GameWith Presentation Material for New Investors

Transcript

1. Presentation Material for New Investors GameWith.Inc Standard Market,Tokyo Stock Exchange Securities Code 6552 Update date：2024/1/10
2. INDEX 05 04 03 02 01 Medium-Term Business Strategy Forecast for fiscal year ending May 2024 Financial Summary Services About the GameWith 06 Appendix 05.2 05.1 eSports/Entertainment Media 05.2 New Business (NFTs, Network Business, etc.)
3. 01 About the GameWith
4. 3 “Create a more enjoyable gaming experience” We are passionate about gaming, have a connection with games, and are proud to work in the game industry. We at GameWith endeavor to “create a more enjoyable gaming experience.” About the GameWith / Mission “Create a more enjoyable gaming experience”
5. 4 Media eSports/ Entertainment New Business For both users who play games and makers who develop games, GameWith provides experiences and values that no one else can, and will become the infrastructure for the enjoyment of everyone involved in games. We will expand beyond the media business into all business areas to make games more entertaining. About the GameWith / Vision “Become the world’s game infrastructure”
6. 5 About the GameWith / History of GameWith 2013 2023 2017 2018 2019 2020 2021 2022 • Established in a condominium room • Game media "GameWith" released • Launched new game reviews • Started video streaming business through YouTube • Listed on Tokyo Stock Exchange Mothers 2015 • Entered eSports business • Changed to the First Section of the Tokyo Stock Exchange • Business transfer of AtWiki • NFT game EGGRYPTO released • Acquired DetonatioN Inc. as a subsidiary • Changed market classification to TSE Standard • “GameWith Hikari" Optical network business launched Establishment 10th anniversary of establishment
7. 6 About the GameWith / GameWith Celebrates its 10th Anniversary! * This special shareholder benefit program is being held only this once to commemorate the 10th anniversary of the Company's founding. Details of shareholder benefit program QUO Card worth 3,000 yen Eligible shareholders Number of shares owned (As of the reference date) 500 shares or more Shareholders who are listed or recorded in the Company's shareholder registry as holding at least 500 shares (5 units) of the Company's stock as of May 31, 2024 will be eligible. Timing of benefits Shipping is expected during August 2024. We celebrated the 10th anniversary of our founding in 2023. We were able to reach this milestone thanks to support from our shareholders and all other related parties. Therefore, in order to express our gratitude to our shareholders for their continued support, we have decided to implement a special shareholder benefit program to commemorate our 10th anniversary.
8. 7 About the GameWith / Our Approach to Capital Investment and Shareholder Return Policy 1,467 3,387 3,003 1,083 Cash and deposits Other Assets Liabilities Net assets Balance sheet for the second quarter of the fiscal year ending May 2024 Capital adequacy ratio: 75.8% Growth investment Shareholder return Aiming to maximize corporate value over the medium to long term, we placed the highest priority on aggressive growth investment in eSports and New Businesses to create the second and third profit pillars after the Media Business. Our basic policy We recognize shareholder returns as a key management issue, and have recently decided to implement a shareholder benefit program and a share buyback. We will continue to explore the best approaches while considering balance. Key management issue and recognition • Stable business condition with high capital adequacy ratio and liquidity • Our investment policy fundamentally places the highest priority on growth investments for business expansion, while also placing importance on shareholder returns. We will continue to explore the best approaches while considering balance.
9. 8 About the GameWith / Company Outline Company Name GameWith, Inc. Address Sumitomo Fudosan Azabu-juban Bldg. 4F, 1-4-1 Mita, Minato-ku, Tokyo, 108-0073, Japan Representative and President Takuya Imaizumi Date of Foundation June 2013 Number of employees 179employees（Average number of temporary employees:82/as of May 31, 2022） Capital 553 million yen (as of May 31, 2023) Group Company AtWiki, Inc. DetonatioN, Inc. GameWith Contents Studio, Inc. GameWith NFT, Inc. GameWith ARTERIA, Inc. Company Outline Member Organization Japan esports Union (JeSU)
10. 9 About the GameWith / Top message Thank you very much for the continuous business with us. GameWith was started in 2013 in an apartment room. By employing top gamers and providing high-quality articles to coincide with game events and updates, GameWith has succeeded in winning user support and has grown into the operator of one of the largest sites for game-playing tips in Japan. Currently, we will expand beyond the realm of media into new fields such as NFT game and Network Businesses and eSports businesses while continuing to provide game-playing tips as the core business. "Get absorbed in games, be connected through games, and focus on games as a business." With this approach, we aim to create a more enjoyable gaming experience. We hope that we can count on your continued understanding and support as we pursue these initiatives. GameWith, Inc. Representative and President Takuya Imaizumi
11. 02 Services
12. 11 Services / Three segments Media eSports/Entertainment New Business Planning and management of Japan's largest game information media including “GameWith” Provision of information on game guides and introductions Management of one of Japan's leading professional eSports teams, creator management for live video game distributors, etc. Developing various new businesses related to games to realize our corporate philosophy Recently focused on NFTs and Network business Sales composition ratio 69.5% Sales composition ratio 24.8% Sales composition ratio 5.7% Ad network advertising revenue, tie-up advertising revenue, etc. Sponsor revenue, tie-ups/events, tournament prize money/support funding, fan business, etc. NFT Games: In-game purchases Network business: Monthly fees, etc. *Sales composition ratios are based on figures as of May 31, 2023.
