Frequently Asked Questions

We record licensing income when our produced animation projects are sold overseas, distributed domestically in Japan, or licensed for merchandise and other uses.
For more details, please refer to the “Business Characteristics” page.

Our business involves large-scale projects, each worth hundreds of millions of yen, so the financial results fluctuate significantly depending on whether the sales are recorded in the fiscal period.
For example, if the report of licensing income from the production committee is delayed by just one day from the end of our fiscal period, the sales and profits for that period can change by hundreds of millions of yen.
We hope you will focus on the Group’s medium- to long-term growth rather than short-term fluctuations in financial results for each fiscal period.

It primarily refers to the personnel expenses for employees and creators.
Employee personnel expenses increase every period, and the compensation for creators is also on an upward trend. Therefore, the cost of sales in the Film Production Business is on an increasing trend.

This is because the timing at which amortization expenses for investments in projects, which are recorded as cost of licensing income, are recognized in the statement of profit or loss may differ from the period during which such amortization expenses are deductible for tax purposes. Additionally, expenses such as provisions for loss on orders received are recognized for tax purposes at different times than when they are recorded in the statement of profit or loss.

In the Film Production Business, the setting of gross profit margins will vary depending on the commissioned project.
In the Licensing Business, the gross profit margin fluctuates each period because the cost of licensing income varies significantly depending on the timing of the amortization of the investment in projects.
Furthermore, the IG Port Group has a policy of partially returning contingency fees and investment dividends obtained from hit projects to employees and creators.
This is paid in the form of a year-end bonus, but since it is recorded as a cost of sales in the Film Production Business, the gross profit margin of the Film Production Business may significantly decrease at the end of the period when hit projects are produced.

In our case, we often participate in the production committee of the commissioned projects. Therefore, our producers are often involved from the planning stage of the project, and subsequently, we frequently receive commissions for film projects from the established production committee.

A production committee refers to a business entity where multiple companies jointly invest the necessary funds for production and conduct business operations in their respective areas of expertise for the produced work.
Committees with an investment ratio of 20% or more but 50% or less are recorded as equity-method affiliates in the securities report.
Committees with an investment ratio exceeding 50% are treated as consolidated subsidiaries in accounting.
(The profits and losses of the production committee are fully consolidated, and the portion invested by other companies is deducted from the final profit and loss as a minority interest.)
This is a general principle and may change due to other factors.

• “Production” refers to the physical creation of the animation work.
  “Manufacturing” refers to investing in the project and developing the business.

It refers to the production orders for illustrations related to animation and income from in-house merchandise sales.

Web magazines (MAGCOMI and MAGKAN) operated by MAG Garden Corporation offer the first episode and several episodes, including the latest one, for free. Additionally, e-book comics are sold through electronic distributors and various e-book stores.

We do not disclose the investment ratio for each project. However, for projects with an investment ratio exceeding 20%, we disclose the investment ratio in the securities report.

Decisions are made based on the profitability of the investment in the project and the rights management opportunities obtained.

The figures reported by the media are all sales figures, not profits.
The amount distributed to investors, such as the production committee, is the profit after deducting costs and expenses incurred from the sales.
For example, in the case of box office revenue, about half of the revenue is taken by the theaters. The remaining amount, after deducting the distributor’s fee, is distributed according to the investment ratio of the production committee.
(This may differ depending on the contract.)

The evaluation of animation on the internet does not necessarily align with its profitability.
There are many cases where IPs with high online buzz have low profitability. Conversely, there are cases where IPs not highly rated online have high profitability.
We analyze trends in licensing income over the past 20 years and use this analysis for investment decisions.

We calculate it for each major project and further break it down by genre of sales (such as overseas sales, distribution, merchandising, and sales promotion).
The production committees for the major ongoing projects are held regularly.
Based on the sales reports from the production committee, we calculate contingency fees and investment distributions according to contracts and formulate budgets.
For past projects, we formulate budgets based on the current trend lines of the projects.
Therefore, if the production committee of a past project sells the project in some form, unexpected licensing income will occur, resulting in an upward revision of the plan.
The main factor for the recent upward revision in performance is often the increase in licensing income from past projects compared to the plan.

Payments from overseas related to royalties are often contracted in US dollars, and when the exchange rate shifts to a weaker yen, there is a tendency for licensing income from overseas to increase.
However, in the long term, it is expected to negatively impact profits due to increased production costs in the Film Production Business, such as rising personnel expenses and equipment costs due to higher import prices.

It is listed in the “Information by geographic area” section under “Related Information” in the securities report. However, sales of film projects overseas conducted through Japanese production committees are not included here, so the actual overseas sales ratio is higher than what is recorded in the securities report.

For anime merchandise, goods manufacturers apply for a license from the anime’s production committee and then proceed with manufacturing and sales.
The goods manufacturers pay a specified royalty (licensing fee) to the production committee as compensation.
We receive a portion of the contingency fees and revenue sharing income from these royalties from the production committee.

• General anime merchandise is manufactured by other companies, and the sales revenue from those goods is not recorded by us.

Our own merchandise sold through the IG Port ONLINE STORE is a joint venture between us and a partner company. As a result, the sales revenue from goods sold on this e-commerce site and others is recorded by us.

When the original books of an anime are sold, we do not receive any income.
However, if a comic published by MAG Garden Corporation, which conducts our Publishing Business, is adapted into a video, publishing business income is recorded from the sales of the original books. For the “Explanation of Frequently Asked Questions from Investors” included in past financial results presentation materials, please refer to the following.