Second quarter of fiscal year ending March 31, 2024
Financial results presentation

Drecom Co., Ltd.
October 26, 2023
Please refer to the Fact Sheet on our website for trends in consolidated financial results, cost of sales, SG&A expenses, andbilling sales in the game business. https://drecom.co.jp/ir/factsheet_202403Q2.pdf

Summary of this document
1H FY2023

Mainstay IP titles performed well in Q2 amid continued difficult market conditions•(Apr-Sep)
Actual•1H Actual Sales: 5,091million yen (-12.2% YoY) Operating income: 472million yen (-70.6% YoY)
Ordinary income: 453million yen (-70.7% YoY)
※1
Net loss -169million yen (vs. net income of 1,056 million yen in the same period last year)
Review of management/development portfolio resulted in extraordinary loss of 192 million yen(609 million yen in 1H cumulative total)

Consolidated full-year forecasts remain unchanged
Forecast for
FY2023•

Expect increase in sales and expenses due to start of distribution of new titles in Q4. Ensuring sound and well-timed
release may take some time; currently examining details of preparatory materials.

•

Full-year forecasts (announced on July 27, 2023):※2

Sales 11,500 million yen, Operating income 500 million yen, Ordinary income 450 million yen, Net income 0 million yen

Business

Steady progress in each business with aim of strengthening IP production capabilities
and diversifying

Progress•

Comic book label "DRE Comics" to begin publication in paperback and e-book format on October 25.

•

Blockchain Game "Eternal Crypt - Wizardry BC-" Has INO; Pre-Release Version Launched October 19

Copyright Drecom Co., Ltd. All Rights Reserved.

*1 Net quarterly loss attributable to owners of the parent *2 Net income attributable to owners of the parent

2

1. Review of Q2 (Jul-Sep) FY2023
2. Forecast for FY2023
3. Medium-term goals
4. Appendix

Copyright Drecom Co., Ltd. All Rights Reserved.

31. Review of Q2 (Jul-Sep) FY2023

Summary of business results for the second quarter of FY2023
Mainstay IP titles performed well in Q2 amid continued difficult market conditions
FY2023
Q1(Apr-Jun)(Millions of yen)

FY2022Q2(Jul-Sep)

1H(Apr-Sep)

QoQ

Q2(Jul-Sep)

1H(Apr-Sep)

YoY

YoY
(1H)

2,346

2,745

+399

5,091

2,873

-127

5,800

-708

Operating income

8

463

+455

472

790

-326

1,607

-1,135

Operating profit ratio

0.4%

16.9%

-

9.3%

27.5%

-

27.7%

-

82

500

+417

582

875

-375

1,784

-1,202

3.5%

18.2%

-

11.4%

30.5%

-

30.8%

-

2

451

+448

453

737

-285

1,547

-1,094

-441

272

+714

-169

534

-262

1,056

-1,226

Net sales

EBITDA*1
EBITDA Margin

Ordinary income
Net income (loss)*2
attributable toshareholders of theparent company

Copyright Drecom Co., Ltd. All Rights Reserved.

*1 EBITDA = operating income + amortization of goodwill + depreciation*2 Reviewing the operation/development portfolio, an extraordinary loss of 192 million yen was recorded in Q2 (609 million yen in
1H cumulative total).

4

1. Review of Q2 (Jul-Sep) FY2023

2Q FY2023 Operating income (QoQ comparison)
QoQ increase due to higher revenues from mainstay titles with high marginal profitability
Decrease in revenues (Increase in expenses)(Millions of yen)

Increase in revenues (decrease in expenses)
Sales
increase
Impact(+409)

180

Labor cost(+18)

Postage(-14)
Outsourcing
expenses(+45)

Advertisingexpenses(-59)

Depreciation
expense(-37)

Gamedevelopment
costs
Cost ofAmount recorded
R&D
materials foras assets*
expenses
game
(-4)
(+57)
development
(-43)

Other
(-17)

463

8
1Q FY2023
Operating
IncomeCopyright Drecom Co., Ltd. All Rights Reserved.

*Amount of development costs such as labor and subcontracting costs mainly related to pre-release games
deducted from manufacturing costs and transferred to assets as "Software in progress".