13. 12 Users Provision of Advertising Space Advertising Rates eSports/Entertainment Provision of Articles Service Offerings (Fan clubs, merchandise sales, etc.) YouTube Video Streaming Advertising Revenue Advertisement Delivery Video Views Charge Viewing of Articles New Business (NFT, network business, etc.) Service Offerings (NFT games, network service, etc.) Charge Advertising Sponsors Creators eSports Teams Management Charge Service Offerings (Tie-ups, event production, etc.) Game Companies Sponsors Tournament Organizers Earnings Distribution Sponsors/ Prize Money Business collaboration/ earnings distribution, etc. Affiliated Companies Media Clients Services / GameWith's Business Model
14. 02-1 Media
15. 14 Media / Operating one of the largest game media sites in Japan GameWith is a service that provides information and functions necessary for better enjoying games. Operating "GameWith," one of the largest game media sites in Japan
16. 15 Media / Operating one of the largest game media sites in Japan 24th in Japan Game media No.1 in Japan Total number of visits to domestic websites 1st in Japan: Search site G 2nd in Japan: Portal site Y 3rd in Japan: Official Website D * Source: SimilarWeb Total number of visits to websites in Japan (1 year from December 2022 to November 2023) Gourmet site T Cooking recipe site C Price comparison site K IT News site I 30 th 24th 29 th 41 st 42 nd
17. 16 Media Media Strengths Products Multiple Advertising Sponsors Ad Auction Server Advertising Sponsors • Operation of the largest game media in Japan by PV count • In-house ad monetization team to achieve stable and high ad unit prices • In-house game cheat site management • Paid game cheat site management • Takeover ads at the top of the game cheat site • Creation of game review articles • Twitter advertising products, etc. • Reach gamers through the largest gaming media in Japan • Reliable solution sales specializing in gaming Network advertising Tie-up advertising A model in which multiple advertising sponsors bid for and obtain advertising spaces A model in which advertising spaces are obtained through direct contracting with advertising sponsors Strengths Products • A model that generates network advertising revenue by generating traffic through the operation of in-house game cheat sites for hit titles, while at the same time generating tie-up advertising revenue by leveraging media value through the provision of a variety of commercial products for corporations. Media / Media Business Model
18. 17 Media / Media Business Model Management of organizations specializing in content creation Utilization of game-playing workers Implement the optimal organizational structure for writers, improve business efficiency and article quality Propose a progressive work style that allows people to turn playing games into work as a side job remotely from anywhere in the country, and hire top players Establishment of a system that can provide higher quality articles more quickly Training/ Education Manuals/ Tools Specialization Rating System • Establish a system that enables rapid provision of higher quality articles by operating an organization specializing in content creation and utilizing game-playing workers, etc.
