[#ThrowbackThursday] Falcom’s December 2016 Shareholder Meeting Notes and Q&A Session

Image from hr_crf2.

In going through some old posts that I never finished, I’ve found a couple of them that should be posted, regardless of how old they are. So I have posted this one, and set the other to be part of a ‘Throwback Thursday’ thing! Please enjoy! Everything past this point is what I had written originally on the post back in December 2016.

On 12/20/2016, Falcom had their 15th annual shareholders meeting. While I’ve posted about the reveals from the meeting on twitter in other articles and on my own twitter, I will add in some details from the meeting, thanks to the tweets from @michsuzu and from the blog post written by hr_crf2.

For the majority of people out there, the meeting’s prime events were the reveals of Ys VIII PS4 for May 2017, and Sen no Kiseki III for fall 2017. But a number of other things happened in the meeting, related to the current health of the company.

Details about the meeting can be found underneath the cut.

Shareholders that arrived to the meeting were greeted with gifts: a Tokyo Xanadu eX+ clear file, Ys VIII Lacrimosa of Dana Original Soundtrack Mini, the Falcom 2017 Desktop Calendar, and a Mishy keychain.

The meeting had about 50-60 people attending. The average age of the shareholders was unsuually young, all appearing to be in their 30’s and 40’s. This number has grown and it was even pointed out that there were about ten women amongst the gathered shareholders, as well. The management of the company entered the meeting room at 1:29, and president Toshihiro Kondo began the meeting at 1:30pm.

Falcom currently has 4,592 shareholders. There were several company amendments that were voted on, and 786 shareholders had cast ballots on these articles. The next speaker was Tomio Murayama, the company’s full-time auditor, who presented a report, which had nothing unusual outstanding on it.

President Kondo was brought back up to talk about the company’s financial status- touching mostly on the information that had already been reported in the End of Year balance sheet.

@michsuzu states that on the monitor during this, that they had projections posted for Ys VIII’s sales. Other numbers posted were:

  • Ys Origin – 260,000 units
  • Ys I-II – 200,000 units
  • Sora no Kiseki FC – 270,000 units

[Editor’s note: there is no clarification on regional sales with these numbers. I can’t make the assumption on whether this is regional or worldwide.]

From this point on is when Kondo brings up the plans for 2017. The first order of business on this is that Ys VIII Lacrimosa of Dana for the PlayStation 4 will be released on 5/25/2017. He also talked about the work with the Sen no Kiseki musical that will be happening in Jan 2017, and also stated that the followup title, Sen no Kiseki III, will be released in Fall 2017 as a PlayStation 4 exclusive title.

Additional chart of numbers from hr_crf2. (As a note, “Year 16” is predicted numbers.)

Division Year 12 (2013) Year 13 (2014) Year 14 (2015) Year 15 (2016) Year 16 (2017)
Total Sales 1,840,512 2,541,175 1,575,032 1,464,182 1,800,000
710,000 1,302,000 692,807 584,331 750,000
Net Income 435,926 773,895 456,154 386,907 500,000
Income per Share 42.41 yen 75.28 yen 44.37 yen 37.64 yen
Net Worth 2,470,165 3,172,064 3,525,338 3,840,286
Net Worth
Per Share
240.29 yen >380.57 yen 342.94 yen 373.57 yen
Dividends 5 yen 5+5 yen 5+2 yen 5+2 yen
Product Sen no Kiseki Sen no Kiseki II Tokyo Xanadu Ys VIII Sen no Kiseki III

Following up this information, Kondo opened the floor to have a question and answer session with the shareholders. The questions and answers I have will be coming from both @michsuzu and hr_crf2 once again.

All answers come from Toshihiro Kondo, unless otherwise noted.

Are there any plans to potentially reach out to Makoto Shinkai, who once oversaw animated works for Falcom, to help potentially increase the value of the company’s brand?

While at this point, there are no plans to collaborate with Makoto Shinkai, but we would not be adverse to working with him again.

A shareholder had asked that, as the company is ‘cash rich’ if they could get a 30% increase to dividends. The shareholder also asked about the decrease in employees. [Ed Note: Falcom’s employee count fell during the 2016 year.]

The video game industry marketplace experiences many changes. While it is currently consumer based, this cash is necessary in case of the need of major changes on the horizon.

This company is still one of the leading companies in the industry in terms of years of service [from employees]. We have had three interviews with our employees regarding working conditions, and this is something that may take a few years to fully answer.

