Q&A - 9th Ordinary General Meeting of Shareholders

 This document contains a series of questions and answers from a shareholder meeting. The content is translated from Japanese to English below. This translation was made possible through Google's Gemini AI and should be taken "as-is." Any errors in translation are not the fault of Marko Yamashita, his channel or his entity on any social media platforms.

To Our Shareholders,

Subject: Transcript - Q&A from the 9th Ordinary General Meeting of Shareholders

August 12, 2025

We would like to express our sincere gratitude for your continued support. We would like to report on the summary of the Q&A session and the answers to questions submitted in advance at the 9th Ordinary General Meeting of Shareholders as follows.

1. Answers to Questions Submitted in Advance

Question 1:

Regarding "partial revision of the articles of incorporation," please explain the benefits of adding "production of record masters and music recordings" to the articles of incorporation for your company's business.

Answer 1:

The purpose of this revision to the articles of incorporation is not to immediately change the revenue structure related to the music business or lead to an immediate increase in revenue, but to resolve practical restrictions on music business activities.

Question 2:

Regarding "Proposal No. 3: Decision on the amount of remuneration, etc. for directors," please explain the reason for seeking an increase in remuneration.

Answer 2:

From our company's perspective, this increase is not directly linked to an increase in the current directors' remuneration but is an increase in the remuneration framework. The purpose is to secure a remuneration framework in anticipation of an increase in the number of directors as the company's business expands and diversifies, in addition to the increase in the number of directors with the appointment of two new directors. Please note that executive remuneration is determined based on the remuneration standards set by the Remuneration Committee and is operated in a way that directors receive remuneration commensurate with their performance.

Question 3:

Regarding the Japan Fair Trade Commission's recommendation on the violation of the Subcontracting Act in October 2024, please explain the implementation status of the improvement measures and what kind of countermeasures and recurrence prevention measures are currently being taken.

Answer 3:

We sincerely reflect on this matter and intend to use it for future improvements. We have completed the payment of the amount equivalent to the costs required for redoing the work in accordance with the content of the recommendation. We have also conducted an investigation to confirm the resolution at the board of directors, investigated the existence of other applicable transactions, made additional payments for cases found, and implemented internal measures to prevent recurrence. We are currently proceeding with the response by compiling these and submitting a report on the improvements. As for the specific countermeasures, as stated in the press release, we are working on refreshing our internal systems, such as improving internal flows for recurrence prevention, establishing and implementing an internal supervision system, and raising awareness within the company through internal training, and improvements are underway in various places. On the other hand, we do not consider this to be complete, and we believe that we need to maintain effectiveness by monitoring whether the implemented improvement measures and system development are functioning properly, and we will continue to make unceasing efforts to restore trust.

Question 4:

Please tell me about the status of the market segment change to the Prime Market.

Answer 4:

As disclosed on June 24, 2025, we have withdrawn the application once. We cannot provide details on the specific content of the screening because the screening criteria, etc., cannot be disclosed, but we have been working on the screening items, and there have been no facts that the screening was suspended or terminated during the period until disclosure. Regarding the future, we plan to continue preparing for re-application, but the specific re-application schedule is undecided. We apologize that the situation may be unclear to our shareholders, and we ask for your understanding.

Question 5:

We announced our medium-term goals in the fiscal year ended March 2025 financial results. Please tell us about the company's policy, such as specific plans and investment plans.