19. 02-2 eSports/Entertainment
20. 19 eSports/Entertainment / Services Other Business DetonatioN FocusMe eSports player management Fan club management Official merchandise sale Video distribution etc. GGGstudio Creator management Video Streaming etc. GameWithCup etc. Internal and external event planning and management https://e-sports.gamewith.co.jp/ http://team-detonation.net/ https://ggg-studio.com/ https://www.gamewith-arteria.com/ Creator Management eSports Team Management Event planning and management Live-Streaming Studio Business
21. 20 19年5月期 20年5月期 21年5月期 22年5月期 23年5月期 4,831 6,118 6,789 7,842 11,614 12,947 15,018 17,968 2018 2019 2020 2021 2022 2023 2024 2025 eSports/Entertainment / About the eSports • The eSports market is expanding in Japan. • Sales of GameWith’s eSports business are steadily increasing and look set to grow further. Sales of GameWith’s eSports business eSports market in Japan* Growing fast ※Figures after 2022 are projections *According to “Japan eSports White Paper 2022" eSports market data, p46-47 Year ended May 2021 Year ended May 2022 Year ended May 2020 Year ended May 2019 Year ended May 2023 (Unit: Millions of yen)
22. 21 eSports/Entertainment / Business Model Business model Fixed Remuneration Strengthening the Team Distribution/Video Production Support Event Planning etc. Affiliations and Player Activities etc. Earnings Distribution Prize Money Appearance Players/ Streamers Tournament Improving the brand value of teams Invest in players and streamers to increase their value, support promotion, and monetize through consumer services. Clients Promotion Support Advertising Expenses, etc. Sponsors Tournament Prize Money Tie-up Examples Event Planning/Management Features Realize various monetization points by leveraging one of the strongest and most well-known e-Sports teams in Japan Operate one of the best eSports teams in Japan
23. 22 eSports/Entertainment / The history of eSports and the journey of DetonatioN • Kicked off a professional eSports league (LJL) for LoL in Japan. 2009 • The term eSports appeared in the 2000s. • League of Legends (LoL) released in in North America • DetonatioN started their activities as an eSports team at an early stage in 2012. • In 2015, DetonatioN introduced Japan's first dedicated full-time professional gaming system. • DetonatioN joined the GameWith Group in 2021, and GameWith became the first listed company in Japan to report a business segment related to eSports*. • Experience as members of the Japanese national team in League of Legends and VALORANT, which are leading eSports titles, competition experience at World Championships, and global recognition 2011 2012 • Held the first official national tournament, “The 1st eSports JAPAN CUP.” • Establishment of DetonatioN • Started activities as an eSports team 2018 • The year is referred to as the “first year of eSports” in Japan. • Establishment of Japan esports Union (JeSU) 2021 2022 • Joined GameWith Group • Advanced from the group stage and reached the Top 16 at the World Championships in the LoL Division for the first time as a Japanese team • Conclusion of business alliance agreements with Crazy Raccoon • Won sixth consecutive LJL championships in the LoL division • Entered into a strategic partnership with Riot Games, Inc. • VALORANT division competed in the Asian League • eSports became a medal event for the first time at the Asian Games. • The Japanese government announced enhanced support for eSports with an eye on adoption for the Olympics. 2015 • Introduced Japan's first dedicated full-time professional gaming system. 2023 • Japan made its first-ever appearance in the best 20 at the World Championships in the LoL division. 2014 • Won the LJL Grand Final to become the first champion of the event *Based on our research
24. 23 eSports/Entertainment / Significant Achievements of DetonatioN FocusMe (DFM) • Boasts top-class skills in Japan for two titles that represent globally popular eSports • The highest potential for growth in the global market among Japanese e-sports teams The world's most played multiplayer online battle arena (MOBA) game in teams of 5 vs. 5 ✓ Chosen as eSports Game of the Year*1 for 2020 and 2021. ✓ The maximum number of simultaneous viewers for the 2023 World Championships exceeded 6.4 million worldwide, making it the most watched eSports event to date*2 ✓ Also selected as an official medal event for the Asian Games Highly-competitive tactical shooting game with 5 vs 5 battles ✓ Chosen as “ESPORTS GAME OF THE YEAR” for 2022 and 2023*1 ✓ Sales of in-game merchandise during the 2023 World Championships exceeded 40 million USD (approximately 5.8 billion yen) Half of the sales is distributed to the teams participating in the league*3. ✓ Total number of visitors to the 2023 World Championships, the first to be held in Japan, exceeded 37,000*4. Won six consecutive Japan league championships (as of December 2023) Advanced from the group stage and reached the Top 16 at the 2021 World Championships for the first time as a Japanese team Selected to join a league with some of the world's top teams and competed in the Asia-Pacific region Only two teams from Japan were selected and competed based out of Korea. Game titles Overvie w DFM Results ©2024 Riot Games, Inc. Used With Permission. *1 https://esportsawards.com/previous-winners/esports-awards-2023/ *2 From the article “Led by Faker, T1 Triumphs at LoL Worlds 2023: South Korean President Extends Congratulations as Event Sets New eSports Peak Viewership Record Amidst Celebratory Frenzy” https://roundup-gamers.jp/article/2023/11/20/1927.html *3 “VALORANT Champions 2023 Skin Revenue Surpasses 5.8 Billion Yen, with Each Team Receiving a Distribution of Approximately 180 Million Yen” https://gamewith.jp/valorant/article/show/414410 *4 “Generation Z Goes Wild for VALORANT World Championship: The Rise of Fandom Culture in eSports” https://xtrend.nikkei.com/atcl/contents/watch/00013/02280/
25. 24 eSports/Entertainment / Entered into a partnership with Riot Games, Inc. in the VALORANT division • In the VALORANT division, we entered into a partnership with the developer Riot Games, Inc. Only 2 teams from Japan and 30 teams from around the world were selected through a strict screening process. • In addition to competing in a league with the world's top teams, participants also receive financial support which is a great value from a monetization standpoint. ✓ The goal is to grow the eSports scene in a long-term and stable manner. ✓ Right to participate in a league of the world's most powerful teams ✓ Weekly broadcasts of the hotly contested matches in multiple languages to fans around the world ✓ Yearly financial support from Riot Games ✓ Provision of unique and exclusive in-game content/product collaboration opportunities ✓ Branded content can now be offered to 15 million monthly active VALORANT players worldwide ✓ Significantly increased sponsorship value as a team Entered into a partnership with Riot Games, Inc. in the VALORANT division Details and benefits VALORANT International League Participating teams ©2024 Riot Games, Inc. Used With Permission. *Reference: “Riot Games Announces New Plans for VALORANT eSports” https://prtimes.jp/main/html/rd/p/000000381.000024470.html “Riot Games Announces 10 Teams for 2023 VCT PACIFIC LEAGUE! ZETA DIVISION and DetonatioN Gaming to Participate” https://prtimes.jp/main/html/rd/p/000000452.000024470.html
26. 25 eSports/Entertainment / Creator Management Channel development Assist in shooting/editing Collaboration Strengthen the community with fans Administrative support Communication with game companies Creator Management Supporting creators’ activities Organizational support in areas that are difficult for creators to handle alone Model for revenue sharing with creators Over 7 million channel subscribers in total* Execute numerous tie-up projects and events Tie-up Examples Promotion using ASUS gaming laptops Event Planning/Management Events featuring the affiliated creators with two companies as sponsors *As of September 28, 2022 Features Many popular creators are affiliated with the company
27. 02-3 New Business (NFTs, Network Business, etc.)