2Q FY2023
Operating
Income5

1. Review of Q2 (Jul-Sep) FY2023

Q2 FY2023 Revenue from game titles under management
Decision to close “GGGGG,” game released at end of the fiscal year ending March 31, 2023
Profit/loss of 11 titles under management* (Q2 Jul-Sep 2023)

Decision to Close "GGGGG”
Conversion to blockchain game and othermodifications were considered, but due tocompatibility with game model, success ofproject deemed difficult due toincompatibility of game model and otherfactors.

Loss

Profit* Series titles and titles developed for overseas are counted as one title. Number of titles in operation as of Sep 30, 2023. Including two enza titles and BOKU & DRAGONS.
Copyright Drecom Co., Ltd. All Rights Reserved.

61. Review of Q2 (Jul-Sep) FY2023

Topics of each businessGamebusiness•

In existing titles under management, mainstay IP titles performed well•

"Wizardry Variants Daphne" is in closed beta testing→The event attracted more applications than initially expected, with approximately 5,000 participants. Preliminary
indications and feedback on social networking sites, were favorable.

•

Review of operations/development portfolio in light of difficult conditions in mobile game market→Closing of operational title "GGGGG" and discontinuation of development of "Project BEAT".
→Together with impairment loss of 416 million yen in Q1, extraordinary loss of 609 million yen was recorded for the
cumulative Q2 period.

•

Media
business

Publishing/Video Area: Comic Book Label Launched; 2nd Novel Contest also received more
entries than the previous contest→Comic book label "DRE Comics" to begin publication in paperback and e-book format on October 25, 2023→”The 2nd Drecom Media Grand Prix" received 3,487 entries (2,008 entries in 1st Drecom Media Grand Prix)•

Web3 area: "Eternal Crypt - Wizardry BC-" has an INO*; pre-release on October 19.
→Total of 2,300 units were sold and distributed, resulting in an INO of approximately 150 million yen.
→Market environment in Web3 industry is calmer than it has been for a while, but we are off to a good start•Continue to develop/provide new services utilizing know-how from existing businesses→Operating fan marketing support services "Rooot" and "Fanflu", "Load Testing Service"

Copyright Drecom Co., Ltd. All Rights Reserved.

*INO: Abbreviation for Initial NFT Offering. Special NFTs are sold before the game is released with the aim of forming a core fan community. 7

1. Review of Q2 (Jul-Sep) FY2023
2. Forecast for FY2023
3. Medium-term goals
4. Appendix

Copyright Drecom Co., Ltd. All Rights Reserved.

8

2. Forecast for FY2023

Current status and future measures (reiterated)
Current Status•••

New mobile games performed worse than expected.
Impact of severe market conditions impacted existing titles.
Company-wide increase in costs, including R&D expenses.

Future Measures
Ø Improve quality of titles scheduled for release during fiscal year ending March 31, 2024; revise marketing plans
Ø Greater emphasis on evaluation in pre-release game verification and user testing•

Decide whether to conduct additional development and whether to release products according to results of user testing.

•User testing dates: Wizardry Variants Daphne in Fall 2023, Evil Prince and the Puppet within the year 2023, and "Location-based IP
Titles" in Spring 2024.

Ø Review overall strategy for unannounced/prototype stage mobile game titles
Ø Aim to improve probability of success and reduce risk by collaborating with multiple companies and accepting
investment on project-by-project basis.
Ø Control/reduce R&D investment in new business areas such as publishing, video and Web3
Ø Review of company-wide cost reduction and investment plans

Copyright Drecom Co., Ltd. All Rights Reserved.

92. Forecast for FY2023

Progress on future measures
Rebuilding for next fiscal year: Strengthening measures for newly released titles and reviewing investment plans

Future measures (reiterated)

State of progress• Improve quality of titles scheduled for release during fiscal year
ending March 31, 2024 and revise marketing plans• More emphasis on evaluation in pre-release verification and user
testing of games• User testing of "Wizardry Variants Daphne" conducted in
October 2023
• Evaluation for "Evil Prince and the Puppet" scheduled to be
implemented by end of 2023, and for "Location-based IP Titles," inspring of 2024.