Answer 5:

We position the current fiscal year as an important investment phase for building a foundation for medium- to long-term growth for our company, and we prioritize implementing strategic and agile investments in areas that are directly linked to future revenue expansion and the establishment of a competitive advantage. Specifically, we will focus on investing in expanding production capabilities, research and development related to new technology/service development, expanding the system related to SCM efficiency, overseas business development, and strengthening our management foundation. On the other hand, it is also a fact that the rapid expansion of the organizational structure has led to a decline in cost efficiency in some areas, and in this regard, we will improve efficiency through structural reforms under the new management system, while also steadily recovering the results of our investments over a medium-term time horizon. In announcing the medium-term goals, we place importance on externally sharing the direction of our business and our image of growth. However, at this time, we do not plan to announce formal materials such as a medium-term management plan. In addition, as we expand into new businesses in addition to the growth of existing businesses, we believe that some changes in the service mix will occur, and we expect the composition ratio of new businesses, including merchandising, licensing/tie-ups, and other TCG and games, to increase further, but at this time, we have not disclosed specific figures so that we can respond flexibly to management changes such as business pivots. We will continue to provide as specific and continuous information as possible about our medium- to long-term strategies and the progress of each business through future financial results explanations and IR activities. We will also pay attention to the opinions and concerns of our shareholders and continue to strive for appropriate information disclosure while valuing dialogue with the capital market.

Question 6:

Please tell us about your IR policy.

Answer 6:

We place importance on appropriately communicating our medium- to long-term expansion policy and its progress to our shareholders and investors, and in the previous fiscal year, we continuously communicated the overall picture of our plan and the progress of our business through IR briefings, timely disclosures, and various materials. In the current fiscal year, by conducting over 300 meetings with institutional investors, the ratio of overseas institutional investors has increased, and the opportunities for meetings with investors who make long-term investments, known as long-only investors, have also increased, which is steadily leading to the expansion of our investor base. We also sincerely accept the points raised by individual investors. We will improve on the points that were lacking and will use the opinions we have received as a reference for the future. Based on this, we are working on further improving IR and disclosure in order to promote a deeper understanding and communication with a sense of conviction, in light of changes in the market environment and the diversification of the investor base. We position these initiatives as an important management issue that contributes to the improvement of corporate value over the medium to long term, rather than a temporary response, and we will promote them in a phased and planned manner. Regarding our IR disclosure policy and operation, the management team also cooperates and implements them after judging their necessity and timeliness. We have also received opinions on the IR communication standards and content, and we will take them seriously as issues for future improvement and continue to work on building a transparent and consistent IR system. We will continue to strive to strengthen our information disclosure system to be more transparent and convincing while receiving constructive opinions.

Question 7:

Please tell me about your current policy on shareholder returns.

Answer 7:

There are various methods for shareholder returns, such as dividends, share buybacks, and shareholder benefits, and we are considering each of them as appropriate. Our basic policy is to prioritize growth investments, but we also want to consider implementing agile return measures in cases where the stock price stays low, deviating significantly from the actual corporate value, or when the accumulation of cash significantly lowers capital efficiency due to business progress. Therefore, we cannot give hints or make definite statements that we will carry out this measure at this time, but we will consider and implement it at an appropriate time in accordance with our disclosure policy. Regarding shareholder benefits, we are not considering shareholder benefits that are distinguished by whether you are a shareholder, such as limited edition goods. On the other hand, we may implement the use of our content to deepen understanding of our company's content in the future, but we will consider its feasibility as appropriate after taking into account its usefulness and implementation costs in light of the aforementioned policy.

Question 8:

Please tell me about the company's thoughts and future policy regarding the recent graduations of talents.

Answer 8:

We take the current situation of continued talent health issues and graduations seriously. As time passes since their debut, the life stages and support needs of the talents have changed and diversified, and it is a fact that in the past, the conventional system was unable to meet the diverse and varied needs, and there were gaps in the way the talents and the company proceeded. Currently, we recognize that reducing the burden on talents and maintaining their physical and mental health are the most important issues, and we are continuously working to review and improve our operational system. Specifically, since the end of last year, we have hired a new general manager for talent management and changed our system, and we are reflecting on what was lacking and thinking about what we should do to make it better for each other in the future. Through various initiatives, we are promptly identifying and responding to the issues that individual talents have, and we are also expanding support measures, including a monitoring system to ensure that the burden is not excessive, and we will continue to focus on creating an environment where they can work with peace of mind. Also, while revenue from areas with relatively low talent engagement is increasing, we do not believe that business expansion and an increase in talent burden are necessarily proportional, and we are promoting the development of various services to enable healthy growth by promoting such business expansion. We will continue to listen to each talent's voice through dialogue, deepen mutual understanding through closer communication, focus on creating an environment where each affiliated talent can work with peace of mind, and pursue improvements so that we can deliver better content with the talents, by promoting new content plans and supporting the further success of existing talents.

