Decline in earnings in the development promotion and support business due to rework at a subsidiary
First written in FY2020-Q3. 5 of 7 entries say "Worsened", first in FY2020. Latest entry: FY2025-H1.
Silicon Studio Corp. moved to the "Worse" side of this theme in 2020, 3 years before the typical company in this theme (2023).
The whole theme swung hardest in 2019: 9 of 41 companies on the "Worse" side.
24 other companies' latest entry also says "Mitigated".
- FY2025-H1MitigatedAnnual report
「Following the settlement of a dispute concerning in-game asset production for smartphone game software undertaken by the Company's former consolidated subsidiary イグニス・イメージワークス株式会社, which was absorbed by the Company effective 1 December 2024, the Company recognized the settlement proceeds as extraordinary income.」
A settlement was reached concerning the game asset production project undertaken by the former subsidiary, and ¥25 million in settlement proceeds received was recognized. The Company has made progress in addressing the previously disclosed issues involving the unprofitable project and difficulty recovering costs. - FY2021WorsenedAnnual report
「After the counterparty notified the Company of contract termination, the Company recognized a ¥75 million provision for losses on orders during the second quarter of the consolidated fiscal year, taking into account recoverability and other factors. As a result, the entire ¥166 million manufacturing cost related to phase 2 of this project has been provided for.」
The subsidiary's rework and unprofitable project resulted in notice of contract termination and provisioning for the full ¥166 million phase 2 manufacturing cost. - FY2021-Q3WorsenedAnnual report
「In the second phase of a game asset development project undertaken by our subsidiary as a subcontractor, we completed the development work and delivered the project at the end of March. As the counterparty subsequently notified us of the termination of the contract, we recognized ¥75 million in provision expense for contract losses during the second-quarter consolidated accounting period, taking into account the recoverability of the amount. As a result, the full ¥166 million manufacturing cost attributable to the second phase of this project has been recognized as a provision.」
For the subsidiary's unprofitable project, the Company received notice of contract termination after delivery and recognized an additional ¥75 million provision for losses on orders. The entire ¥166 million manufacturing cost of phase 2 has been provided for, increasing the loss burden from the project. - FY2021-Q2WorsenedAnnual report
「At the second phase of a game asset development project for smartphones undertaken by the Company's subsidiary as a secondary subcontractor, development work was completed and delivered at the end of March. After the counterparty subsequently notified the subsidiary of contract termination, the Company recognized an additional ¥75 million provision for losses on orders during the current second quarter accounting period, taking into account recoverability and other factors.」
After work on the subsidiary's project was completed and delivered, the counterparty notified the subsidiary of contract termination, resulting in an additional ¥75 million provision for losses on orders. The balance of the provision for losses on orders increased from ¥91 million to ¥257 million. - FY2021-Q1WorsenedAnnual report
「In the second phase of a game asset development project undertaken by our subsidiary as a subcontractor, we understand that, during the course of the project, the counterparty ordered the production of deliverables outside the scope of the contract. Although we have sought payment of the additional costs for this additional work, the counterparty has shown no indication of entering into negotiations. Taking into account the recoverability of the amount, we recognized ¥91 million in provision expense for contract losses.」
The subsidiary's unprofitable projects carried over from the previous fiscal year became more pronounced through additional production outside the contractual scope, difficulties recovering costs, and a ¥91 million provision for losses on orders. - FY2020WorsenedAnnual report
「Profit declined due to the above revenue-decrease factors, as well as the recognition by a subsidiary of ¥65 million in provision expense for contract losses arising from an unprofitable project.」
The subsidiary's rework risk materialized on an annual basis as unprofitable projects and a ¥65 million provision for losses on orders. - FY2020-Q3MaterialisedAnnual report
「In terms of profit, in addition to the above-mentioned factors behind the decline in revenue, earnings declined at a subsidiary due to rework and other factors.」
Rework and other issues at a subsidiary actually emerged as factors behind the decline in earnings in the development promotion and support business.