• Review overall strategy for unannounced/prototype stage mobile
game titles• Unannounced/prototype stage "Project BEAT" development wascancelled.
• Based on recent situation of new titles, difficult to exceed certain levelof profitability in terms of number of installations and persistence rate,and decision to discontinue development made based on judgmentthat it is risky to continue development• Aim to improve probability of success and reduce risk by collaboratingwith multiple companies and accepting investment on a project-byproject basis.

• Projects in Web3 domains, as well as projects in publishing andimaging business domains, will be implemented.

• Curtail R&D investment in new business areas• Decided to scale back or cancel some projects• Review of company-wide cost reduction and investment plans• Reduction of company-wide overhead and other costs

Copyright Drecom Co., Ltd. All Rights Reserved.

102. Forecast for FY2023

Progress in third quarter of FY2023■ Q3
・In game business, sales expected to be in line with previous year, centered on existing titles
・Media business expected to see increase in sales due to start of comics publication and blockchain game operations■ Q4
・Sales and expenses expected to increase due to start of distribution of new titles
Note it may take some time before release to ensure that everything is in perfect condition, and details of futurepreparations are under scrutiny

Net sales

Full-year forecast:

11,500 million yen

1H: 5,091million yen

Q3 Progress image

Operating income

Full-year forecast:

500 million yen

1H: 472 million yen

Q3 Progress image
Copyright Drecom Co., Ltd. All Rights Reserved.

11

2. Forecast for FY2023

Summary of full-year forecasts for FY2023
FY2023

FY2022
1H(Apr-Sep)

Rate ofprogress

Full Year
Forecast

Q1(Apr-Jun)

Q2(Jul-Sep)

2,346

2,745

5,091

44.3%

11,50010,800

Variable cost

351

340

691

31.6%

2,192

1,386

Fixed cost

1,987

1,940

3,927

44.6%

8,808

7,132

141

81

222

24.5%

906

208

82

140

223

39.4%

567

354

-498

-494

-993

39.3%

-2,523-1,999

8

463

472

94.5%

500

2,281

0.4%

16.9%

9.3%

-

4.3%

21.1%

2

451

453

100.8%

450

2,192

-441

272

-169

-

0

1,159

(Millions of yen)

Net sales

Advertising expenses
R&D expenses
Game development costs
charged to assets*

Operating income
Operating profit ratio

Ordinary income
Net income attributable toshareholders of the parent
company
Copyright Drecom Co., Ltd. All Rights Reserved.

Actual*Amount of development costs such as labor and subcontracting costs mainly related to pre-release games deducted frommanufacturing costs and transferred to assets as "software in progress".

12

2. Forecast for FY2023

Three years to scale up
Finish rebuilding by end FY March 2024; aim for growth in FY March 2025 and beyond.
FY2023

FY2024 – FY2025

Sales: 11.5 billion yen
Operating income: 0.5 billion yen

Sales: CAGR over 20%
Operating margin: Maintain 15%
GrowthRebuilding fornext fiscal year•

Improve profitability ofexisting businesses•

Review investment plans•

Company-wide cost
reductions•

Collaborating with othercompanies involving
investment and acceptanceon a project-by-project basis

GrowthGame
Publication
Animation
Web3

Growth driver• New games• Light novels• Comics/webtoon• Animation/Video

Investment• NFT• Blockchain game

Shareholder
returnCopyright Drecom Co., Ltd. All Rights Reserved.

Game
Publication
Animation
Copyright
acquisition
Web3

ProfitInvestment

Growth driver• New games• Light novels• Comics/webtoon• Animation/Video• NFT• Blockchain games• Rights management• Global expansion

ProfitShareholder
return13

1. Review of Q2 (Jul-Sep) FY2023
2. Forecast for FY2023
3. Medium-term goals
4. Appendix

Copyright Drecom Co., Ltd. All Rights Reserved.

14

3. Medium-term goals

Transformation into comprehensive entertainment company

Current

Medium-term goal
Original IP

Original

Increase in-house IP bydevelopment and nurturing oforiginal IP

Diversification

Mobile gamebusiness

Entertainment

Diversifying development inentertainment business

GlobalGlobalComprehensive
Entertainment
business

Expand content globally

Technology

Technology

Enter new markets withadvanced technology

Copyright Drecom Co., Ltd. All Rights Reserved.