Question 9:

Please tell us how you are responding to facts suspected of information leakage, slander, and rumors on the internet.

Answer 9:

First, important facts that fall under legal insider information are accessible only to a limited number of employees within the company and are strictly managed. We cannot answer about the authenticity of information on the internet, but we ask that you do not take these things at face value, as they are not credible. In terms of systems, we are also strengthening our monitoring system to prevent unauthorized access, and in the unlikely event of an information leak, we will promptly identify the cause and work to prevent recurrence. We will continue to strengthen our information security measures to maintain an environment where everyone can feel secure in their support. Regarding various responses, we are conducting investigations based on facts and proceeding with reports and punishments to various parties, but please understand that we cannot report on the progress due to the impact of investigations such as evidence preservation and disclosure procedures.

Question 10:

Please tell us about your policy on how to operate each group of Hololive Production.

Answer 10:

We have received questions about the operation policy, strategy, and information disclosure of each group, such as Hololive and Holostars, but please understand that we cannot answer individual measures, responses, and numbers for strategic reasons. Also, we will use the opinions we have received as a reference for future developments. In terms of business strategy, we communicate our overall strategy in our financial results, etc., but we basically operate multiple VTuber groups with different concepts to meet the diverse tastes of potential fan groups. Currently, we have a strength in expanding the fan base centered on male fans through our female VTuber groups, and in Japan in particular, we are cultivating a diverse range of customer segments through the activities of our talents in music and various other fields, and we believe that expanding these areas will be of great significance in the medium to long term. In the future, we plan to operate by fairly allocating resources according to the needs and efforts of each talent. We have also received questions regarding risk management, and we have established an internal check and moderation flow, and have built a system that can respond promptly from reporting to response in the unlikely event of a risk. We will also implement support that contributes to activities, such as pre-education and lessons, not only when problems are discovered.

Question 11:

Please tell us about the utilization status of the new studio and the progress of technology development.

Answer 11:

The studio's utilization rate is 80% throughout the year, and it is being fully utilized. We provide an environment that talents can use freely, and the number of scenes where they can be used widely has increased, such as recording short videos, using the 3D-enabled self-streaming booth, and using the recording studio, and we are continuously improving the environment. We are also promoting the use of new expression technologies, such as live performances using Unreal Engine. This allows us to fuse high-end expressions such as cinematic cameras, lighting, and realistic fluids and weather with our unique anime and illustration expressions in a high dimension. Our goal is to make users feel that "this live performance is really happening now," and we will continue to develop this experience to the extreme.

Question 12:

Please tell us about the progress of overseas expansion.

Answer 12:

Currently, we are prioritizing overseas business development from the perspective of potential market size, profitability, and cultural affinity with our business, and we are continuing to expand in North America and Asia, where anime culture is deeply rooted, as our immediate focus areas. While our overseas measures have been lagging behind those in Japan, we plan to increase the distribution of localized content, products, and services in each area. In North America in particular, we are holding group live performances every year, and measures such as world tours, solo live performances, and large-scale collaborations have been well-received, and we feel a positive response as we continue to expand. Last year, we established Cover USA, which led to a significant increase in licensing opportunities. The main role of Cover USA was to maximize opportunities by responding to local licensing needs without time differences, and that function has already achieved its planned results. We plan to increase its volume by promoting local hiring, and we expect growth to continue. In addition, with the establishment of the Overseas Business Development Office and Cover USA last year, we believe that we have created a foundation that makes it easier to fulfill the requests of EN talents so that they can work more smoothly, not just in terms of licensing sales, and we will continue to expand on this. Currently, we do not provide detailed disclosure on COVER USA because it is not consolidated from a materiality perspective. On the other hand, we will consider expanding our disclosure items in light of future materiality standards, as appropriate management is required as the business expands. We also recognize that we are receiving more and more interest in the growth status of each branch, such as in the English-speaking world and Indonesia. At this time, it is difficult to break down sales by region and branch due to the structure of revenue attribution, so we have taken the form of disclosing overall sales trends for overseas. However, as the scale of overseas expansion grows and regions and branches with a certain level of materiality become clear, we will carefully consider the possibility of individual disclosure. In addition, overseas sales in the streaming/content division are growing steadily, mainly in the English-speaking world, with a relatively high consumer unit price and the expansion of the local fan base. We will continue to enhance content and expand into multiple languages to increase the growth potential of each region.

