Risks of concentration in top-tier titles, market maturation, and failure to meet market expectations
First written in FY2016. 13 of 27 entries say "Materialised", first in FY2018-Q1. Latest entry: FY2026.
Sega Sammy Holdings moved to the "Worse" side of this theme in 2016, 7 years before the typical company in this theme (2023).
The whole theme swung hardest in 2023: 8 of 18 companies on the "Worse" side.
5 other companies' latest entry also says "Materialised".
- FY2026MaterialisedAnnual report
「In addition to certain titles performing below plan, performance at Rovio remained sluggish because existing major titles weakened and the launch of new titles was delayed. As a result, the entertainment contents business as a whole recorded higher revenue but lower profit.」
The failure of new titles to meet plan, sluggish sales of existing flagship titles and delays in releasing new titles materialized as higher revenue but lower profit for the business. - FY2026-H1MaterialisedAnnual report
「During the interim consolidated accounting period, sales of full games in the consumer business and Rovio's performance fell below expectations, and the entertainment content business as a whole underperformed expectations.」
Full-game sales and Rovio's performance fell below expectations, demonstrating the materialization of previously identified risks related to leading titles, new-title performance and the performance of the acquired company. - FY2025MaterialisedAnnual report
「Although a loss was recorded in connection with the cancellation of development of Football Manager 25, the consumer business as a whole was able to offset the loss through strong sales of the high-margin repeat titles, downloadable content and licensing revenue described above.」
The cancellation of development of a new title resulted in a loss, demonstrating that risks related to title development and performance had materialized as an actual loss. - FY2024MaterialisedAnnual report
「Meanwhile, in the consumer business within the entertainment content business, approximately ¥19.2 billion in extraordinary losses was recorded due to structural reforms implemented in response to the deteriorating operating environment, particularly at European studios. Net income attributable to owners of the parent declined from the previous fiscal year.」
The deterioration in the European consumer market was reflected in structural reforms, approximately ¥19.2 billion in extraordinary losses and a decline in net income attributable to owners of the parent. - FY2024-Q3WorsenedAnnual report
「In the consumer business, market growth, particularly in Europe and North America, has reached a plateau due to deteriorating economic conditions caused by inflation and other factors. Game development costs also continue to rise, making it an urgent priority to respond to these changes in the operating environment.」
Risks in the consumer business became more pronounced, with growth in the European and North American markets reaching a plateau amid deteriorating economic conditions caused by inflation and other factors, while game development costs continue to rise. - FY2024-Q2WorsenedAnnual report
「In the consumer business, the operating environment, particularly in Europe, is changing rapidly due to factors including the decline following the stay-at-home demand during the COVID-19 pandemic and deteriorating economic conditions caused by inflation and other factors.」
Market risks in the consumer business became more pronounced, with the decline following stay-at-home demand and deterioration in the European operating environment due to inflation and other factors. Rising development costs overseas are also identified as a challenge. - FY2023MaterialisedAnnual report
「Meanwhile, sales of repeat titles remained weak as market conditions stabilized, with sales totaling 17.79 million units, compared with 18.43 million units in the previous fiscal year.」
While new titles performed well, sales of repeat titles declined from 18.43 million units in the previous fiscal year to 17.79 million units, reflecting the weak performance of existing titles. - FY2023-Q3MaterialisedAnnual report
「Meanwhile, repeat titles performed weakly.」
While new titles performed well, weak sales of repeat titles were recorded, indicating that some risks related to the decline and performance of existing titles have materialized. - FY2021RestatedAnnual report
「Intensifying competition in the consumer business from the emergence of high-quality titles using leading IP」
The company continues to identify intensifying competition in the consumer business from high-quality titles and titles based on leading IP as a risk. - FY2020-Q3RestatedAnnual report
「Intense competition continues in the digital games business, particularly in Japan's mobile games market.」
The company has reaffirmed its recognition that the competitive environment for mobile games in Japan remains challenging. - FY2020-Q2RestatedAnnual report
「Intense competition continues in the digital games business, particularly in Japan's mobile games market.」
The company has reaffirmed its recognition that the competitive environment in Japan's mobile games market remains challenging. - FY2020-Q1RestatedAnnual report
「The operating environment surrounding the entertainment content business remains challenging, with intense competition continuing in the digital games business, particularly as the leading titles in Japan have become entrenched.」
The company continues to recognize that leading titles have become entrenched in Japan's digital games market and that the competitive environment is challenging. - FY2019MaterialisedAnnual report
「However, legal regulations beyond the Group's control and the maturation of the market are driving demand for higher-quality content. Longer development periods, higher operating costs and impairment losses on assets associated with game titles due to failure to achieve the ratings initially expected could affect the Group's operating performance.」