28. 27 New Business / Services https://eggrypto.com/ https://gamewith-nft.jp/ https://gamewith-hikari.gamewith.co.jp/ GameWith Hikari Networks business for gamers EGGRYPTO NFT Game New Business GameWith NFT NFT Game media Other Business Network Business NFTs eSports training software etc.
29. 28 New Business / NFT Games : Overview $82 million (Approximately 10 billion yen) $17.6 billion (Approximately 2 trillion yen) About 200 times higher Transaction volume of the entire NFT market* Recent trends with NFT games • Fitness NFT games where money is earned by walking crypto assets • Major Japanese game makers announce expansion into the NFT and blockchain fields • Major Japanese companies announce entry into the NFT marketplace 2020 2021 * From Coinpost 2022.03.14 “NFT annual transaction volume in 2021 reached about 2 trillion yen, 200 times higher than last year” https://coinpost.jp/?p=329765 • The transaction volume of the entire NFT market in 2021 was 17.6 billion dollars (approx. 2 trillion yen), which is about 200 times higher than the previous year. • The NFT game-related market shows great potential and it is expected to grow significantly in the future as major companies enter the market.
30. 29 「Pay to Play」 All proceeds go to the game developer 「Play to Earn」 Users can also earn proceeds • Overseas, there have been several play-to-earn video games that include elements using blockchain technologies, from which players can earn money. In emerging countries and elsewhere, many players make a living by playing blockchain games. New Business / NFT Games : Overview
31. 30 New Business / About the NFT game EGGRYPTO • EGGRYPTO has pursued casual gameplay and has achieved unusual long-term growth for an NFT game. Rare monsters (NFTs) that can be obtained in the game are sometimes traded for high amounts, indicating the high value of these NFTs. Casual gameplay Continuous growth Values of rare monsters (NFTs) Continuous growth on the three-and-a-half-year anniversary of the release This is rare for an NFT game and could serve as a model case for future markets. General NFT Games Initial investment Necessary Unnecessary Crypto asset wallet Necessary Unnecessary Platform PC browser Smartphone app Users’ main purpose of playing Earning > Enjoyment Enjoyment > Earning User continuity Quit when they no longer make any money Continue playing the game itself EGGRYPTO has pursued casual gameplay since its initial release. Realization of an NFT game with an emphasis on “fun” Recently, the value of NFTs has remained high, and rare monsters (NFTs) that can be obtained for free via basic play in the game are sometimes traded for high amounts. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2021 2022 2023 2024 Ethereum Polygon Number of transactions*1 of NFT (rare monsters) in EGGRYPTO • The highest price traded in the last six months was 1.7 ETH for one NFT. • There are many other transactions of more than 100,000 Japanese yen. • Achieved the highest ranking of 2nd place in transaction rankings*2 Achievements in “OpenSea,” the world's largest NFT marketplace *1 The number of transactions that combine multiple processes on the blockchain into one, an indicator of how actively NFTs are being exchanged. *2 Recent 30-day trading volume in the “Games” category on the “Polygon” chain (as of January 10, 2024)
32. 31 NFT games are difficult for beginners Quality writers Media operation know-how Brand credibility Reach to gamers Contribute to the development and popularization of NFT games Management of media exclusively for NFT games • GameWith NFT, a media platform specializing in NFT games that provides information to help even beginners enjoy NFT games, opened on Wednesday, July 19, 2022. New Business / Media exclusively for NFT games
33. 32 • In March, we began an optical network business specializing in eSports, which only GameWith can provide because we understand games. • It utilizes high-quality networks and know-how from ARTERIA Networks. • Focusing on acquiring new customers through active promotion as soon as the business starts. ※1 Ping value indicates the response speed. The lower the Ping value, the faster the in-game response. Therefore, it is important for this to be as low as possible for online games such as FPS/TPS where one movement can mean the difference between winning and losing. GameWith Hikari has a much lower Ping value than other networks even in test play. ※2 According to an in-house survey of GameWith Hikari users (n=318) Total number of respondents who answered “Very stable,” “Fairly stable,” or “Feels like it is stable” to the question: “Has your connection speed become more stable than the network connection you were using before signing up for GameWith Hikari? Satisfaction Survey※2 88% of users feel that the communication environment is stable Overview of the optical network business • High-speed, low-latency internet access is essential for winning in eSports • GameWith, who truly understands gaming, differentiates itself by providing reliable optical networks • Maximum performance can be achieved by focusing on communication speed and Ping value* by using a dedicated band, etc. New Business / Network Business ”GameWith Hikari”