Question 13:

Please tell us about the development and deployment status of new business areas such as games and TCGs.

Answer 13:

We believe that TCGs have gotten off to a strong start. As an indicator to back up this growth, we have been awarded as the best-selling card game among new card titles sold in 2024 in a third-party survey that has already been announced, and we have secured a certain share of the card game market. In addition, the number of people who wish to participate in tournaments and exchange meetings held at each store and tournaments held by renting a venue is increasing with each event, and we will continue to consider various new measures in addition to existing ones. In the game area, the smartphone game project "DREAMS" is currently under smooth development for its release. This work aims to be content that can be enjoyed by a wide range of users both in Japan and overseas, and we are making uncompromising efforts in terms of game quality and content. We cannot provide specific information at this time about the release date or the outlook for revenue contribution, but we position this as an important project for our company, and we will continue to work hard to meet everyone's expectations. We will report on future progress and details as appropriate at the right time.

Question 14:

Please tell us about the development status of Holoearth.

Answer 14:

The service has been officially released with a minimum set of features, and we will continue to add new features and improve the user experience. In the initial stage, we assume that the target is the enthusiastic fans of Hololive Production. By promoting the implementation of talent avatars and providing a "new interaction experience" that cannot be obtained elsewhere, we plan to build the service's foundation with everyone, improve its value, increase engagement, and expand that enthusiasm into monetizable content such as digital items and events. We position Holoearth as a challenge to expand the possibilities of user experience over the medium to long term, and at this time, we are focusing on building a mechanism for the community to expand and accumulating a technical foundation rather than on quantitative results. We are also conducting advance tests to maximize future monetization, such as improving the user experience after the official service starts, technical verification of the billing system, and support for various payment methods. Through these tests, we are obtaining extremely valuable data and knowledge, and the progress is better than initially planned. Regarding the continuation of the service, we are currently at the stage of continuously evaluating the growth potential as a business from multiple perspectives, such as the quality of the user experience, technical progress, the possibility of partnerships, and the synergistic effect with brand assets, rather than judging it based on a single indicator or short-term numbers. We recognize that early blackening is an important goal, and we will focus on creating revenue opportunities through user engagement and content expansion, and we are aiming for early realization while watching future user trends and the progress of content development.

2. Answers to Questions from the Q&A Session at the General Meeting of Shareholders

Question 15:

Currently, your company's medium- to long-term business plan is formulated based on operating profit and operating profit margin, but from a shareholder's perspective, I think it is important to also use indicators that show capital efficiency, such as ROE and ROIC. Therefore, I would like you to consider setting targets that take ROE and ROIC into account in your future business plan and disclose the actual and planned values of these indicators in your financial statements.

Answer 15:

We recognize that our current capital efficiency is at a high level compared to the industry average. We plan to appropriately use indicators such as ROE and ROIC as one of the factors for judging future capital policies and shareholder returns, in light of the possibility that capital efficiency may decline to a certain extent due to the expansion of the balance sheet, etc.. We will use the opinions we have received as a reference for future disclosure considerations regarding the incorporation of specific numerical targets into our business plan.

