Three-game-brand structure and integration of the secondary business

「At a meeting of the Board of Directors held on 25 May 2022, we resolved to dissolve and liquidate our consolidated subsidiary 株式会社ブルークエスト, and completed the liquidation on 15 August.」

「At a meeting of the Board of Directors held on 25 May 2022, we resolved to dissolve and liquidate our consolidated subsidiary 株式会社ブルークエスト, and liquidation procedures are currently under way. Completion of the liquidation is expected at the end of August 2022.」

「The effective withdrawal from the game content business at the end of the previous consolidated fiscal year」

「At an extraordinary general meeting of 株式会社ルイスファクトリー held on 27 July 2020, the company changed its trade name to 株式会社ミックスベース. In addition, at a board meeting held on 10 July 2020, the company resolved to scale back the game business in light of the increasing difficulty of acquiring new transfer projects in the secondary business and the poor sales of newly developed games, which had resulted in extraordinary losses, and to plan, produce, develop and operate new services mainly using MR as a new business.」

「However, as the spread of COVID-19 affected Japan's real economy, we determined that we should more rigorously select and concentrate investment areas across all of the Group's businesses to expand future earnings. Accordingly, we decided to recognize an impairment loss on ¥52 million of intangible fixed assets related to 「コスプリ！！」.」

「During the first half of the current consolidated fiscal year, we produced and released the new proprietary title 「コスプリ！！」 in cooperation with 株式会社SQ, whose representative director is Matsumoto Tsunehiko (松本恒彦). However, sales were extremely weak, and the resulting additional development costs and decline in profitability caused by the extended operating period for secondary titles led to a substantial operating loss.」

「During the cumulative first-quarter period, we focused particularly on producing new in-house titles (Note) in collaboration with 株式会社SQ, whose representative director is 松本恒彦.」

「The Group's game content business distributes and operates games through its two subsidiaries, 株式会社ブルークエスト and 株式会社ルイスファクトリー. However, the scale of ブルークエスト's business has been reduced from a profitability perspective, and nearly all revenue now comes from ルイスファクトリー.」

「During the cumulative third-quarter period, we mainly used our subsidiary 株式会社ルイスファクトリー to distribute and operate games, while also developing and advancing plans for the production of new in-house titles.」

「During the consolidated fiscal year under review, sales declined year on year because ルイスファクトリー did not acquire any new operating-transfer titles and because fees and other deductions have been netted against sales since the current consolidated fiscal year. However, the sale of existing operating titles resulted in positive operating income.」

「Our group operates its game production and distribution business through two subsidiaries, 「株式会社ブルークエスト」 and 「株式会社ルイスファクトリー」, and has focused on ルイスファクトリー's core domestic secondary operations. As our group plans to center its operations on the domestic secondary business going forward, we have scaled back the size of ブルークエスト's business after taking earnings efficiency into consideration.」

「The Group's game content business produces and distributes games through its two subsidiaries, 株式会社ブルークエスト and 株式会社ルイスファクトリー. As in the cumulative first-quarter period, we continued to advance the business mainly through the domestic secondary business, which is Lewis Factory's core business.」

「While we sought to increase revenue per title and extend the operating period by rolling out existing transferred titles across various platforms, revenue did not grow because we did not acquire any new titles for transfer, although」

「Going forward, we plan to focus on the secondary business at our subsidiary Lewis Factory and advance the business under a stable earnings model.」

「We focused particularly on the secondary business at our subsidiary ルイスファクトリー and, in addition to beginning operation of the second secondary title, “Bahamut Brave,” in May 2017,」

「Following the business acquisition dated 1 September 2016, our group’s game business develops and distributes games under three brands: “OBOKAID'EM,” “株式会社ブルークエスト” and “株式会社ルイスファクトリー.” During the cumulative second quarter of the consolidated fiscal year under review, “Yggdrasil War Chronicle: Knights of the World Tree,” which ルイスファクトリー began operating in December 2016, and its existing titles contributed to revenue, and the business became profitable on an operating profit basis.」

「Following the acquisition of a business on 1 September 2016, the Group's game business has produced and distributed games under 3 brands: "OBOKAID'EM," "株式会社ブルークエスト" and "株式会社ルイスファクトリー."」

「Our game division has developed casual games for global markets under the OBOKAID'EM brand, established in February 2015, while its subsidiary 株式会社ブルークエスト has imported overseas games and published them in Japan. We resolved to acquire a business so that our subsidiary 株式会社ルイスファクトリー, established on 5 August 2016, could develop paid games for the Japanese domestic market as the third pillar of our game business.」