Management Principles
Business Risks

This section explains BCP countermeasures and matters that may significantly impact investors' decisions.

Of the matters concerned with business conditions and accounting conditions as stated in the securities report, the list below mentions the major risks that could potentially have a significant impact on the financial status, operation results, and cash flow situation of consolidated companies. Please note that descriptions concerning the future within the text are based on judgments of our company's Group made at the end of the then-current consolidated fiscal year.

While we acknowledge that these risks could potentially occur, we strive to prevent their occurrence and, if they do occur, to handle them appropriately; however, please note that investment decisions concerning our company shall only be made after carefully reading and considering the descriptions written herein as well as in any other sections. Please also note that the descriptions below do not cover all of the risks related to investment in our company.

Types of Risks

(1) Regarding changes in the market environment

In the video game industry, content providing platforms are becoming more diverse and capable, and technological innovation and user preferences are changing quickly. As such, new products and services are constantly being introduced to respond to such changes. Furthermore, in recent years competition with other entertainment industries such as the Internet has intensified. The policy of our company's Group is to differentiate itself from other companies and ensure stable profits by flexibly responding to rapid technological innovation, as well as by timely developing and selling unique, high-quality content. However, if our response to changes in the market environment is not adequate, it could potentially impact the operating results and business development of our company's Group.

(2) Regarding short-term fluctuations in operating results due to product release timing

Our company's Group is committed to achieving performance targets on an annual basis by creating new titles to reduce reliance on specific titles, as well as by thoroughly managing development schedules that are focused on the most suitable release timing for products. However, due to circumstances such as natural disasters, market trends, or unavoidable changes in development schedules that could possibly delay the release timing of products, the operating results and financial condition of our company's Group could potentially be affected.

(3) Regarding overseas business development

While our company's Group actively continues to expand overseas business, when risks occur due to changes, for example, in the laws, political and social conditions, or exchange rates of each country, the operating results and financial condition of our company's Group could potentially be affected.

(4) Regarding management of personal information

Our company's Group obtains personal information about users, and takes ample care in managing it. However, if issues such as leakage of information occur, the operating results and financial condition of our company's Group could potentially be affected.

(5) Regarding intellectual property rights

Our company's Group is committed to protecting the intellectual property rights we possess from being infringed upon by others, and also takes ample care to ensure our products and services do not infringe on the intellectual property rights of others. However, if any doubts or disputes concerned with potential infringement occur with a third party, the operating results and financial condition of our company's Group could potentially be affected.

(6) Regarding legal restrictions

Our amusement facility operation business are regulated by the "Businesses Affecting Public Morals Regulation Law" as well as by related government ordinances and rules. If, in the future, these laws are materially altered or abolished, or if new laws are established or enforced, the operating results and financial condition of our company's Group could potentially be affected.

(7) Regarding possession of securities

Our company's Group possesses cash and highly liquid securities in order to manage investments in development and business for our entertainment business or other businesses. These assets are invested in both domestic and foreign shares and bonds, for example, in order to perform safe and efficient fund management. While decisions relating to the fund management and the setup of portfolios are made in accordance with the company's rules that are subject to internal control in order to manage risks, in the event of sudden fluctuations in, for example, shares or bond markets, exchange rates, or economic conditions, such changes could potentially result in impairment or loss in valuation of possessed securities, which could have an impact on the operating results and financial condition of our company's Group.

(8) Risks concerned with information systems

Although our company's Group strives to properly manage and efficiently operate the information systems required for our business operations, in the case of events that cause the functions of information systems to cease, such as unexpected computer viruses, cyber attacks, software or hardware failures, or disasters, the business results of our company's Group may be affected.

BCP Countermeasures

BCP Countermeasures

In response to all types of management crisis risks, such as major disasters, outbreaks of serious infectious diseases, or terrorist attacks that could jeopardize business continuity, our company's Group has established a BCP, which is a set of internal regulations that focuses on the procedural flow for determining company policies, including the temporary chain of command, organizational structure, and Management Crisis Response Headquarters in the event of a management crisis.
In particular, with regard to outbreaks of serious infectious diseases, the company has established internal regulations that also serve as guidelines for each overseas company based on our efforts, innovations, and knowledge about preventing the spread of such infectious diseases, in order to be able to flexibly adapt to the laws and government policies of each country.
With regard to the risk of disasters, in consideration of the risk of executives and employees not being able to return home due to the occurrence of a major earthquake, for example, we have also established a plan in which each business location has disaster reserves, including food and blankets, and the quantity and lists of such items shall be reviewed on a regular basis.