15

3. Medium-term goals

Strengthen IP production capabilities
Elevate IP production capabilities by embracing "our strength" with support of "investment areas publishing, video business and Web3 area."
IP Producing Capability
IP development
and acquisition
policy• Break away from dependence on the F2P
model• Create multi-tiered revenue portfolio based onvariety of monetization channels

IP fan community

IP game development

Distribution

management using SNS/distribution

×

Comicswebtoon

NFT
Copyright Drecom Co., Ltd. All Rights Reserved.

Cross-media development
Animation/video

NFT/
Community Management

×Game Development/

Light novel

Investment
Areas• Expand fan base through crossmedia development• Cultivate IP based on fan
communities

×Diversification of IP
monetization channels

×Our
Strengths

・Focus on quality of IP
developed and acquired
・Aim to own controllable IP×

IP development

Distribution Paper book and ebook sales
Animation/movies
Rights management
Overseas expansion
Blockchain game16

3. Medium-term goals

Status of in-house IP development and nurturing: Wizardry
Acquire copyrights and trademarks of a popular IP and make them our own IP, and then enhance IP value
through multimedia development•

From 2022 onward Novelization and comic book adaptation by Drecom
Media

Blade & Bastard•

Mobile Gaming

Wizardry Variants Daphne•

Blockchain Gaming

Eternal Crypt-Wizardry BCWizardry•

Portal site: https://wizardry.info/(NEW) PC games by other companies (remakes andderivative works)

Wizardry Legacy -BCF,CDS & 8-*1
Wizardry Gaiden: The Five Ordeals *2
Wizardry: Proving Grounds of the Mad Overlord *3,•
1981~.•••

Blade & Bastard

Wizardry Variants Daphne

From 2020• Drecom acquired trademark rights.
From 2009 • Mobile Game Development Announcement
Gamepot, Inc. acquired trademark rights
Derivative Series Development

First software released for PC.
Series development until about 2001

1981
Copyright Drecom Co., Ltd. All Rights Reserved.

Eternal Crypt-Wizardry BC-

2009

Year 2020

Image of IP value enhancement*1: Distributed by D4 Enterprises, Inc. *2: Distributed by IID, Inc. on Steam*3: Distributed by Digital Eclipse on Steam. Classic Wizardry 1-5 is copyrighted by Sirtech Entertainment Corp. and developed under license.

17

3. Medium-term goals"Wizardry": "Wizardry Variants Daphne," the latest in the series
Closed beta test in October 2023. Good feedback on preliminary indicators and social networking sites

Ø Conducted closed beta test (October 10-19, 2023)•••

More applications were received than initially expected, with approximately 5,000 people
participating.
Preliminary results of indicators and feedback on SNS were favorable.
Currently evaluating preparatory contents and timing of release. Possibility of spending time on
bug fixes, additional development, marketing plan redesign to ensure that everything is in perfectcondition.

*The closed beta test recruitment and play period has already ended.
Copyright Drecom Co., Ltd. All Rights Reserved.

18

3. Medium-term goals"Wizardry": novel and comic "Blade & Bastard"
First volume of comics released on October 25. Number of pre-orders exceeded expectations andcomic reprinted before its release. Steady start.
Ø Comic "BLADE & BASTARD 1" was released on October25• First issue lineup of comic book label "DRE Comics“• Wizardry logo sticker included as first shipment bonus• Due to strong pre-order numbers, comic to be reprinted before its
release.

Ø Latest three novels are scheduled for release on
December 8.
• Limited edition with audio drama written by author also availableØ Campaign with cooperation of various bookstores• Posters, promotional videos on the sales floor

Blade & Bastard 2-Wireframe Dungeon & Dragon
with Red Dead-"Bookstore at time of release(June 2023)

Copyright Drecom Co., Ltd. All Rights Reserved.