Question 16:

Shouldn't a woman have been appointed as a director? Mr. Ogura is an outside director, so besides him. I think it is necessary for corporate management. The government's policy is to aim for more than 30% female executives by 2030, even on the Tokyo Stock Exchange Prime.

Answer 16:

Regarding the selection of officers, we will continue to select and appoint appropriate personnel while also considering the male-to-female ratio of officers indicated by the Tokyo Stock Exchange's standards.

Question 17:

A recent announcement regarding a talent's activities was made on the official account earlier than the agreed-upon date, and the talent was very confused. Similar incidents, including this one, have been seen in the past, and although recurrence prevention has been stated each time, I feel that the relationship of trust with our affiliated talents is being damaged. As a result, there are concerns about the loss of talents due to graduation. Is there no room for improvement?

Answer 17:

We apologize for the concern. The management team also recognizes the problem, has received a share of it within the company, and has instructed improvements. We will clarify the cause of the mistake in each case and take measures to prevent its recurrence.

Question 18:

At the 7th regular shareholders' meeting, you said that you were aiming to monetize by 2025, but I believe that this has not been achieved yet. Is it necessary to continue as is, or should we reconsider? If we continue, should we do so in a more energy-efficient manner? I would like to hear your thoughts.

Answer 18:

I understand this is a question about Holoearth. Since our initial public offering, our policy has been to aim for monetization within a few years of service launch, and we officially launched the service in April of this year. As mentioned earlier, achieving profitability as soon as possible is a key objective, and we will continue to work toward this goal while monitoring user trends and the progress of content development.

Question 19:

Official goods have become easier to obtain in large cities, especially at anime shops, but they are still difficult to find in rural areas. I believe that in order for Hololive to become a brand loved by everyone, a wider range of goods sales is desirable. Also, with the meaning of a real information hub, I would like you to consider establishing a permanent real shop.

Answer 19:

We believe that the official shop at Tokyo Station has attracted many young customers, leading to the acquisition of young and new customer segments, and we are proactively considering future developments. We recently announced the opening of an official shop in Osaka. Our overall policy is to consider whether an appropriate location can be rented for a store and whether enough customers can be expected to maintain the store.

Question 20:

Regarding the large number of talent graduations, are you aware of and sharing information about the talents' mental state, their direction, and their workload? Also, are you investigating posts that are believed to be information leaks from within the company?

Answer 20:

We take the current situation of continued talent health issues and graduations seriously. We recognize that reducing the burden on talents and maintaining their physical and mental health are the most important issues, and we are continuously working to review and improve our operational system. As specific initiatives, we have introduced a mental care service for talents and are implementing measures to maintain their physical and mental health, such as supporting them in receiving health checkups. We are also conducting investigations into facts suspected of leaking and are proceeding with reports and punishments to various parties within the company.

Question 21:

Holoearth is limited to working on high-performance PCs. I would like you to proceed with game console platform support, just like holo Indie, so that many people can access it in the future. I would like to ask you to consider it positively.

Answer 21:

We recognize that there are challenges such as the load on PCs, and we are working to resolve them. In order for many users to play, we will proceed with various developments while also taking into account the opinions we have received.

Question 22:

I understand that after a talent graduates, the IP of the character belongs to your company, but have you not considered developing character businesses using that IP? I would like to hear your opinion on this, also in the sense of responding to the feelings of the fans.

Answer 22:

We believe that the VTuber format is a content format that demonstrates maximum royalty when the character and the performer work together as one, not just the character. Therefore, we recognize that actively developing the character after the contract with the performer ends could be seen as neglecting the character and could significantly damage the customer experience, so it is a matter that should be handled with caution. In order to address this issue, we have also set up a new format called "End of Streaming Activities," but we intend to continue to consider what the ideal form should be, including the use of that in the future.

Question 23:

Last fiscal year, warehouse costs were about 3.5 billion yen, which was a factor in squeezing our operating profit. An IR announcement about improving logistics was made yesterday, but how much cost reduction do you expect from this improvement?

