Marvelous Entertainment announced its financial results for the nine months ended on December 31, 2021, and they're pretty poor.
According to the documents provided, sales for the whole company were 21,760 million yen, up 18.2% year-on-year, but operating income was 1,390 million yen (down 56.2% year-on-year).
Looking at the Digital Contents Business, which focuses on video games, sales were 12,137 million yen (up 18.2% year-on-year) but the segment actually recorded a 300 million yen loss compared to the 1,635 million yen profit in the same period last year.
In the home video games segment, following the disappointing sales of Loop8: Summer of Gods earlier this year, sales of newer games like Fashion Dreamer and Silent Hope were significantly lower than expected, failing to recoup development costs and resulting in the operating loss.
This is despite the fact that Fashion Dreamer, released exclusively for Nintendo Switch, sold close to 500,000 units worldwide. At this point, I'm not exactly sure what Marvelous expected from it. Incidentally, if you'd like to grab yourself a copy, you can find it on Amazon.
Contributing to the increase in sales was the continued performance of Story Of Seasons: A Wonderful Life, which was released in the previous fiscal year and is continuing to do well.
Dolphin Wave by the developers of Senran Kagura continues to perform well, even if it suffered from an inevitable decline in sales compared to the same period last year which included its strong launch quarter. Older mobile games like Shinobi Master Senran Kagura: New Link and more also provided a steady contribution to earnings, albeit their sales have declined over the years.
As a result, Marvelous revised its full-year forecast for the fiscal year ending on March 31. Sales have been revised upward from 27,000 million yen to 28,500 million yen, but operating profit has been revised downward from 3,500 million yen to 2,000 million yen, a 42.9% cut.
To take responsibility for the underperformance, which is being "taken seriously," Marvelous' executives are taking a pay cut. Specifically, 30% for the CEO and 12% for Directors, from February to April 2024.
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