Shosen Book Tower, 8th floor(Akihabara, Tokyo)
19

3. Medium-term goals"Wizardry": blockchain game "Eternal Crypt - Wizardry BC-"
INO was implemented, and amidst a calmer market environment in the Web3 industry than at one time,a strong start was made

Ø Special NFT sales to precede game release (October 3-10, 2023)• Total of 2,300 NFTs sold and distributed (including those distributed through campaigns,
those held by management, and those held in reserve).
• Each piece sold at price equivalent to US$500. INO amounted to approximately 150 million yen(certain percentage of sales related to this title received from publisher as a revenue share).

Ø Pre-release version launched (October 19, 2023-)• Only those who own the NFT "Adventurer Genesis Collection" sold at time of INO will be eligible.
• Official release will be made after advance period, scheduled to last about one month.

•
•
•
•
•
•
•
•
Copyright Drecom Co., Ltd. All Rights Reserved.

Title: "Eternal Crypt - Wizardry BC -“Genre: Dungeon attack x Cookie clicker
Supported platforms: Browser (PC/mobile) *At time of distribution
Price: Free to play (with in-game purchases)
Distributor: ZEAL NOVA DMCC
Developer: Drecom CO., Ltd.
Country of distribution: Worldwide (Japan and overseas)
Languages: Japanese/English *At time of distribution20

3. Medium-term goals"Wizardry": blockchain game "Eternal Crypt - Wizardry BC-"In Web3 area, entered into business alliances and partnerships with leading companies, not limited to"Eternal Crypt - Wizardry BC-".
Blockchain Game Development Partners

Global Marketing Partners

NFT Sales Partners

Copyright Drecom Co., Ltd. All Rights Reserved.

* In addition to the above, we are working with several other services, companies, and organizations.

21

3. Medium-term goals(Supplemental) Purpose of entry into entertainment x Web3
Aim to create system that benefits both users and management by combining FT/NFT and existing digitalentertainment content to form secondary distribution market
Example: Online game x Web3
Web 2.0
General online games
Diamond(In-gamecurrency)

Diamondsecondary distribution market(In-game currency)

System that benefits both users andmanagement

×x-FT

Weapons andArmor(In-game item)

Cryptocurrency
exchange→

From the user's perspective,
Easy to buy because you can sell themwhen you no longer need them
New entertainments will be created from price movements ofsecondary distribution, buying and selling.

XX Sword(In-game item)xNFT

Copyright Drecom Co., Ltd. All Rights Reserved.

NFT
marketplace

From tmanagement perspective,
Primary sales will become more active.
Commission income from secondary distribution also
contributes to earnings stability.

22

3. Medium-term goals(Supplemental) Purpose of entry into the entertainment x Web3
Web3 creates highly engaged fan community where users are part of project

Old Entertainment (Web 2.0)

Management

Entertainment x Web3
Management

Contents
Offer

a consideration

User

Contents
User andtoken holder

Ø Relationship with management is one-way.

Ø Users are also a part of project as investors

Ø Community formation is spontaneousØ Highly engaging fan communities are formed.

Copyright Drecom Co., Ltd. All Rights Reserved.

23

3. Medium-term goals

Status of in-house IP development and nurturing: Evil Prince and the Puppet
Initiatives to create fan communities from SNS operations, nurture IP, and develop it in multiple areas, including
goods creation and game development
Approx. 120,000 X followers as of October 2023

From 2023 (planned)• Mobile gaming
•
•

•

•

April 2021
Goods now on sale at official online store.

November 2019
Project Presentations

November 2022
Game information released
Real Event Exhibit
Approx. 100,000

Approx. 60,000

SNS followers: approx. 10,000
2019

Copyright Drecom Co., Ltd. All Rights Reserved.

Year 2021

Year 2022

After 2023

Image of IP value enhancement24

3. Medium-term goals

Development and nurturing of in-house IP: Tokyo Stories
An initiative to develop original titles for PCs and consoles on outright purchase basis
Highly acclaimed overseas, with more than 100,000 followers on X
Tokyo Stories -working title-

•
•
•
•
•
•
•
•

Genre: Adventure
Compatibility: PC (Steam) / Console (platform to be determined)
Release date: Undecided
Price: Undecided
Planning/Development/Sales: Drecom Co., Ltd.
Country of distribution: Worldwide (Japan and overseas)
Language: Undecided
Copyright Notice: ©Drecom Co, Ltd.

