What Future Sanrio Games Envisions? Tomokuni Tsuji Discusses Means of Expanding the Fan Base and IP Originating From Games

Kosuke Hamasaki: Regarding numerical aspects such as sales targets for the games, I will refrain from answering.
As for regions, since these are simultaneous worldwide releases, we want to deliver both physical and digital versions globally.
Also, since it is a party game, we expect families to play. Because Sanrio characters have very high recognition among Gen Z in North America, Europe, China, and Asia, we believe those groups will also enjoy them.

Tomokuni Tsuji: We have not decided on a specific amount for the game business.
Basically, we will proceed by expanding functions, including human resources, so there is certainly a possibility we will invest in the game business.
We plan to make investments aligned with our future business within the 50 billion yen framework.

Kosuke Hamasaki: I will refrain from mentioning specific individual IPs or companies, but as Japan is often called a character powerhouse, I think various characters are active in various game genres.
For example, FPS games are popular globally, but from a parent's perspective, some may feel a sense of resistance toward letting their children play games where people shoot at each other.
However, by wrapping the game in the world of a character, it becomes a completely different game experience, and we see many examples in Japan of games where parents think, "I might let them play this kind of game," or "I want to try it myself."
Therefore, we want to work with the philosophy of "Everyone getting along well" with Sanrio characters and combine it with popular game genres to sublimate them into new ways to play.
Among those, we want to leverage the "cuteness" that is the strength of our characters. Regarding the party game announced this time, players can discover new forms of cuteness, such as how Cinnamoroll's ears fluff up when he jumps.
I believe those points are Sanrio's strengths.

Kosuke Hamasaki: As you pointed out, the initial investment for game development is growing, and while AAA titles are currently the global mainstream, we think every day about what kind of games we can provide.
Specifically, it is important to properly build a game portfolio.
We mentioned a plan to release 10 titles, and we will diversify so we can bring smiles to various users. If we find success stories among them, we plan to pursue sequels, horizontal expansion, and aggressive moves into surrounding areas.
Instead of ending with one game if it fails, we will lower risk by using the revenue obtained to cultivate the next game genre.
Also, by operating games while taking risks together with development companies through joint business ventures, we believe that delivering a variety of games will lead to risk hedging.

Kosuke Hamasaki: I will refrain from discussing specific prices at this time, but I think it will be the price of a general console game.
Regarding the game business being in deficit this term, due to P&L circumstances, we depreciate everything in the first year of a title's release, so as explained in the IR, costs tend to pile up and lead to a deficit in the first year.
If each game title becomes a hit and is monetized properly, I believe it is fully possible to monetize the game business as a standalone entity.

Kosuke Hamasaki: Since Sanrio characters are recognized overseas, I believe the games will be accepted by many fans there as well.
I think it will be significant in the sense of letting people know a new side of Sanrio characters.
In addition, in regions where merchandise expansion hasn't progressed that far or regions without theme parks, it is possible that games will reach them first.
Consequently, I expect this will lead to the acquisition of new Sanrio fans.

Tomokuni Tsuji: Currently, our character licensing share in North America is about 3–4%, but over 60% of that is Hello Kitty.
We aim for a 10% share in North America in 10 years, but it is quite difficult to exceed 3% with a single character, so we must also increase the share of characters like Kuromi and Cinnamoroll.
Therefore, while it is a party game this time, various characters can be expanded in a form different from video, so I believe it has great significance for our future licensing business in North America.

Kosuke Hamasaki: Currently, we are working with Ateam to create a game for characters called Fragaria Memories.
We anticipate that games focusing on a single character, games for new characters, and games that delve deeper into the world of specific characters will also be released in the future.

Kosuke Hamasaki: First, I think Sanrio Party Land will be a title that can be played by a very large number of kids and families.
From a promotional perspective, we will make it a title that parents, who care about what kind of game their child plays for the first time, will accept, thinking, "Sanrio Games is safe, secure, and a good game," by having them recognize us through various media.
By doing so, I believe there is room to have new people become Sanrio fans in the gaming domain.
In the future, we are anticipating mobile titles and others in addition to consoles, but Sanrio characters have performed various forms of collaborations, not limited to the game business.
For example, there have been various collaborations with music artists and characters from other companies, and by realizing such things at Sanrio Games as well, I believe we can create opportunities for people who don't know much about Sanrio characters or those who aren't into games to become interested.

Tomokuni Tsuji: Since I want to place expectations on IP, I want to launch projects for boys and men—groups that have until now not really been part of the Sanrio fan base.
The family Sanrio Party Land targets is a group we haven't been able to approach with merchandise.
In the future, we will continue to increase the areas we can approach with character branding and existing characters, and we also want to create new targets.

Kosuke Hamasaki: We intend to deliver titles in various genres for various targets.
For each game title, we are creating them with a strong awareness from the planning stage of what kind of touchpoint will allow a specific target to learn about the game and come to like the characters, so please look forward to it.

Kosuke Hamasaki: Regarding Roblox, it is the largest game platform globally, and we are releasing games in a licensed format.
From the perspective of creating Sanrio Obsession Time, we want to work on it as a very important touchpoint.
VR allows for an experience different from games.
It is an area with value different from games, such as the sense of immersion that allows you to enter the character's world as it is, and the ability for characters, users, and creators to communicate with each other within that VR space.
Therefore, we want to properly nurture and invest in it as a separate business from games.
Synergy between digital platforms is also in view; for example, we are anticipating things like being able to take items obtained in a specific game into a VR space, so while creating VR content, we want to think about having it link properly with game business content.

Kosuke Hamasaki: Regarding the differences in game platform users, VR is still in a situation where relatively core fans or men are dominant.
Sanrio will create various content by collaborating with other companies' IPs without sticking solely to our own IPs.
In that context, the game business has relatively many existing fans of Sanrio characters, so we believe we can expand the fan base by delivering smiles to various people and connecting them through experiences.

Kosuke Hamasaki: For the 10 titles planned for rollout, although there is some overlap, basically almost all have different development companies as partners.
There are various patterns of collaboration, such as joint investment or Sanrio investing 100%.
We consider development companies after taking the game genre and target into account, and it is also important that the development company feels they want to build it together if it involves Sanrio characters.
We choose such companies as collaboration partners.

Kosuke Hamasaki: Currently, there are no personnel within Sanrio known as engineers, so basically all titles to be developed will be in the form of joint productions with external collaboration partners.
Within Sanrio, we are mostly coming up with plans and primarily overseeing the selection of Sanrio characters, game genres, and game companies, as well as the design and progress of the experiences we want to deliver.

Kosuke Hamasaki: We emphasize things like having a track record in a specific game genre or being a company with a pipeline that will allow them to pour their soul into building it together with us.
On the other hand, the producers of the Sanrio Game Business Division have had close discussions with development companies they originally had relationships with.
Many cases start as projects at the timing when we feel confident that a good game can be made with this genre and this team structure.
Depending on the future, in-house production is not impossible depending on the expansion of the game business, but for now, we anticipate building games together with various external partners who have created attractive games.