34. 33 New Business / Network Business ”GameWith Hikari” *Conventional Plan Maximum communication speed 1 Gbps upload/download 10 Gbps upload/download 10 Gbps upload/download Access method NTT collaboration line Shared NTT collaboration line Shared ARTERIA line Exclusive Service area Nationwide Some areas (NTT designated area) Some areas (To be expanded in the future) Features Securing dedicated bandwidth Direct connection to the game server Securing dedicated bandwidth Direct connection to the game server Dedicated proprietary lines Improved corporate internet access for personal use Reliable warranty system Monthly fee (excluding tax) Apartment: 4,400 yen Family: 5,600 yen 6,700yen 18,000yen Anti-malware 〇 〇 〇 SLA (Service Level Agreement) × × 〇 Responding to the various demands of gamers on the strength of ARTERIA Networks' high-quality lines • New plan added to "GameWith Hikari" to be offered from February 1, 2023. • In addition to high-speed models with up to 10 Gbps upload and download speed, a premier plan offering an exclusive line is being rolled out.
35. 34 NFT game EGGRYPTO “GameWith Hikari" Network Business Users Service Offerings Billing Revenue NFT sales revenue Earnings Distribution Internet Connection Service Provision of Optical Fiber Business Expertise Charge Users Service Offerings Promotion Usage Fees A revenue-sharing model jointly developed with our investment company Kyuzan Inc. × Joint Development A model that purchases Internet access services from a joint venture with Arteria Networks and sells them to users • Develop new businesses that leverage GameWith's strengths while also collaborating with business partners. New Business / Business Model
36. 35 ＝ Aiming ability* in shooting games Running ability in general sports Development of eSports training software Development of aim training software for eSports players around the world In the future, we will support various eSports genres and acquire user data to further develop our business * Aiming ability refers to the ability to accurately target a gun in a shooting game. • To be strong enough to win at eSports, training is needed just like with general sports. • We plan to develop eSports training software by focusing on this need. New Business / eSports Training Software
37. 03 Financial Summary
38. 37 Net sales by segment Sales 3,512 million yen Year on year +12.5% 337 million yen Year on year +68.4% Increase mainly in Media Segment due to cost efficiencies, etc. Whole company Media New high in sales recorded 2,440 million yen Year on year +1.7% Media 870 million yen Year on year +42.2% eSports/Entertainment 200 million yen Year on year +85.3% New Business (NFTs, Network Business, etc.) Solid growth Steady growth in eSports business Aggressive upfront investment and rapid growth Whole company Operating profit 1,059 million yen Year on year +35.2% Financial Summary / Summary of Financial Results for the Fiscal Year Ended May 2023
39. 38 Financial Summary / Sales Trends • Annual sales for FY ended May 2023 reached a new record high for the first time in four fiscal years since FY ended May 2019. • Steady progress in shifting the business portfolio in response to the slowdown in the growth rate of the Media Business. Started full-scale medium- to long-term growth as the company's second founding period. 7 389 994 1,582 2,678 3,149 2,890 2,880 3,121 3,512 FY ended May 2014 FY ended May 2015 FY ended May 2016 FY ended May 2017 FY ended May 2018 FY ended May 2019 FY ended May 2020 FY ended May 2021 FY ended May 2022 FY ended May 2023 Media eSports/Entertainment New Business (Unit: Millions of yen) 100% 100% 100% 100% 90% 85% 82% 80% 77% 69% 10% 15% 18% 20% 20% 25% 3% 7% FY ended May 2014 FY ended May 2015 FY ended May 2016 FY ended May 2017 FY ended May 2018 FY ended May 2019 FY ended May 2020 FY ended May 2021 FY ended May 2022 FY ended May 2023 Media eSports/Entertainment New Business New high in sales recorded Steady progress in business portfolio transformation
40. 39 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2016 2017 2018 2019 2020 2021 2022 2023 2024 Financial Summary / Sales Trends Special demand for promotion ▼ Start an eSports business ▼ Game media business expansion ▼ The advertising unit price decreased due to the impact of COVID-19. ▼ “EGGRYPTO" released ▼ DetonatioN, Inc. became subsidiary ▼ New record high in quarterly sales ▼ Listed on Tokyo Stock Exchange Mothers Listed market changes to the first section of the Tokyo Stock Exchange Transitioned to the Standard Market under the new market segmentation of Tokyo Stock Exchange
41. 04 Forecast for fiscal year ending May 2024
