A Look at Cover Corp's Financial Results and Expansion Plans in 2023

COVER Corporation, the company behind the operations of VTuber agency Hololive Production, released its transcript of the Financial Results Briefing held May 12, covering the fiscal year which ended last March.

• Cover reports a significant increase in sales and income—Revenue grew by 49.7% (to 20.451 million yen from last year), Operating Profit grew 84.2% (to 3.417 million yen) and Net Profit increased by 101.6% (2.508 million yen).
• The company believes that its growth in the past fiscal year is due to changes in how people consume entertainment, as well as the popularity of VTuber music and short videos.
• Recent deals with major record labels helped Hoshimachi Suisei and Mori Calliope get recognized further.
• In addition, the expansion of merchandising and licensing/collaboration deals resulted in a significant increase in revenue for each VTuber talent in the second half of the year.

What led to Cover's Growth in the fiscal year?

The transcript states that the recently-held Hololive Super Expo 4th. Fes and Super Expo contributed to growth in the 4th quarter, reflective of past reports.

• Around 15,000 visitors flocked to the Makuhari Messe International Exhibition Hall to attend the Hololive 4th Fes. Our Bright Parade concert, while Hololive Super Expo 2023 attracted around 30,000 visitors on-site, contributing approximately 1.8 billion yen (around $13 million).

What are the challenges Cover is currently tackling?

Currently, the company is facing merchandise production challenges head-on by expanding its inventory of mid-price range products, as well as developing new products to reach a wider range of consumers throughout the year through its retail outlets and other touchpoints.

• Cover has doubled down on producing merchandise of its intellectual properties, showcasing Hololive Friends with U plush toys.
• Their brand and IP licensing collaborations with apparel makers and game developers target local and international fans—examples shown are their deals with OMOCAT for Hololive English and Yo-kai Watch.
• It should be noted that Cover participated in this year's Licensing Expo in Las Vegas held last month.

Cover Corp's Expansion Plans

Cover's medium and long-term strategy for growth involves a three-step roadmap:

• IP and Fan Base Development (Achieved)
• Commerce Development and Upfront Investments (In Progress)
• Metaverse Development (Under development, with its in-house Holoearth game scheduled to launch next year)

According to Cover, it gradually expands its market outside of VTuber fans by developing their business in stages: "We consider that we are coming to replace a part of the global traditional anime market by developing commerce globally with our anime-style VTubers and IP instead."

It is also revealed that they are set to debut new VTubers in Japan and overseas, and continue spreading the word about Hololive to international audiences through Hololive Meet.

What's making Cover busy at the moment?

Hololive's parent company is currently dealing with several collaborations, such as:

• Its deal with Universal Music Group for the Blue Journey music project;
• The partnership with Yomiuri Shimbun Holdings—such as Hololive City and Hololive Summer Fair at Tokyo Dome City, Hololive Pride with the Yomiuri Giants baseball team, and Hololive Airlines with Yomiuri Travel Service;
• Concerts such as the upcoming Hololive 5th Generation live concert Twinkle 4 you and the successfully-held HoloEN concert Connect the World, as well as other Hololive Meet events.

These, in addition to the long-term investments in progress, such as:

• Its new motion capture studio which has been featured in the media and is now currently in operation;
• Metaverse services such as Holoearth;
• and an app for fans called Holoplus, which is under development and is set to be released this Summer—currently, the app has around 11,000 closed beta testers.

The recent briefing made rounds online as some questions from investors have been revealed prior to the release of the transcript, sparking discussion among Hololive fans.

Among the questions included in the transcript are those regarding merchandise production and sales growth, male VTubers under the Holostars brand and new VTuber debut plans, focus on short videos, as well as the view of the market's environment in general.

Source: Financial Results for FY2023/3 (PDF)
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