Silicon Studio Corporation

Business Details

Provides solutions leveraging real-time CG technology for the entertainment industry, including games and video, as well as for a wide range of industries such as automotive, architecture, and manufacturing. Consists of three categories: middleware development and sales, contract development (game engine application, digital twin construction support, AI/machine learning), and Online Solutions (server network construction, operation, and monitoring). Strengthened its business foundation through the absorption-type merger of its wholly owned subsidiary Ignis Imageworks Co., Ltd. in December 2024. The Physical AI Simulation Platform Business has also begun full-scale operations.

Recent Overview

Significant decrease in revenue and profit due to loss recognition on a 3DCG video production project and the end of a major project

During the H1 cumulative period of FY2026 (ending November 2026) (December 2025 to May 2026), the company was unable to secure a replacement project after the completion of a major contract development project. Online Solutions also saw a revenue decline due to the termination of services by a major legacy customer. The 3DCG video production project ordered in the prior fiscal year had its revenue recorded in a lump sum in the second half, and could not be recorded in the interim period; a reassessment of cost estimates for this project resulted in a provision for loss on order backlog of ¥75 million being recorded as cost of sales. Due to the resulting labor input exceeding initial expectations from delays, resources became constrained, leading to a loss of opportunities to secure new orders. As a result, revenue decreased significantly to ¥1,119 million (down 18.6% year on year), and segment profit fell sharply to ¥0 million (down 99.7% year on year). On the other hand, inquiries regarding visualization technology from industrial sectors are increasing, and the company continues efforts to expand its customer base, including the full-scale launch of the Physical AI Simulation Platform Business.

Key Products

Growth Drivers

• Increasing inquiries for virtual space simulation environment construction using game engines from industrial sectors such as automotive, civil engineering/construction, and manufacturing
• Development of new revenue sources through the full-scale launch of the Physical AI Simulation Platform Business
• Efforts to expand the customer base through website enhancement, analysis-based initiatives, and expansion of the inside sales structure
• Customer development in new industrial fields expected to see increased demand for real-time 3D graphics utilization, such as aerospace, defense, medical, and security
• Strengthening of the business foundation and concentration of management resources through the absorption-type merger of wholly owned subsidiary Ignis Imageworks Co., Ltd. in December 2024
• Continuous enhancement of middleware products such as new versions of YEBIS

Risks

• Risk of continued stagnation in inquiries for development support from the entertainment industry, the main customer base
• Risk of recording provisions for loss on order backlog due to fluctuations in cost estimates for ordered projects (¥75 million recorded in the H1 cumulative period of FY2026 ending November 2026, with a period-end balance of ¥132 million)
• Uncertainty in securing replacement projects after the completion of major large-scale projects, and risk of losing opportunities to secure new orders
• Risk of resource shortages due to delays in 3DCG video production projects and revenue concentration in the second half
• Risk of revenue decline in Online Solutions due to the termination of services by major legacy customers
• Risk of delayed response to rapid technological innovation in game engines, AI, and other areas
• Risk of revenue concentration on Nintendo Co., Ltd. (revenue of ¥734 million in FY2025 ending November 2025, 17.1% of total revenue)