42. 41 Forecast for fiscal year ending May 2024 / Business Strategy Policy for the Fiscal Year Ending May 2024 ✓ With the rapid growth of the business, now is an opportunity to expand the business and significantly strengthen promotions ✓ Aiming to maximize profit in the medium- to long-term, short- term profit will decrease ✓ Plan to increase sales and profit due to strong eSports business ✓ From next fiscal year, focus on EBITDA that better reflects business conditions ✓ Maintain improved profit margins through cost efficiencies and secure profits for the Media segment ✓ Shrinking mobile gaming market is seen as a risk Solid growth in existing areas & Accelerated investment in new areas Media eSports/Entertainment New Business
43. 42 Forecast for fiscal year ending May 2024 / Forecast for fiscal year ending May 2024 Full fiscal year FY ended May 2023 FY ending May 2024 Year-on-year (Unit: Millions of yen) Actual Forecast (percent) Net sales 3,512 3,750 +6.8% EBITDA* 459 493 +7.2% EBITDA margin 13.1% 13.2% - Operating profit 337 350 +3.7% Operating profit ratio 9.6% 9.3% - Ordinary profit 313 320 +2.1% Current profit 179 190 +6.1% * EBITDA = Operating profit + Depreciation + Amortization of goodwill 3,512 3,750 459 493 337 350 FY ended May 2023 FY ending May 2024 Net sales (Unit: Millions of yen) • During the fiscal year ending May 2024, sales are expected to reach 3,750 million yen, and operating income is expected to be 350 million yen. • We will invest upfront mainly in promotion of New Business to achieve medium- to long-term growth.
44. 05 Medium-Term Business Strategy
45. 44 20XX ~ 2023 ~ 2013 By adding to our existing media business, our aim is to develop the second and third pillars Sales * Visualization of sales composition Media eSports/Entertainment New Business (NFTs, Network Business, etc.) About the Growth Potential / Plan for Medium- to Long-Term Growth
46. 05.1 Media
47. 46 Medium-Term Business Strategy / Overview of Media Business FY ended May 2014 FY ended May 2015 FY ended May 2016 FY ended May 2017 FY ended May 2018 FY ended May 2019 FY ended May 2020 FY ended May 2021 FY ended May 2022 FY ended May 2023 Network advertising Tie-up advertising ① ② ③ FY ending May 20XX Media: Annual Sales Trends ~ ① Phase of significant growth in line with the rapid expansion of the mobile game market ② PV count declined mainly due to slowing growth in the mobile game market. Transition phase from a focus on network advertising to a focus on tie-up advertising ③ Toward a solid second growth phase due to increased demand for home video game strategies and market share gains, and further expansion of tie-up advertising
48. 47 2,399 2,440 784 1,059 32.7% 43.4% FY ended May 2022 FY ended May 2023 Net sales Operating profit Operating profit ratio Also significantly increase profit margins Toward a business that will be a source of further profits Breaking away from dependence on network advertising Stable growth through focus on tie-up advertising Leveraging the evolution of AI Improved operational efficiency and user experience ✓ Promote internal use of AI technology ✓ Development of strategy chatbot ✓ Utilization for the function of finding games, etc. AI Technology × Support for a variety of platforms × Support for various needs such as game reviews, strategies, etc. Home video games Mobile games PC games NFT games Medium-Term Business Strategy / Medium- to Long-term Strategy
49. 05.2 eSports/Entertainment
50. 49 Medium-Term Business Strategy / Plan for Medium-Term Growth Along with sales growth, aim to return to profitability on an EBITDA basis as soon as possible 612 870 ▲ 141 ▲ 121 FY ended May 2022 FY ended May 2023 Net sales EBITDA FY ending May 20XX ~ (Unit: Millions of yen) eSports/Entertainment segment annual results
51. 50 Medium-Term Business Strategy / Strengths of “DetonatioN FocusMe” eSports Team Advantages are strength in the competition scene and the B-to-B business. The latter leverages connections and sales capabilities as a pioneer in eSports, where DetonatioN FocusMe has been active since 2012. Strength in the B-to-B business Top-class competition results in Japan Trained many players who have gone on to become members of the Japanese national team and compete in World Championships, and accumulated know-how on team building Connections with many companies, local governments, etc., consulting know-how and sales capabilities of eSports as a pioneer in eSports teams Strength in the competition scene
52. 51 Medium-Term Business Strategy / Entered into comprehensive business alliance agreements with an eSports team, Crazy Raccoon Announced the signing of a comprehensive business alliance agreement with Crazy Raccoon, one of the most popular eSports teams in Japan, on November 18, 2023 A post which was released at the same time and featured teams in the VALORANT division received over 20 million impressions. A video interview with the team representative received over 140,000 views, attracting a great deal of attention in the eSports industry.
