CAVE Interactive CO.,LTD.

Business Details

A game business segment operated by Cave Co., Ltd. and DeNGE Co., Ltd. In addition to the development, operation, and contract development of smartphone games, the segment also engages in the planning, production, sale, and licensing of derivative works. Key titles include "Gothic wa Mahou Otome ~Sassato Keiyaku Shinasai!~," "Touhou Gensou Eclipse," "Monster Strike" (operated by DeNGE), and "Kingdom Ran -Tenka Touitsu e no Michi-." Major customers are MIXI (54.3% of revenue), Apple Inc. (18.6%), and Google LLC (10.7%), with revenue from platform-based billing accounting for the majority of sales.

Recent Overview

Segment fell into a loss due to large-scale impairment charges, and software assets were substantially reduced

In the Game Business for FY2026 (ending March 2026), revenue was ¥11,021 million (down 14.1% year-on-year) and the segment posted a loss of ¥626 million (versus segment profit of ¥1,115 million in the prior period), a significant deterioration. An impairment loss of ¥2,653 million was recorded due to the impairment treatment of "OUTRANKERS" and other titles, and the balance of software and software in progress was sharply reduced from ¥2,201 million in the prior period to ¥30 million. "Monster Strike," operated by consolidated subsidiary DeNGE, continued to perform well and contributed to revenue. Development of the new Steam title "Shinyaku Dodonpachi Daifukkatsu" is underway, with revenue contribution expected from the next fiscal period onward.

Key Products

Growth Drivers

• Continued stable revenue through popular IP collaboration events for "Monster Strike" at consolidated subsidiary DeNGE
• Enhanced user engagement and retention of existing users through 11th anniversary initiatives and a fan meeting for "Gothic wa Mahou Otome"
• Increased brand awareness through the game system overhaul update and real-world event participation for "Touhou Gensou Eclipse"
• Strengthened user engagement and maintenance of a long-term revenue base through the 8th anniversary large-scale event for "Kingdom Ran -Tenka Touitsu e no Michi-"
• Acquisition of a new revenue source through the release of the new Steam title "Shinyaku Dodonpachi Daifukkatsu" (first title in the Refine Project)
• Limited additional impairment risk due to the substantial reduction of software assets, with normalization toward a profitable structure expected
• Cost reductions and operational efficiency improvements across the group through AI adoption

Risks

• High dependence on revenue from MIXI (54.3%), creating concentration risk on a single customer
• Uncertainty regarding the monetization of the new title "Shinyaku Dodonpachi Daifukkatsu" on the Steam platform
• Risk of intensifying competition in the smartphone game market and natural decline of existing titles
• Risk of additional valuation losses on remaining software in progress (¥29 million) and investment securities/capital contributions
• Foreign exchange risk in global expansion and uncertainty regarding penetration of overseas markets
• Group performance's dependence on the revenue trends of "Monster Strike," the flagship title of consolidated subsidiary DeNGE

Business Details

A business segment centered on Success Plus Co., Ltd. (Contract Development Business and Licensing Business). Due to a challenging operating environment caused by the diversification of streaming platforms and changes in viewing trends, all shares of capable Co., Ltd. were transferred during the period, removing it from consolidation. The segment provides video streaming management and support, SNS advertising, and video production and planning. Success Plus has continued to generate profit levels exceeding goodwill amortization expenses, and is also advancing entry into the Licensing Business in overseas markets.

Recent Overview

Removed from consolidation following the transfer of all shares of capable, with Success Plus becoming the core of the business

In response to a challenging operating environment caused by the diversification of streaming platforms and changes in viewing trends, the company transferred all shares of capable Co., Ltd. and removed it from consolidation (one company excluded) from the standpoint of selecting and concentrating management resources. As a result, revenue was ¥981 million (down 14.2% year-on-year), while segment profit remained largely flat at ¥18 million (down 1.5% year-on-year). Success Plus Co., Ltd. has continued to generate profit levels exceeding goodwill amortization expenses, securing stable revenue centered on the Contract Development Business.

Key Products

Growth Drivers

• Continued stable revenue base through the Contract Development Business of Success Plus Co., Ltd.
• Expansion of revenue in overseas markets through Success Plus Co., Ltd.'s entry into the Licensing Business
• Improved profitability through the resolution of unprofitable businesses via the transfer of capable and the concentration of management resources
• Continued securing of stable segment profit through profit levels exceeding goodwill amortization expenses

Risks

• Risk of impairment of goodwill related to Success Plus Co., Ltd. (period-end balance of ¥120 million)
• Risk of intensifying competition in the video streaming market and rising costs of acquiring streamers
• Uncertainty regarding revenue generation in the Licensing Business and overseas expansion
• Limited scope for revenue growth due to the reduced segment scale following the transfer of capable
• Risk of customer concentration due to increasing dependence on the Contract Development Business