Endless History

Falcom 2014 End of Year Financial Statement – Ys Will Be 2015’s Primary Initiative

ys

Falcom released their financial reports for the fiscal year that ended on 9/30/2014. Some of the basic key points from the supplementary powerpoint for the balance sheet can be seen below:

Total Sales: 2,541,000,000 yen (approx. $21,752,220) (a 38.1% increase from 2013)
Operating Profit: 1,302,000,000 yen (approx. $11,145,760) (83.2% increase from 2013)
Operating Income: 1,303,000,000 yen (approx. $11,155,760) (83.2% increase from 2013)
Net Income: 773,000,000 (approx. $6,618,110) (77.5% increase from 2013)

They are predicting the following numbers for the 9/2015 period:
Total Sales: 2,000,000,000 yen (approx. $17,119,420)
Operating Profit: 750,000,000 yen (approx. $6,419,780)
Operating Income: 750,000,000 yen (approx. $6,419,780)
Net Income: 483,000,000 yen (approx. $4,134,720)

9/2014 has provided the second ‘record earnings’ in a row for the company, after the successful sales of Sen no Kiseki in the Asia regions and the release of Sen no Kiseki II in Japan and Asia. Through 9/2015, they expect the continued sales of Sen no Kiseki and Sen no Kiseki II, along with newcomers to the Kiseki series both domestic and overseas. They also have their aim on a successful release of their new title, as well.

sen

Topics for 9/2014 Period
* Continuing the trend from 2013, the Legend of Heroes Sen no Kiseki II won the Japan Games Awards Future Award in 2014 at Tokyo Game Show, just like its predecessor. When compared to the number of titles shown at TGS, Sen no Kiseki II was one of 1,363 titles shown, amongst 421 exhibitors.

* The Legend of Heroes Sen no Kiseki marked Falcom’s first Asian release, by having the title launch in Hong Kong, Taiwan, and Korea in both the Chinese and Korean languages.

* Asia users took to the release very well. In Hong Kong, Taiwan, and Korea, there were many reports of the initial shipment of the games being soldout at stores.

* The Legend of Heroes Sen no Kiseki II saw a simultaneous release in both Japan and the Asia region.

Initiative for 9/2015 Period
* A new title for the Ys series is under development for the Playstation 4 console and the Playstation Vita handheld. First published in 1987, this 27 year old masterpiece series has been on multiple platforms and seen success in North America, Europe, and Asia regions.

* Development for this large scale title is progressing well. More information should be released from Falcom soon.

More details on the financial report can be found behind the cut.

Company Name: Nihon Falcom
Nikkei Code 3723
URL http://www.falcom.co.jp

Date of Report: 11/13/2014

Period Reported: 10/1/2013 ~ 9/30/2014

Basic Results

  Sales Operating Profit
2014 ¥2,541,000,000
(approx. $21,752,220)
▲38.1% ¥1,302,000,000
(approx. $11,145,760)
▲83.2%
2013 ¥1,840,000,000
(approx. $15,739,550)
▲44.7% ¥710,000,000
(approx. $6,073,080)

▲107.9%
  Operating Income Net Income
2014 ¥1,303,000,000
(approx. $11,155,760)
▲83.2% ¥773,000,000
(approx. $6,618,110)
▲77.5%
2013 ¥711,000,000
(approx. $6,081,630)
▲107.3% ¥435,000,000
(approx. $3,720,460)
▲101.1%