53. 52 Medium-Term Business Strategy / Strengths of “Crazy Raccoon” eSports Team Large-scale offline event “CR FES” held at Makuhari Messe 18,500 people attended the event, making it the largest event hosted by an eSports team CR FES Managing a team that combines competitive ability and popularity The players have over 9 million followers on social media and over 10 million subscribers on YouTube TEAM REACH Operates an online school specializing in the improvement of gaming skills ”Crazy Raccoon” provides gaming lessons that cannot be taken anywhere else CR Gaming School CR CUP, an original competition hosted by CR, reached a maximum of 230,000 live users. Growing into one of Asia's largest events CR CUP Strengths in the influencer business as well as the competition scene “Crazy Raccoon” is one of the most competitive and popular teams in Japan. The team's strength lies not only in the competition scene but also in the influencer business, and its influence goes beyond that of an eSports team.
54. 53 Medium-Term Business Strategy / Two Axes of eSports Business As a current trend, influencer business utilizing not only the competition scene but also streaming is very important for sustainable growth as an eSports business. Entered into a business alliance with CR to compensate for elements lacking in DFM P P (1) Competition scene/BtoB business Areas of strength for DetonatioN ・Spencer earnings/Tie-up ・Tournament prize money ・Support from game publishers, etc. ・Strong teams and players ・Ability to negotiate and credibility to obtain support money ・Sales force specializing in eSports, etc. ・Participated in World Championships in many categories ・Entered into a partnership in VALORANT division ・Achievements in obtaining top-class sponsors in Japan, including famous companies Means of monetization Required skills and know-how Achievements of DetonatioN (2) Influencer business Areas of strength for Crazy Raccoon ・Video streaming revenue (advertisements, throwaways) ・Merchandise sales ・Hosting events (ticket sales and others), etc. ・Popular teams and players ・Ability to train and acquire influencers ・Art direction skills that stick in the minds of fans, etc. ・Over 20 million total followers on social media ・Top-class influencing ability in Japan ・Ability to attract customers at original events CR FES and CR CUP Means of monetization Required skills and know-how Achievements of Crazy Raccoon +
55. 54 Medium-Term Business Strategy / Medium- to Long-Term Strategy for the eSports Business Already operating one of the most successful eSports teams in Japan, the company will secure stable profit in the medium term by strengthening its influencer business through business alliances and leveraging its strengths to acquire sponsors and contribute to regional revitalization. In the long term, the Company will contribute to the development of the eSports market and player education, with a view to having eSports adopted as an Olympic event. Becoming Japan's representative eSports team Past to present Dawn of eSports Medium term future eSports growth period Long term future eSports maturity period Operate one of the best teams in Japan Pioneer in eSports Strengthen influencer business Regional revitalization through eSports Acquiring new sponsors/increasing unit amounts Contributing to the development of the eSports market in Japan Realization of secured stable profit Education/traini ng support for eSports players Competing in the World Championships Movement toward adoption as an Olympic event Becoming Japan's representative eSports team
56. 05.3 New Business (NFTs, Network Business, etc.)
