Quoted By:
20. Our cost of sales is roughly the same as our competitors at approximately 16.2 billion yen, but our selling and general administrative expenses are 8.45 billion yen, significantly higher than our competitors' 2.85 billion yen. This difference is likely to affect our profit margins, but given that our competitors have a larger number of talents, I would like to know the reasons for this and how you plan to translate this into sales and profits in the future.
A:
While a simple comparison is not possible due to differences in business structures, we recognize that our short-term profit margins are inferior to those of our competitors because we are actively investing in future growth, such as overseas business development and research and development related to expressive technologies.
On the other hand, we have been able to build a brand with multiple talents who have an extremely strong ability to attract customers on their own, and we have used the brand as a base to achieve global expansion and diversified service operations. By providing high-quality content to our fan base, we expect the proportion of merchandising, licensing, and tie-ups in our sales mix to increase, and we expect profit margins to improve in new business areas such as trading card games. While profit levels will be held down to a certain extent this fiscal year due to upfront investments, we expect profitability to improve going forward.