The previously identified risks of competition from high-quality titles and titles based on leading IP, failure to meet ratings expectations and asset impairments materialized as weak digital games performance and impairment losses in the fiscal year ended March 2019. - FY2019-Q3RestatedAnnual report
「The operating environment surrounding the entertainment content business remains challenging. In the digital games business, titles offering high product quality and titles based on leading IP are occupying the top rankings, further intensifying competition.」
The company continues to recognize that high-quality titles and titles based on leading IP occupy the top rankings, intensifying competition in the digital games business. - FY2019-Q2RestatedAnnual report
「The operating environment surrounding the entertainment content business remains challenging. In the digital games business, titles offering high product quality and titles based on leading IP are occupying the top rankings, further intensifying competition.」
The company continues to recognize that high-quality titles and titles based on leading IP occupy the top rankings, intensifying the competitive environment. - FY2019-Q1WorsenedAnnual report
「In the digital games business, the increasing dominance of major domestic publishers and the success of titles using leading IP in addition to high product quality are making the competitive environment increasingly intense.」
The company states that the increasing dominance of major domestic publishers is intensifying competition for high-quality titles and titles based on leading IP. - FY2018MaterialisedAnnual report
「However, legal regulations beyond the Group's control and the maturation of the market are driving demand for higher-quality content. Longer development periods, higher operating costs and impairment losses on assets associated with game titles due to failure to achieve the ratings initially expected could affect the Group's operating performance.」
The number of new releases fell below expectations, and impairment losses on game-related assets were also recorded, demonstrating the materialization of risks associated with mature markets and demands for higher quality. - FY2018-Q3RestatedAnnual report
「The operating environment surrounding the entertainment content business remains challenging. In the digital games market, including games for smart devices, the slowdown in smartphone adoption in Japan and the increasing dominance of major publishers are creating demand for higher-quality content, resulting in a trend toward longer development periods and higher operating costs.」
The company continues to describe the slowdown in smartphone adoption, the increasing dominance of major publishers, and the trend toward longer development periods and higher operating costs as market conditions. - FY2018-Q2RestatedAnnual report
「The operating environment surrounding the entertainment content business remains challenging. In the digital games market, including games for smart devices, the slowdown in smartphone adoption in Japan and the increasing dominance of major publishers are creating demand for higher-quality content, resulting in a trend toward longer development periods and higher operating costs.」
The company continues to describe the slowdown in smartphone adoption, the increasing dominance of major publishers, and the trend toward longer development periods and higher operating costs as features of the digital games market environment. - FY2018-Q1MaterialisedAnnual report
「As a result, revenue was ¥50.278 billion, up 7.7% year on year, while operating profit was ¥3.717 billion, down 24.8%, as development costs and other expenses increased in connection with the release of major titles.」
The increase in development costs and other expenses associated with the release of major titles was reflected in a decline in operating profit in the entertainment content business. - FY2017-Q3RestatedAnnual report
「The operating environment surrounding the entertainment content business remains challenging. In the digital games market, including games for smart devices, the slowdown in smartphone adoption in Japan and the increasing dominance of major publishers are creating demand for higher-quality content, resulting in a trend toward longer development periods and higher operating costs.」
The company continues to identify the slowdown in smartphone adoption, the increasing dominance of major publishers, and the trend toward longer development periods and higher operating costs as features of the digital games market environment. - FY2017-Q1WorsenedAnnual report
「In the digital games market, including games for smart devices, the slowdown in smartphone adoption in Japan and the increasing dominance of leading titles are creating demand for higher-quality content, resulting in a trend toward longer development periods and higher operating costs.」
The slowdown in smartphone adoption and increasing dominance of leading titles have been identified, with the company again noting trends toward longer development periods and higher operating costs. - FY2016First statedAnnual report
「We aim to maximize earnings by concentrating management resources on the rapidly growing businesses providing content for SNS platforms and smartphones, while establishing an appropriate business structure in response to changes in the operating environment, speeding up management decision-making and responding to diversifying customer needs.」
The company identifies concentration in leading titles, longer development periods, higher development costs and failure to achieve expected ratings as risks, and during the period, some titles failed to meet ratings expectations and their asset values were reassessed.