The strong yen will have a positive effect because we have not yet hedged our M&A financing settlement, which is a large amount of payment in U.S. dollar, for PLAYER ONE as of today (we plan to implement a forward exchange contract as the closing becomes more definite).

The M&A consideration is $170 million and is expected to be executed upon closing in or about July 2025.

The PLAYER ONE project has been in progress since late 2024, and compared to the exchange rate at the end of the year when negotiations were in full swing (around 158 yen to the dollar), the current exchange rate level (around 142 yen to the dollar) would reduce the yen-based expenditure by about -2.7 billion yen on a simple conversion.

On the other hand, PLAYER ONE’s U.S. dollar-denominated cash flow will be partially depreciated when converted to yen. However, PLAYER ONE’s borrowings are denominated in Japanese yen, and we plan to repay the borrowings using the ample yen-denominated cash flow held by the entire group. Therefore, the impact from the exchange rate will not interfere with our financial operation. In addition, other North American operations, including Kiddleton and NEN, will also be affected by the depreciation of a portion of their cash flow due to the strong yen. However, on the cost side, there are also benefits such as lower import costs for prizes and other items. Therefore, the impact on the P/L statement is limited at this time.