57. 56 Medium-Term Business Strategy / Medium- to Long-Term Policy 22 100 141 2 56 FY ended May 2021 FY ended May 2022 FY ended May 2023 NFT games Network business Other Rapid growth in both NFT games and Network business Beginning to take off as a business as well. Strengthen promotions and maximize focus on user acquisition Maximize profit in the medium- to long-term＞ Secure profit in the short-term Sales trends (Unit: Millions of yen)
58. 57 Medium-Term Business Strategy / NFT Games: Medium- to Long-Term Policy April 2022 April 2023 User retention rate after 1 month Quarterly sales trends based on app billing FY ended May 2023 Q1 FY ended May 2022 Q1 Q2 Q3 Q4 FY ended May 2021 Q2 Q3 Q4 Q2 Q3 Q4 Steady growth in sales and new users Quarterly sales exceeded 140 million*1 and total DLs exceeded 1.5 million*2 Recently showing a significant increase in user retention rate Make it possible to secure loyal users Maximum focus on acquiring users *1 Gross sales based on in-app purchases *2 Figures as of December 2022 for iOS and Android combined 3.8% 19.0% Aim to maximize sales Five times that of the previous year
59. 58 Medium-Term Business Strategy / Network Business: “GameWith Hikari” To deliver a quality unmatched by our competitors. It does not require capital investment, and we have realized a business model that enables us to secure stable profits. High quality Secured stable profit No capital investment required • We achieve high quality by utilizing the lines and know-how of our capital and business partner, ARTERIA Networks, which mainly provides fiber optic lines to corporate customers. • Through specialization in games, the service is actually being used by many eSports players and teams. • It is possible to acquire new users, especially gamers, even without offering significant cashback or discounts like major competitors. • Able to secure stable profits for a business model that generates recurring revenue from users' monthly usage fees • If the number of users increases, it is expected to become a large source of profits in the future. • No capital investment is required because the service utilizes the networks of ARTERIA Networks. • The only major cost is promotional expenses, and profitability can be achieved once the promotion has stopped. • We are currently focusing on acquiring users for medium- to long-term growth and moving forward within the recoverable range.
60. 59 Medium-Term Business Strategy / Network Business: Profit Structure per User Time of acquisition 1st year 2nd year 3rd year 4th year Profit structure per user Acquisition cost (Promotional expenses, etc.) Accumulated profit Annual sales (Network usage fees) Initial cost Break-even point ✓ Structure with up-front acquisition costs for promotions, etc. ✓ Control acquisition costs within the range of positive earnings in a two-year period ✓ If the number of users accumulates, it is expected to lead to large profits in the medium- to long-term
61. 60 Although making an upfront investment will worsen profits in the short-term, we expect to generate significant profits in the medium- to long-term Operating profit Cost Net sales 2024 20XX ~ Medium-Term Business Strategy / Network Business: Plan for Medium-Term Growth
62. 06 Appendix
63. 62 Representative and President Takuya Imaizumi Director Hideyuki Hiyoshi Director (outside) Tomoyuki Takechi Director (outside) Hirokazu Hamamura Director (outside) Kazunori Ohashi Permanent auditor (outside) Tomoyuki Hangai Auditor (outside) Katsunari Goto Auditor (outside) Toru Morita Director Takahiro Yazaki Appendix / Board member
64. 63 Appendix / Company history June 2013 GameWith, Inc. established September 2013 Game media site "GameWith" released June 2017 GameWith stocks go public on the Tokyo Stock Exchange Mothers market August 2019 GameWith moves to the First Section of the Tokyo Stock Exchange December 2019 Established subsidiary, AtWiki, Inc. July 2021 Established subsidiary, GameWith NFT, Inc. October 2021 DetonatioN, Inc. became subsidiary December 2021 Established subsidiary, GameWith Contents Studio, Inc. May 2022 Established GameWith ARTERIA, Inc. a joint venture with ARTERIA Networks, Inc. April 2022 Overseas subsidiary (sub-subsidiary) "DetonatioN KOREA Co.,Ltd." established by DetonatioN June 2022 January 2023 GameWith moves from the First Section to the Standard Market due to the revision of the Tokyo Stock Exchange market classification Conclusion of capital and business alliance agreements with ARTERIA Networks Corporation and DIGITAL HEARTS HOLDINGS Co., Ltd. Conclusion of comprehensive business alliance agreements with DetonatioN, Inc. and SAMURAI KOBO Co., Ltd. managementing of a professional eSports team “CRAZY RACCOON” November 2023
65. 64 Appendix / Our Initiatives for Sustainability（ESG/SDGs） https://gamewith.co.jp/sustainability With the goal of contributing to solving social issues with games, GameWith has come up with the three key themes of “With Consumers,” “With Society,” and “With Work,” each indicating our area of focus in business.
66. 65 Appendix / List of Investments A venture capital fund supporting mostly North American and European startups in the digital media and entertainment spaces Planning, development, and operation of software applications that promote the use of technology in sports Provision of back-end server services specialized in mobile game development Development and operation of the blockchain game Planning, development, and operation of the blockchain game and digital asset tokens, and development of services using blockchain and cryptocurrency technology
67. 66 The forward-looking forecast statements included in this document, are prepared based on judgements and assumptions based on information available at the time of presentation of this material, and no guarantees are made as to their accuracy. Accordingly, there is a possibility that actual results may differ greatly from forecasts due to various uncertain factors included in these judgements and assumptions, changes in risk factors, and changes in the economic environment. Contact information Disclaimer Please use the inquiry form on the IR website IR website https://gamewith.co.jp/ir Corporate website https://gamewith.co.jp/ GameWith, Inc. Twitter https://twitter.com/GameWith_inc note https://note.com/gamewith