Business Impact of the Spread of COVID-19

「In addition to these most significant risks identified by the Group, various other risks exist that could materially affect the Group’s financial position, operating results and cash flows, including software product quality control, infringement of third-party intellectual property, compliance with new legal regulations, management of personal information, disputes and litigation, ensuring system continuity and security measures, and the impact of natural disasters and accidents.」

「During the interim consolidated accounting period, there were no new business or other risks, nor any material changes to the business or other risks described in the annual securities report for the previous fiscal year.」

「During the first nine months of the fiscal year, there were no new business risks and no material changes to the business risks described in the previous fiscal year's securities report.」

「During the six-month period ended the second quarter of the current consolidated fiscal year, there were no new business risks or material changes to the business risks described in the previous fiscal year's Annual Securities Report.」

「During the first quarter of the current consolidated fiscal year, there were no newly arising business or other risks, and no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「During the six-month period ended the second quarter of the current consolidated fiscal year, there were no new business risks or material changes to the business risks described in the previous fiscal year's Annual Securities Report.」

「During the first quarter of the current consolidated fiscal year, there were no newly arising business or other risks, and no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「If COVID-19 spreads again, professional wrestling events, music live events and other events may be postponed or cancelled, consumption may be affected by the closure of retail outlets, and content production and the production and sales schedules for merchandise may be affected.」

「During the first nine months of the fiscal year, infections again spread due to new variants of COVID-19. Raw material and transportation prices soared amid disruptions to production and logistics in Japan and overseas, while economic uncertainty arising from the situation between Russia and Ukraine also left the outlook uncertain.」

「During the first six months of the fiscal year, prices rose in Japan due to soaring prices for various raw materials in addition to the prolonged impact of COVID-19. Although the period also saw a relatively smaller scale of infections as vaccination became more widespread, concerns remained about renewed growth in infections due to new variants, leaving the outlook uncertain.」

「Due to the impact of COVID-19, in-person events such as music live events were cancelled, postponed, held on a smaller scale or conducted without audiences throughout the fiscal year. As a result, profitability declined in live events and stage productions.」

「As a result, revenue was ¥6,854.469 million, down 1.8% year on year, while segment profit was ¥36.946 million, down 95.6% year on year.」

「During the first six months of the fiscal year, Japan’s economy regained some momentum as economic activity resumed under the “with COVID-19” environment. However, the reissuance in January 2021 of a state of emergency covering 11 prefectures and metropolitan areas due to the third wave of COVID-19 infections in Japan again restricted economic activity, particularly in food service and events.」

「The music segment remained firm in music software, with RAISE A SUILEN 1st Album “ERA,” among others, reaching No. 1 on the Oricon Daily Album Ranking. For live events and stage productions, we resumed in-person events in earnest, including the music live event “BanG Dream! 8th☆LIVE Summer Outdoor 3DAYS,” held from 21 to 23 August, the stage production “Assault Lily The Fateful Gift,” held from 3 to 13 September, and a five-day consecutive music live event at Tokyo Garden Theater from 7 to 11 October. These events drove more active development of each IP and significantly increased revenue, but restrictions on attendance prevented the segment from securing a profit.」

「Due to the impact of COVID-19, most live events from March through June were cancelled or forced to switch to no-audience formats. Although live events with audiences resumed from July onward, with attendance limited to approximately one-third to one-half of normal levels, revenue and earnings deteriorated sharply.」

「Revenue from live events declined because events scheduled from March onward were cancelled due to the impact of COVID-19. As a result, revenue was ¥6,982.527 million, up 10.9% year on year, while segment profit was ¥829.974 million, down 24.7% year on year.」

「We will continue to closely monitor the impact on our business of the spread of COVID-19, which originated in Wuhan, China, and became apparent from January 2020.」