Summary of North America Business Briefing

Current Performance and Outlook

The sales slowdown in the North America business is analyzed to be mainly due to operational deficiencies stemming from system integration rather than economic or competitive impacts. The number of mini locations performing ideally has surpassed the previous year, demonstrating confidence in service demand. The primary factor behind the stock price decline is perceived to be the delayed launch of the US operations. Restoring performance swiftly is set as the top priority.

Operational Improvements and PMI Initiatives

The company has introduced the 'Kiddleton Force' operation app tailored for unmanned stores in North America, reducing manual cash count and bank deposit efforts, with a trend of recovery in staff store patrol frequency. As part of PMI, store replacements of existing game machines, switching to larger prizes, and adding add-on equipment at game centers have been implemented. Adding new equipment in existing stores contributes to increased sales and customer attraction.

Store Expansion and Organizational Management

Expansion into major cinema complexes and restaurant chains is accelerating. Withdrawal from existing locations inside Walmart is planned to be carried out over several years, with new stores being opened in tenants’ areas that are 5 to 10 times larger than traditional small sections. On the organizational front, strengthening governance through increased Japanese personnel is ongoing, along with negotiations on cost efficiencies and lower commission rates. Additionally, maintaining entry barriers through regulatory compliance and addressing inflation and tariffs are also considered.