficult conditions continue. As a result, revenue from this business was ¥5,925.935 million, up 28.9% year on year, and the operating loss was ¥538.566 million, compared with an operating loss of ¥686.368 million in the previous fiscal year.」
The company began preparing budgets and negotiating order amounts for new orders, and the full-year operating loss narrowed from the previous fiscal year. The provision for losses on orders also decreased from ¥348.340 million at the end of the previous fiscal year to ¥204.515 million, but difficult conditions caused by higher costs and longer production periods for existing projects continue. - FY2019-Q3WorsenedAnnual report
「For newly won video production projects, the company is preparing video production budgets with a high degree of certainty that reflect current conditions and negotiating order amounts. However, video production projects carried over from the previous consolidated fiscal year remain difficult due to continued increases in CG production fees and outsourcing costs and longer production periods. As a result, revenue for this business was ¥4,691.978 million, up 30.1% year on year, and the operating loss was ¥531.000 million, compared with an operating loss of ¥399.470 million in the same period of the previous year.」
The company continues to prepare budgets and negotiate order amounts for new orders, but higher production costs and longer production periods for existing projects persisted, causing the video production business's operating loss to widen from the same period of the previous year. Meanwhile, the provision for losses on orders decreased from ¥348.340 million at the end of the previous consolidated fiscal year to ¥173.784 million. - FY2019-Q2WorsenedAnnual report
「For newly won video production projects, the company began negotiating order amounts after preparing video production budgets with a high degree of certainty that reflected current conditions. However, video production projects carried over from the previous consolidated fiscal year remain difficult due to continued increases in CG production fees and outsourcing costs and longer production periods. As a result, revenue for this business was ¥2,653.174 million, down 1.2% year on year, and the operating loss was ¥261.651 million, compared with an operating loss of ¥246.137 million in the same period of the previous year.」
Although the company began budgeting and negotiating order amounts for new projects, higher production costs and longer production periods for existing projects continued, causing the video production business's operating loss to widen from the same period of the previous year. The provision for losses on orders also increased from ¥348.340 million at the end of the previous consolidated fiscal year to ¥362.677 million. - FY2019-Q1Budgeting and order-price negotiations initiated for new ordersAnnual report
「For newly commissioned video productions, we began negotiating the contract price after preparing highly accurate video production budgets that reflect current conditions. However, video productions that have continued from the previous consolidated fiscal year remain difficult because of continued increases in CG production and outsourcing costs and longer production periods.」
For new orders, the company began improving the accuracy of production budgets and negotiating order amounts, while existing video production projects continued to face difficult conditions due to surging CG production and outsourcing costs and longer production periods. - FY2018WorsenedAnnual report
「Outsourcing costs, including CG production costs and fees for retaining highly skilled creators, surged, while longer production periods increased production costs. In addition, provisions for future losses were recognized for certain projects whose estimated costs currently exceed the order amounts, resulting in an operating loss of ¥686.368 million, compared with an operating loss of ¥100.157 million in the previous fiscal year.」
Higher outsourcing costs and longer production periods continued to increase costs, causing the video production business's operating loss to widen from ¥100.157 million to ¥686.368 million. The provision for losses on orders also increased to ¥348.340 million. - FY2018-Q3WorsenedAnnual report
「Production costs have increased and difficult conditions continue because production periods have become longer and we have prioritized quality to satisfy viewers.」
Production periods have continued to lengthen and production costs have continued to rise due to the emphasis on quality, causing the video production segment loss to widen to ¥399.470 million. The provision for losses on orders also increased from ¥111.870 million at the end of the previous consolidated fiscal year to ¥337.519 million. - FY2018-Q2MitigatedAnnual report
「Although negotiations have increased production fees and improved the provision for losses on contracts for certain quality-focused works, difficult conditions continue.」
The disclosure states that negotiations led to an improvement in the provision for losses on orders, indicating progress in addressing costs and future losses associated with high-quality video production. However, the video production business remains in a difficult situation. - FY2018-Q1First statedAnnual report
「As high-quality video involving complex stories, action scenes and 3DCG compositing is required, production costs have increased because we have prioritized securing creators and maintaining quality. We therefore recognized provisions for losses on orders expected to arise in the future for certain works.」
Production costs have increased in response to demand for high-quality video, and expected future losses on certain projects have been recognized as a provision for losses on orders. The provision stood at ¥313.208 million at the end of the current quarter, an increase of ¥201.338 million from the end of the previous consolidated fiscal year. The disclosure states that expected future losses were provided for; it does not state that the losses themselves have been fully realized.