Answer 23:

The impact on the current fiscal year's performance has been factored into the plan to some extent, and we expect that business efficiency will gradually improve with the launch of the new center. We are also negotiating delivery costs, and we expect a certain level of effect in Japan this fiscal year, and we intend to review overseas delivery, including the manufacturers.

Question 24:

I feel that the burden on CEO Tanigo is too great during the general meeting of shareholders. I would like you to hire a moderator and try to reduce his workload.

Answer 24:

Thank you for your suggestion. From this fiscal year, we have been working to reduce the burden on the day of the meeting, such as by pre-recording the business report part.

Question 25:

I would like to ask about future capital investment. What are your plans, including studio equipment for live performances and collaborations with other companies, to achieve further growth, to the extent that you can answer?

Answer 25:

We are limited in what we can say for strategic reasons, but we believe that this is an area that we will be working on over the medium to long term. As a future capital allocation, we have set a framework for growth investments of 50 billion yen and measures such as M&A, and we expect to consider all possibilities in the future.

Question 26:

Regarding the transition to the Prime Market, the screening process has been prolonged. To the extent that it is not a problem to talk about, please explain the reasons why the screening has been so long.

Answer 26:

Our company is continuously preparing for the change in listing segment to the Prime Market, and we are striving to achieve a stable level that meets the Prime Market listing criteria, including strengthening our governance, disclosure system, and internal management system. We will report to you at the appropriate time as soon as the preparations are complete.

Question 27:

Regarding fan art using illustration AI, it seems that your company has instructed its affiliated talents not to use it in their streams, but because the talents are left to make the judgment, various troubles have occurred, such as technically inaccurate guidance and reputational damage to fan art creators who were mistakenly identified as having used AI to create their hand-drawn fan art. Shouldn't the company, as an office, unify its response to AI-made fan art, like its competitors?

Answer 27:

From the perspective of AI utilization, we are carefully considering the situation while deepening our understanding of AI and watching trends. We also distinguish between the use and misuse of generative AI, and we plan to take measures, including legal action, against illegal acts.

Question 28:

Please explain the rationality of increasing executive compensation while there are management issues such as talent graduations and violations of the Subcontracting Act. I believe that prioritizing dividends, which are a return of profits to shareholders, is the way to align the interests of management and shareholders. I would like to hear your opinion.

Answer 28:

This time, in addition to the increase in the number of directors with the appointment of two new directors, the purpose is to secure a remuneration framework in anticipation of an increase in the number of directors when expanding the management and supervision functions as our company's business continues to expand and diversify. In addition, this proposal is for an increase in the remuneration framework, and the actual remuneration is determined based on the performance and contribution based on the remuneration standards set by the Remuneration Committee, and we have set the remuneration standards, etc., to align with the interests of our shareholders.

Question 29:

It was announced yesterday that an artist affiliated with your company has ended their activities with an external label and will continue their music activities with your company's label. Is this related to the change in the articles of incorporation?

Answer 29:

This is a duplicate of the answer to "Question 1 submitted in advance," but we have added it for the purpose of resolving practical restrictions on music business activities. This change is not directly related to the affiliated talent's activities with our company's label, but we believe that by expanding the scope of our company's music business activities, we can expand the scope of support we can provide.

Question 30:

I would like to know the company's thoughts on unauthorized derivative works. How do you feel about a third party creating unauthorized derivative works and earning a profit from them, even though the talents themselves have strict regulations on their avatar rights?

Answer 30:

Our company's thinking on derivative works is as described in the derivative work guidelines we have published. We are taking appropriate measures, such as requesting the removal of such creations, for those that we consider inappropriate and in violation of the derivative work guidelines.

Question 31:

I am concerned that Holoearth will be a rehash of existing metaverse and games. I would like to ask you about the uniqueness and appeal that only Holoearth has or aims to have, beyond simply having its own VTubers. Also, will it just be one more place for existing VTubers to be active? Do you want to create another world with a market, life, and culture that encompasses it as a metaverse? How much are you willing to invest?