Copyright Drecom Co., Ltd. All Rights Reserved.

25

3. Medium-term goals

Status of development, acquisition and nurturing of in-house IP:
Drecom Media, a publishing and video brandOne year has passed since launch of light novel label, with 19 series and total of 35 works published.
Comic label launched in Q3 FY2023, focusing on comicalization of light novel works.
Published in Q2 FY2023
Main Works

Publishing and Video Business Cumulative
Total Number of Productions

35
27
18
10

17

通期

Q1

Q2
Q2

FY2022
FY2022
2023年3⽉期
ライトノベル（23/3）
Light novel (FY2022)

Q3(forecast)
Q3(⾒込)FY20232024年3⽉期
ライトノベル（24/3）
Light novel (FY2023)

Copyright Drecom Co., Ltd. All Rights Reserved.

コミック（24/3）
Comics (FY2023)"My fiancé eloped with his cheating partner.
I'm so happy to be doted upon by His
Highness the Prince that I don't want to be
told that he wants to come back now. 3“"The Villainous Daughter Goes on a Trip in aCamper -Self-deportation to enjoy with yourcat-“

Author: Mikoto Sakurai

Author: Punichan

Illustration: kuroyuki
Release date: August 9, 2023
Price: 1,430 yen (1,300 yen + tax)

Illustration: canarinu
Release date: September 8, 2023
Price: 1,430 yen (1,300 yen + tax)

Label: DRE Novels

Label: DRE Novels

261. Review of Q2 (Jul-Sep) FY2023
2. Forecast for FY2023
3. Medium-term goals
4. Appendix

Copyright Drecom Co., Ltd. All Rights Reserved.

27

4. Appendix

Game business: Market overview and business strategy
As domestic mobile game market matures, we will make investments that are not an extension of past to further
strengthen our business foundation
Maturation of domestic mobile game market

Strategy of our game business■Additional investment in titles under operation

ü Smartphone-owning population reaching the ceiling.
ü Competition with other content such as videos, comics,social networking sites
ü Users are fixated by long hit titles
100 Millions of yen

Size of Japan's mobile game market and smartphone ownership
Maturation

14,000and strengthen system•

Re-examine development potential of each title without
assuming attenuation•

Renovation and maintenance to withstand long-term
operation

%

100.0
90.0

12,00080.0
10,000
8,000
6,000

70.0

■Diversification and layering of revenue sources

60.0

•

Expansion into growing global markets.

50.0

•

Deployment to other platforms such as PC/consoles.

•

Introduction of revenue models other than Free toPlay/Pay to Win type such as outright purchase.

40.0
30.0

4,000

20.0
2,000

10.0

0

0.0
2012年
2012 2013年2013 2014年
2014 2015年
2015 2016年
2016 2017年
2017 2018年
2018 2019年
2019 2020年
2020 2021年
2021 2022年
2022
Mobile Game Market Size
モバイルゲーム市場規模

Smart phone owning household ratio
スマートフォン世帯保有率

Source: Famitsu game white paper, ministry of internal affairs and communications white paper on information and communications
Copyright Drecom Co., Ltd. All Rights Reserved.

28

4. Appendix

Game business: Pipeline of operational and development titles
Secure long-term earnings by making additional investments for existing titles
Aim for diversification with release of new titles with different initiatives
2011 - 2022

After 2023

Titles inoperation

11

Additional
investment andsystemreinforcement→Securing long-term
stable earnings*

Scheduled for release in fiscal year ending March
31, 2024: 2

Titlesunderdevelopment• Wizardry Variants Daphne• Evil Prince and the Puppet

4

Scheduled for release in fiscal year ending
March 31, 2025 or later: 2• Location-based IP titles using “AROW”

New initiatives ineach title→Diversification andlayering• Unannounced title (developed by Drecom)* Series titles and titles developed overseas are counted as one title. Titles for PC and consoles are not included. One title will be closed.
Copyright Drecom Co., Ltd. All Rights Reserved.