Administration Results – Analysis of Financial Data

  1. Analysis of Administration Results
    1. Administration Results for the Current Term
      • This fiscal year, changes in the game software market include expansion of mobile applications, and changes in the portable and console gaming markets. While competition is very fierce, excellent products will help keep a place in a tough market.
        The company itself has remained in favor of its userbase, after last year’s release of The Legend of Heroes Sen no Kiseki to Playstation 3 and Playstation Vita systems, and won various awards including the a Playstation Award, a Famitsu Award, and First Prize with the Japan Games Awards.
        Over this previous term, the licenses have gone with the launch of The Legend of Heroes Sen no Kiseki in the Asia region. Furthermore, the the Kiseki series 10th Anniversary title and sequel to Sen no Kiseki, The Legend of Heroes Sen no Kiseki II, had both a simultaneous domestic and Asia-region release.
        Also, various contents based from the company have made their appearances in online games, and smartphone applications, as well as other media releases in the form of TV anime, comics, and novalizations. Live events to commemorate the 10th anniversary happened both inside and outside of the country, and there are plans to press forward with these developments.
        The outcome for all of this led to sales of 2,541,000,000 yen, (up 38.1% from last year), an operating income of 1,303,000,000 yen (up 83.2%), and a net income of 773,000,000 yen (up 77.5%) for this current term. Details for the two different areas of sales are below.
      • Product Sales – In June of this fiscal year, The Legend of Heroes Sen no Kiseki was released in Chinese and Korea for markets in Hong Kong, Taiwan, and Korea. The game saw success in its release, as it was sold out in many stores in the Asia region.
        With the Playstation 3 and Playstation Vita release of The Legend of Heroes Sen no Kiseki II, the Kiseki series maintained its long-selling status as the userbase continued to support it at the series’ 10th anniversary. At Tokyo Game Show, Sen no Kiseki II was awarded a Grand Prize in the Tokyo Games Future titles class. The game also saw large numbers shipped out in the Asia region for its simultaneous release.
        As a result, the product sales for this fiscal year were 1,895,000,000 yen (up 26.4% from last year).
      • Licensed Goods – This year saw expansion of the company’s contents over multiple platforms, as well as characters being licensed to be used in various areas, and games being released for PC outside of Japan on the STEAM platform showing favorable sales, as well as sales of Ys Memories of Celceta in North America and Europe. Within Japan, The Legend of Heroes Ao no Kiseki Evolution was released for the portable game system, the Playstation Vita.
        Also, there were collaborative efforts involving The Legend of Heroes Sen no Kiseki II; these include Capcom’s Monster Hunter Portable G, and the heavily downloaded Road to Dragons by Acquire, an expansion to anime, and with the original banner flags throughout Tachikawa, there was a significant increase to the company’s userbase.
        As a result, the licensing sales for this fiscal year were 646,000,000 yen. (up 89.4% from last year.)
    2. Forecast for the Next Term
      The next financial period will be the first time that the company is behind promotional sales for the Legend of Heroes Sen no Kiseki and Sen no Kiseki II both in domestic and foreign markets.
      Not only that, but a new large-scale title is currently in development set to be released during the next period. Furthermore, this will be a highly recognizable IP, that this company will be to actively promote.
      Due to this, the estimation for the results for the term that ends in September 2015, is that the total sales will be 2,000,000,000 yen, with an operating profit of 750,000,000 yen, and a net income of 483,000,000 yen.
      The performance for the company may change over the next period, based on the sales and trends of new products. Many of the sales and changes may occur during the second half of the year, so up to the second quarter, the numbers may appear to fall short of the predictions.

