Tokyo Communications Group,Inc.

Business Details

Operates free smartphone game apps (casual and hyper-casual) and the image-maker service "Picrew." The business model provides in-app advertising space to advertisers via ad networks, earning advertising revenue based on user clicks and other metrics. The segment promotes a "co-creation development model" with external partners, pursuing synergies in development and operations. It is the core segment, accounting for approximately 57% of the Group's consolidated revenue.

Recent Overview

Revenue increased 1.0% year on year, but segment profit decreased 4.4%

In Q1 FY2026 (ending December 2026), Media Business revenue was ¥906 million (up 1.0% year on year), and segment profit was ¥99 million (down 4.4% year on year). The number of apps operated decreased to 240 (down from 245 in the same period of the prior year). While casual and hyper-casual game apps drove multiple titles to top rankings, Picrew maintained stable performance. The new service "Piclab" began development of the "Irasutoya Maker." The company continues to strengthen its collaborative framework through the co-creation development model.

Key Products

Growth Drivers

• Improved reproducibility in generating hit titles by concentrating management resources on game genres with a high probability of success
• More efficient development and operating costs through the promotion of the "co-creation development model" with external partners
• Expansion of advertising revenue through titles achieving top rankings on the App Store and Google Play free game charts
• Diversification of revenue through the stable revenue base of the image-maker service "Picrew" and the new service "Piclab"
• Continued growth of the internet advertising market (Japan's internet advertising spend rose 10.8% year on year in 2025)
• Expanded overseas market presence (U.S., Singapore, etc.) through language-independent apps

Risks

• High dependence on hit titles for revenue, creating risk of revenue volatility from title obsolescence or ranking declines
• Impact on revenue from unit-price fluctuations and algorithm changes at major advertising platforms such as AppLovin and Google
• Intensifying competition in the smartphone game market and rising development and marketing costs for new titles
• Foreign exchange risk in overseas expansion and risk from changes in regulations and platform policies in various countries
• Impairment risk related to goodwill, trademark rights, and customer-related assets (intangible fixed asset balances remain large)