The next question was a request to detail the overseas releases of their titles.

The Asia region is focused on Hong Kong, Taiwan, and Korea, but in recent years, an expansion has begun to happen in the North American region as well. As such, these are the two largest areas.

However, the popular titles for them are different. The Asia region has a strong interest in the Kiseki series, while the North American region shows stronger sales in the Ys series. This isn’t just with English language releases, but also with various other language releases in Europe.

Are there any plans to do any localizations in-house?

We have considered it, but issues with cash flow and review processes make that difficult. We currently leave that to our licensors, but we may reconsider this if situations change.

Regarding recruitment, which is more important? New graduates or those who have been in the field for awhile?

We look at recruiting recent graduates for the important opportunity to directly train them, but if there is a decrease in the number of young applicants, we take on an assertive position in recruiting experienced individuals.

How many of your 46 employees are members of your development team?

Approximately 70%, coming to about 30.

How many partner corporations do you work with?

This varies based on the time period, but normally 2 to 3 for graphics, and 1 for programming.

What are corporate governance policies regarding interactions with organized crime groups?

(Answer from Nakano.) We perform screening with business partners to check if they’re involved in these groups. In the case that we determine that they have contracts with crime organizations, we immediately cancel our contract with them. This is established in the company’s code of ethics.

Is there any interest in bringing in corporate directors from outside the company?

Our current policy is to promote individuals from within the company that not only can take on the duty with an understanding of listing regulations, but who also knows the culture within the company as well. But we may reconsider this in the future.

What are the aspirations of the current company directors?

* (From Mieko Ishikawa, Design Unit Director)
I’m primarily in charge of the marketing/sales unit. We seek to serve our fans and customers first and foremost, and I think about how everyone in the shop accepts our measures gratefully. I think the results of the satisfaction from the staff that develops these products shows itself on the outside.

* (From Takayuki Kusano, Creative Unit Director)
I put all of my energy into our latest titles, and I love hearing the feedback from the users. It always makes me think about the work in progress on our future titles.

* (From Takashi Nakano, Corporate Unit Director)
I’m in charge of general affairs, management, and licensing. As we gain more and more licenses, I hope to do my best in managing them skillfully.

* (From Toshihiro Kondo, Representative Director/President)
Since I entered the company as a fan, and held responsibilities over scenario development, I put all of my energy into these recent events. While domestic [sales] are leveling out, foreign recognition of the company has increased, so I wish to turn my focus in that direction. I want to strengthen all of our brands, and put forth more energy towards new works such as Tokyo Xanadu. Through the creation of these, I feel that we can increase our customer base.

What are the sales landmarks for Sen no Kiseki III?

While we do not have a tangible number for the landmark, we are seeking to sell at least as many copies as the previous title.

Are there plans to do a PlayStation 4 bundle for Sen no Kiseki III?

We want to do a PS4 bundle, but we don’t have the means to do it within the company. We will speak with our outside partners about this.

Because of the change of platform for Sen no Kiseki III, the data link won’t be possible. Are there plans for handling this?

We recognized that in order to turn this game towards overseas sales, we needed to develop it for the PlayStation 4. While data linking will be difficult, we know that users enjoy this, and so we are considering a means to accomplish this.

Will there be anything regarding a special edition Falcom Magazine for shareholders?

This idea can be discussed at a later board of directors meeting.

What is the basis of the 1,800,000 sales number for the 2017 term?

We are anticipating strong sales with our newest title, Sen no Kiseki III, being released at the end of this period. Additionally, Ys VIII be released domestically in May 2017, we also anticipate that its release in North America for PlayStation 4 and Vita will match or surpass domestic sales (Editor’s Note: the PC port of Ys VIII hadn’t been revealed at this time.)

What is the reason for the 20% decrease in licensed sales, when compared to the 6% increase of total domestic sales?

This is largely related to overseas titles. This has been caused by the delays of titles that we expect to sell well overseas- Ys VIII and Tokyo Xanadu.

When there were no more questions, they had their votes for the shareholder meeting, with the following results:

  • Surplus Distribution -the distribution that ended up happening was 5 yen per share + 2 extra yen as a commemorative bonus for Ys VIII and the 35th Anniversary.
  • Nomination of the 4 Company Directors – All 4 company directors were reappointed into their positions.
  • Nominations of the 2 Company Auditors – Both company auditors were reappointed for their positions.

Afterward, at 2:32pm, the meeting concluded.

[ Suzuki Online blog ]
[ hr_crf2 blog ]

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