Mynet Inc.

In the Secondary Domain of the Game Business, maintaining and expanding business scale depends on the continuous acquisition (sourcing) of new titles that meet investment criteria, and there is a risk that cash-flow generating capacity may decline if such acquisitions stall. As a risk diversification measure, the Company is expanding its talent matching and development solutions businesses, but there is a possibility that the expected diversification effect may not be achieved due to intensifying competition for specialized talent and fluctuations in client companies' development budgets.

The Group has adopted a business model of actively acquiring game titles and operating them over the long term, and if the profitability of acquired titles declines, impairment processing of held assets may become necessary, potentially having a significant impact on business results and financial condition. Intensifying competition and user attrition accompanying market maturation could be major factors worsening title profitability. As countermeasures, the Group is promoting efficient operations and stricter investment criteria, but there are limits to responding to sudden changes in the external environment.

The Group is seeking to establish a position in the fantasy sports market centered on 'J.LEAGUE FANTASY CARD,' released in January 2026, but if the expansion of awareness of this market in Japan falls short of expectations, the recovery of upfront investment may be delayed, potentially adversely affecting consolidated business results. There is also a risk that changes in contractual terms with sports organizations, etc. (such as changes to license fees) could disrupt the monetization plan. The business is currently at a transition stage from the upfront investment phase to the monetization phase, and the level of uncertainty is high.

The BtoB Solutions Domain (Strategic Consulting Service and Kitting BPO Service), centered on Digon Corporation, depends for its growth on client companies' appetite for DX investment, and there is a risk that the pace of business expansion may be constrained if IT budget cuts due to worsening economic conditions or intensifying competition occur. Since building up recurring revenue is a pillar of the growth strategy, failure to achieve plans would also affect the achievement of the medium-term vision 'GATE26.'

There is a risk of competition arising or intensifying with existing companies and new entrants offering similar services in each of the Secondary Domain, Talent Matching / Development Solutions Domain, Sports DX, and BtoB Solutions domains. The Group is seeking differentiation through its proprietary know-how and networks, but if intensifying competition leads to price pressure or higher customer acquisition costs, business results could be adversely affected.

The Group's business foundation depends on contracts with partners such as platform operators, game makers, and sports organizations, and if changes in partners' policies or business strategies lead to changes in fee rates or the continuation or discontinuation of license agreements, business results and business development could be affected. The Group has adopted a policy of avoiding excessive dependence on any specific partner through management that considers portfolio balance.

In the smartphone game industry, the pace of technological innovation is rapid, with new services being created one after another. If unforeseen technological innovation occurs, the competitiveness of the Group's existing business model and held titles could decline rapidly, potentially affecting business results and business development. The Group is working to build a system capable of responding swiftly to changes in business structure accompanying technological innovation, but depending on the speed of change, there is a risk that its response could lag behind.

In expanding the Sports Content Domain and the Cross-Industry Business (Strategic Consulting Service, Kitting BPO Service, etc.), additional expenditures such as system investment and advertising costs may arise, potentially lowering profit margins. If the buildup of recurring revenue and establishment in the market do not proceed as planned, there is a risk that the investment cannot be recovered, adversely affecting business results. This also directly affects the achievement of the business forecast for the fiscal year ending December 2026, the final year of the medium-term vision 'GATE26.'

In expanding the talent matching and development solutions businesses, competition for specialized talent in the labor market is intensifying, and if the necessary talent cannot be secured in a timely manner and at an appropriate cost, service provision capacity may be constrained, potentially undermining the risk diversification effect. In the talent market requiring the specialized expertise unique to the game industry, competition with major companies is also expected, and rising recruitment costs and talent outflow could affect business results.

In the fiscal year ending December 2026, the final year of the medium-term vision 'GATE26,' if the uncertainties in each business domain (Secondary, Sports Content, BtoB Solutions) manifest in combination, it may become difficult to achieve the Group's overall consolidated business forecast. If delays in strategy execution coincide with rapid changes in the external environment, there is a risk that, despite efforts to optimize the business portfolio, the realization of the basic policy of a leap in growth potential could be hindered.