We have countless synergies within our group and we have verbalized them in detail. Below is the latest table of our group synergies that we use in our internal management meetings.

This is just an example for your reference.

For example, although amusement arcades and karaoke seem to be different businesses and customer segments, the concept of opening new stores is the same, and the amount of information on available tenants is critical. While we used to collect tenant information as an operator of about 330 amusement arcades, the addition of about 360 karaoke premises has improved our store development capabilities by integrating store development with tenant information on the karaoke side.

This has also made it possible that it is possible to open an amusement arcade even if it is unprofitable to open karaoke (or vice versa). Even among existing stores, we have changed a store which is too big only for karaoke to an amusement arcade and improved the profitability. In areas where store locations overlap, we attract new customers by distributing discount coupons for both.

Fukuya, which designs prizes, is located on the upstream of value chain of amusement arcades. Its volume of transactions has dramatically increased not only because of the expansion of GiGO’s operation, but also the creation of huge demand for Japanese Kawaii products in North America through Kiddleton and NEN as GENDA. There is a big effect of increasing the stock value just to take in the profits by making it consolidated, which would flow away outside if we did not conduct the M&A. Besides, we share the information on sales of each product in a timely manner and this makes us possible to make minor changes. The same effect has arisen for Ares, too, which has a function as a trading company of prizes.

As for Lemonade and Kleiner, the sales functions have dramatically improved, that was difficult when they stood alone. By joining in the group, products of Lemonade and Kleiner are distributed on the grand menus of all 360 Karaoke BanBan premises, and they have opened new stores in existing amusement arcades, too. In addition, it is possible for them to share the opportunity when we open a new amusement arcade in a shopping center.

Furthermore, since ONTSU, which is a distributor of karaoke equipment, joined us, the volume of business with Karaoke BanBan has increased and this has enabled our group to take in the profits which were supposed to flow away outside of the company. In addition, it is now possible to sell Kleiner for the night market which is ONTSU’s customer base. C’traum, which sells Kleiner, did not have any employee or sales function before the M&A. But now it is possible to access to sales channels on a number of fronts without no additional cost.

GAGA, which is a movie distribution company, has also created countless cross-selling synergies that were difficult to achieve on its own, such as extensive advertising of its movies on digital signage at GiGO Flagship Store facing Ikebukuro Sunshine 60 Street, staff of amusement arcades wearing a T-shirt with movie ads, and offering rooms with movie characters and food and beverages at karaoke etc.

These are just a few of the verbalized synergies, but the reason for the various synergies is that although the entertainment industry seems to be broad, from a broad perspective, it is connected from the upstream “Contents” to the downstream “Platform” from the customers’ (entertainment fans’) perspective. Based on the structure of entertainment industry, which is “IP→platform→fans,” there are countless cross-selling synergies.

Of course, there are synergies from roll-up M&A of amusement arcades. However, there is much room to create synergies in M&A focused on the entertainment field which is contiguous, more than in M&A limited to amusement arcades. From these perspectives above, we believe that the formation of an entertainment conglomerate through GENDA’s unique Entertainment Ecosystem has many advantages.