29

4. Appendix

Game business: Pipeline of operational and under development titles
Business

StatusDefinition

Number of projects

Operation

Titles in operation

11 *Ø Other company distribution: 5 titles
Ø In-house distribution: 6 titles

Game

Development•

Titles underdevelopment withprospect for
releaseCommercialized
development

Prototype

Details

Wizardry Variants Daphne→ 3D dungeon RPG

4

Titles for
Smartphones

Titles for PC andconsoles1

Titles at stage
beforecommercialization
development

Several•Evil Prince and the Puppets→ Dark fantasy adventure•

Location-based IP titles using “AROW”•

Unannounced title (developed by Drecom Co., Ltd.)•Tokyo Stories -working title-

Ø Reviewed overall strategy.

* Series titles and titles developed overseas are counted as one title. One title will be closed.
Copyright Drecom Co., Ltd. All Rights Reserved.

30

4. Appendix

Revenue status of titles in operation (by release date)
Total sales of titles under operation
2011

2014

FY2021

2015

2016

2017

2018

2019

FY20222020

Total business profit transition of titles under management
2021

2022

FY2023

2023

2011

2014

FY2021

2015

2016

2017

2018

2019

FY2022

2020

2021

2022

2023

FY2023*Please refer to the fact sheet posted on our website for consolidated business performance trends, cost of sales, SG&A expenses, and game business billing sales trends.
https://drecom.co.jp/ir/factsheet_202403Q1.pdf
Copyright Drecom Co., Ltd. All Rights Reserved.

31

4. Appendix

Game titles in operationGame title

Distributor

Service start date

Chokotto Farm

Drecom Co., Ltd.

Jan 2011

ONE PIECE Treasure Cruise

BANDAI NAMCO Entertainment Inc.

May 2014

BOKU & DRAGONS

studiorex Co., Ltd. *1

Feb 2015

Derby Stallion: Masters

Drecom Co., Ltd.

Nov 2016

Everybody's Golf

Forward Works Corporation

Jul 2017

THE IDOLM@STER SHINY COLORSBANDAI NAMCO Entertainment Inc.

Apr 2018

NEKO & DRAGONS

studiorex Co., Ltd.*Apr 2019

Super Robot Wars DD

BANDAI NAMCO Entertainment Inc.

Aug 2019

Disgaea: Hour of Darkness RPG

Drecom Co., Ltd.

Nov 2019

New Japan Pro-Wrestling Strong Spirits

Bushiroad Inc.

Feb 2022

Drecom Co., Ltd.

Mar 2023

GGGGG

*2

*1 studiorex, Co., Ltd. joined our group in March 2020.
*2 "GGGGGG" will be closed.
Copyright Drecom Co., Ltd. All Rights Reserved.

32

4. Appendix

Glossary
Terminology

Meaning

Games distributed in-house

Games for which Drecom is the distributor. We are in charge of game planning, development, advertising,and sales.

Games distributed by othercompanies

The game is distributed by another company, and Drecom is in charge of development as a partnering company.

Platformer

Apple, Google, and other companies that provide service infrastructure systems to users and third parties.

Gross sales

The amount of money paid by the user to the distributor, Drecom.

Net sales

The amount of money distributed from the distributor to the developer, Drecom.

Developer

A company responsible for the development of games.

Amount of game development costs
charged to assets

Amount of development costs, such as labor and subcontracting costs, mainly related to pre-release games,
deducted from manufacturing costs and transferred to assets as "Software in progress".

R&D expenses

Costs associated with planning and creating prototypes for new games and services.

IP

Abbreviation for Intellectual Property.

Commercialized development

Game development is in full swing.

Anniversary Events

Every six months and a year, an event is held that boosts the game. The number of active users and sales often
rise compared to normal times due to the introduction of many new measures and contents

Copyright Drecom Co., Ltd. All Rights Reserved.

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For trends in consolidated financial results, cost of sales/ SG&A expenses, and sales of game business billing,
Please see the fact sheet posted on our website.
https://drecom.co.jp/ir/factsheet_202403Q2.pdf

Among the perceptions, strategies, plans, described in this document, the outlook is not a historical fact but contains uncertain elements. Actual results
may differ materially from those in the forward-looking statements for a number of reasons. Important factors that may affect actual business results
include, but are not limited to, economic conditions surrounding our business, social trends, and changes in relative competitiveness due to demand
trends for the services we provide.