You may be familiar with CyGames, they are a subsidiary of CyberAgent.
CyberAgent just had their first quarter results for FY9/2019.
From it, they're already off to a rough start. They have had to revise down their operating profit for the fiscal year:
In the slide above, they talk about a new mobile game that released, they felt it was off to a good start, but by the first quarter it fell below expectations and they've had to wipe off ¥3.39B from their operating profit forecast.
This is how things look for the operating profit for the full year forecast:
Here you can see they're still going to invest 20B yen in something, that will be clarified a little later.
Here, you can see how their game business is doing. Dragalia Lost contributed to the first quarter Sales when other titles declined.
On the other hand, in their game business, the operating profit was low for the first quarter compared to previous years:
This next chart is hard to see, Dragalia Lost launched at the end of September and at its where it's at in this sales ranking is below the purple line for January on the right:
Now to the part about the CEO, credit to Muu for translating this blog entry that comes from the CEO of CyberAgent:
https://ameblo.jp/shibuya/entry-12436315278.html
Now, why would such a company put all their hopes on one mobile game? Because they spend a ridiculous amount of money on a TV service called AbemaTV.
This is AbemaTV, surprisingly they've now added an on-demand service. I found it funny because years ago they tried to convince investors that Linear Online TV is the way to go because no one else does it:
So how has AbemaTV worked out for CyberAgent? Not well.
You'll notice when AbemaTV started, where they're losing roughly ¥20B per FY on operating income because it's invested into AbemaTV.
Here's a more in-depth look into their media business:
You can see on the right how much money their media business loses vs how much they earn. The earnings mainly come from blogs, tapple (a dating app) and advertising revenue. Their losses come from investing in AbemaTV.
So as you can see, AbemaTV burning 20 billion yen per year is why the CEO of CyberAgent is scapegoating the underperformance of Dragalia Lost because he can't let the investors see how much money he's losing on a TV service that has barely given any returns.
CyberAgent just had their first quarter results for FY9/2019.
From it, they're already off to a rough start. They have had to revise down their operating profit for the fiscal year:
In the slide above, they talk about a new mobile game that released, they felt it was off to a good start, but by the first quarter it fell below expectations and they've had to wipe off ¥3.39B from their operating profit forecast.
This is how things look for the operating profit for the full year forecast:
Here you can see they're still going to invest 20B yen in something, that will be clarified a little later.
Here, you can see how their game business is doing. Dragalia Lost contributed to the first quarter Sales when other titles declined.
On the other hand, in their game business, the operating profit was low for the first quarter compared to previous years:
This next chart is hard to see, Dragalia Lost launched at the end of September and at its where it's at in this sales ranking is below the purple line for January on the right:
Now to the part about the CEO, credit to Muu for translating this blog entry that comes from the CEO of CyberAgent:
https://ameblo.jp/shibuya/entry-12436315278.html
コストを増やし過ぎていることに気がついたのは、今から半年前、2018年夏頃のことでした。
先行投資中のAbemaTVだけでなく、広告事業もゲーム事業も、さらなる成長の好機とみて、新規事業を立ち上げ、どんどん人を採用し、広告費を増やしと先行投資を膨らませていました。
少なくとも去年の春頃までは、売上がそれ以上に伸びるのでコスト増加分を吸収できていたのですが、コスト増に成長スピードが追いつけなくなってきていたのです。
ブレーキを踏むべきか迷いましたが、期待のゲーム新規大型タイトルを控えていたので、その進捗を見ることにしました。
そして9月末にゲームをリリース、好調なスタートを切ったことから、その約1ヶ月後の決算発表時に300億円の営業利益で見通しをだすことにしました。それが今から3ヶ月前です。
過去にも同様のパターンでゲームの伸びによって全体が潤っていたことから、特定のゲームタイトルに依存し過ぎてしまっていたと反省しています。
11月下旬、ゲームユーザーの増加に対し期待していたほどに課金は伸びないことに気付き、全社的にコスト増にブレーキをかけることにしました。
会社は車と同じで、クリープ現象のようにブレーキを踏んでもしばらくは動いてすぐに止まれないので、結構強めにブレーキを踏んだつもりですが、1Q(10〜12月)はだいぶ出遅れてしまいました。
2Q以降は、コスト構造の見直しの成果が現れて、巡航速度に戻ると思います。
それは上場企業の社長がブログに書くくらいだから、近い将来答え合わせできるでしょう。
It was around summer of 2018 when we realized costs and expenses were balooning.
In addition to Abema TV we boosted funding for games and advertising divisions expecting growth.
Up to last spring sales exceeded rising costs, however cost increases began catching up. I wondered if we should slow down, however we were expecting a new major game release so we held off.
In late September we released the game, and judging by its excellent start we announced a revenue target of 3billion yen. That was 3 months ago. I regret depending too much on specific game title performances, as this has succeeded in the past.
Late November, we realized that revenue was falling short of increased userbase in the game. At this point we put a stop to increased spending in the company overall. A company is like a car, you can't immediately stop after holding down the brakes. We think we hit the brakes pretty hard, but there will be some noticeable effects on 1Q (Oct - December).
Now, why would such a company put all their hopes on one mobile game? Because they spend a ridiculous amount of money on a TV service called AbemaTV.
This is AbemaTV, surprisingly they've now added an on-demand service. I found it funny because years ago they tried to convince investors that Linear Online TV is the way to go because no one else does it:
So how has AbemaTV worked out for CyberAgent? Not well.
You'll notice when AbemaTV started, where they're losing roughly ¥20B per FY on operating income because it's invested into AbemaTV.
Here's a more in-depth look into their media business:
You can see on the right how much money their media business loses vs how much they earn. The earnings mainly come from blogs, tapple (a dating app) and advertising revenue. Their losses come from investing in AbemaTV.
So as you can see, AbemaTV burning 20 billion yen per year is why the CEO of CyberAgent is scapegoating the underperformance of Dragalia Lost because he can't let the investors see how much money he's losing on a TV service that has barely given any returns.
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