Financial Statements – Balance Sheet (At 10,000 yen increments)
  2013 2014
Assets    
     Current Assets    
          Cash Available 1,855,343 2,465,346
          Accounts Recievable 1,198,438 1,612,572
          Finished Products 4,449 2,470
          Raw Materials 5,878 4,558
          Adv. Payment Expenses 4,747 4,652
          DTA 41,300 59,676
          Other 3,014 2,113
          Total of Current Assets 3,093,170 4,151,389
     Fixed Assets    
          Tangible Fixed Assets    
               Facilities 16,281 16,281
                    Sum of Depreciation ▲11,015 ▲12,163
                    Facilities Equipment 5,265 4,118
               Tools, Equip., Fixtures 29,848 32,085
                    Sum of Depreciation ▲26,652 ▲26,105
                    Tools, Equip., Fixtures 3,195 5,979
               Total of Tangible Fixed Assets 8,460 10,097
          Intangible Assets    
               Software 8,250 6,661
               Telephone Lines 757 757
               Total of Intangible Fixed Assets 9,007 7,418
          Other Investment Assets    
               Deferred Assets / DTA 17,990 8,742
               Security Deposits 31,739 31,407
               Total Other Investment Assets 49,730 40,150
          Total Fixed Assets 67,199 57,666
     Total Assets 3,160,369 4,209,056
Debts    
     Current Liabilities    
          Accounts Payable 233,908 304,345
          Arrears 78,742 112,551
          Accrued Expenses 14,638 14,245
          Unpaid Corporate Taxes 297,420 519,448
          Unpaid Consumption Taxes 38,739 55,073
          Advance Received 24 10
          Deposit Received 5,730 9,346
          Bonus Provisions 21,000 21,750
          Total Current Liabilities 690,201 1,036,991
     Total Liabilities 690,201 1,036,991
Net Worth    
     Stockholder Capital 164,130 164,130
     Capital Surplus    
          Capital Reserves 319,363 319,363
          Total Capital Surplus 319,363 319,363
          Profit Surplus    
               Misc. Profit Surplus    
                    Special Reserves 710,000 710,000
                    Transferred Profit Surplus 1,276,672 1,978,607
               Profit Surplus Total 1,986,672 2,688,607
          Treasury Stock n/a ▲36
          Total Stockholder Capital 2,470,165 3,172,064
     Total Net Worth 2,470,165 3,172,064
Total Liability Net Worth 3,160,369 4,209,056

Financial Statements – Profit and Loss Statement(At 10,000 yen increments)
  2013 2014
Sales    
     Product Sales 1,499,470 1,895,100
     Royalty Income 341,041 646,075
     Total Sales 1,840,512 2,541,175
Sales Cost    
     Product Sales Cost 439,128 545,394
     Sales Cost Total 439,128 545,394
Overall Sales Profit 1,401,384 1,995,781
Distribution and Administrative Costs    
     Freight Costs 18,363 14,671
     Advertising Expenses 67,331 84,672
     Promotional Expenses 43,893 49,722
     Executive Pay 57,380 51,296
     Salary and Benefits 20,657 51,255
     Bonuses 2,413 4,861
     Bonus Reserves Carried Over 1,940 2,340
     Legal Welfare Costs 12,344 12,661
     Hiring Fees 12,863 12,545
     Utility Costs 1,235 1,170
     Commission Payment 34,718 36,909
     Supplies Expenses 2,337 1,616
     Traveling Expenses 1,598 1,499
     Postage 645 634
     Depreciation Costs 1,919 1,582
     Research and Development Expenses 400,722 382,962
     Other Expenses 10,364 13,258
     Total Distribution and Administration Costs 690,730 693,661
Operating Profit 710,653 1,302,120
Earnings Outside of Business Operations    
     Interest Receipts 400 470
     Exclusion of Unpaid Dividends 499 702
     Total Earnings Outside of Business Operations 899 1,173
Net Income Before Taxes 711,521 1,303,223
Corporation, Municipal, and Enterprise Taxes 301,758 538,456
Adjustment of Corporation and other Taxes ▲26,162 ▲9,127
Total Corporation and Other Taxes 275,595 529,328
Current Net Income 435,926 773,895

[ Falcom’s Fiscal Year Financial Report (PDF) ]
[ Explanatory Power Point on the FY Report (PDF) ]

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Kirsten Miller
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The webmaster, creator, and administrator of Endless History and all the sites located on esterior.net. Web developer and designer by day, translator, Kiseki crack theorist, and game streamer by night. Also, apparently a very floofy guy.

3 thoughts on “Falcom 2014 End of Year Financial Statement – Ys Will Be 2015’s Primary Initiative

    1. Kirsten MillerKirsten Miller Post author

      I don’t think there was really any figuring of Sen 3 being next year, with the announcement of Ys 8 in 2015. Falcom generally releases one big game a year, so they have to drop Ys into the lineup somewhere.

  1. Pingback: Falcom: Asia Took the Ys Release Very Well | The Sun Rising Blog

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