coly Inc.

Business Details

Under the corporate philosophy of "More Fun," the company's core business is the planning, development, and operation of mobile online games based on in-house developed original IP, complemented by media businesses including merchandise sales, IP licensing, food & beverage, events, stage plays, and anime. The primary target is female users, and the company provides IP content emphasizing character appeal and storytelling across both digital and physical channels. Over the medium to long term, the company has adopted a policy of pursuing full-scale expansion into global markets.

Recent Overview

Net sales increased slightly, but operating loss expanded significantly due to upfront development costs and rising cost of sales

Net sales for the first quarter of FY2027 (ending January 2027) (February to April 2026) came to ¥1,269 million, up only 1.3% year on year, a marginal increase. In the mobile online game business, revenue declined as the boost from the TV anime broadcast of "Mahoutsukai no Yakusoku" lapsed, while the media business expanded to a scale comparable to the mobile online game business and helped support overall results. However, selling, general and administrative expenses rose to ¥881 million (from ¥712 million in the same period of the prior year) due to upfront development costs for new development projects, and cost of sales also rose to ¥1,038 million (from ¥771 million in the same period of the prior year) due to increased outsourcing costs and fees associated with the growth of the media business as well as expenses in preparation for game anniversary initiatives. As a result, operating loss expanded significantly to ¥650 million (from ¥230 million in the same period of the prior year). The full-year earnings forecast remains undisclosed.

Key Products

Growth Drivers

• The media business (merchandise, stage plays, collaboration cafés, etc.) has expanded to a scale comparable to the mobile online game business, with a renewal and expansion of the floor space at "coly more! Ikebukuro PARCO"
• Usage of "coly ID" has remained solid, with revenue via the company's proprietary channel that avoids platform fees continuing to account for a large proportion of sales
• New and returning users are trending upward as preparations for "Break My Case" 2nd anniversary initiatives progress
• Various "Stand My Heroes" 10th anniversary initiatives are being rolled out both in-game and off-game to enhance the value of the IP
• Long-term cultivation of IP value through media-mix expansion (merchandise, stage plays, anime, events) originating from the company's own original IP
• Promotion of full-scale expansion into global markets over the medium to long term, along with the creation of new IP and development of new games

Risks

• A challenging market environment amid the rise of high-quality mobile games by overseas developers and intensifying competition
• Selling, general and administrative expenses increased significantly year on year (by ¥881 million) due to upfront development costs for new development projects, widening the operating loss
• Risk of fluctuations in revenue from existing titles as the boost from major promotions such as TV anime lapses
• Dependence on platforms such as Apple and Google and the risk of fee fluctuations (partially mitigated by coly ID)
• Rapid changes in the competitive environment of the mobile online game market, making it difficult to forecast sales trends to the extent that the full-year earnings forecast for FY2027 (ending January 2027) remains undisclosed
• Risk of rising cost of sales due to increased outsourcing costs and various fees associated with the expansion of the media business
• Retained earnings have declined to ¥835 million following the recording of a quarterly net loss of ¥642 million, raising concerns about the impact on the financial base if losses continue