Answer 31:

We believe that Holoearth is a "home ground" that we are creating ourselves, and a safe environment is guaranteed. This will enable talents and fans to have a more direct and deeper level of interaction. We are focusing on creating a "place" where enthusiastic fans can gather on a daily basis and building a strong community foundation. With this community as the core, we will further develop UGC functions where users themselves become creators. This will greatly expand the range of ways to play and aim to acquire a wider range of users, not just the existing fan base. With this unique experience value as the core, we aim to establish a unique economic zone consisting of elements such as avatars, items, events, and UGC, and to make it a pillar of our sustainable business.

Question 32:

Some streamers are seen using derogatory expressions in their streams and on social media, but are there any guidelines or instructions for affiliated talents regarding the use of such inappropriate language? Also, what are your thoughts on the impact of such remarks on viewers and the community?

Answer 32:

Regarding the streaming and communication of our talents, we have established various guidelines and are working to prevent inappropriate behavior. In the event that a talent makes an inappropriate remark, we provide appropriate guidance to the talent.

Question 33:

An illustrator who was in charge of character design for a talent affiliated with your company has claimed infringement of the right to maintain identity and made a statement on social media that they will independently regulate the creation of derivative illustrations of the talent they were in charge of, and have also announced that they will actually sue one illustration poster who violated this. How will your company respond to such regulation of derivative works by official illustrators that exceeds the restrictions in your derivative work guidelines?

Answer 33:

As a company, our position is based on the contractual relationship with the illustrator and is as described in our derivative work guidelines. In the future, we will continue to work to promote derivative work activities that are understood by both the illustrators and the creators of derivative works.

Question 34:

While the cost of sales is not much different from that of other companies in the same industry, the selling, general, and administrative expenses are significantly different, and I think this difference affects the profit margin. However, despite having more talents than other companies in the same industry, why is this the case, and how will you use this to lead to sales and profits in the future?

Answer 34:

The business structures are different and a simple comparison cannot be made, but we recognize that our short-term profit margin is inferior to that of our competitors because we are actively making investments for future growth, such as overseas business development and research and development related to expression technology. On the other hand, as a result of this, our strength is that we have been able to build a brand that has multiple talents with very strong customer-attracting power, and we have been able to operate a diversified service, such as global expansion and a media mix, starting from the brand. We are also able to take advantage of the scale of our business, such as by providing high-quality content to the fan base we have built, and we expect that the profit margin will improve due to the increase in the percentage of sales from merchandising, licensing/tie-ups, and new areas such as TCGs. Although the profit level will be suppressed to a certain extent this fiscal year due to upfront investments, we expect future profitability to improve compared to before.

Question 35:

The stock price is low, and there are no dividends or benefits, so I am considering selling my shares. Will you not take any measures for the above two and the stock price in the future?

Answer 35:

I will add to the answer I gave in "Question 7 submitted in advance". We recognize that the stock price is affected by various external factors, such as the daily supply and demand in the stock market, investor sentiment, industry trends, and the macro environment. On the other hand, we believe that it is important to increase the ratio of long-term investors by properly communicating our medium- to long-term expansion policy and its progress to the market as a growth company, which is also important for the stability of the stock price, and we are considering and implementing various measures such as meetings with institutional investors and information disclosure on our IR website.

Question 36:

Will you not increase the number of advertisements on YouTube featuring Cover's talents? I felt refreshed when I saw a Hololive advertisement and it was the final push for me to actually visit. Are you also considering advertising Cover and the affiliated talents themselves on YouTube? If so, what are the problems and concerns?

Answer 36:

We are comparing and considering various measures for promotion, not just YouTube advertisements, but we will refrain from providing a detailed answer for strategic reasons.

Question 37:

When you instruct or restrict the work or activities of affiliated VTuber talents, do you conduct a legal check to see if each instruction or restriction falls under the abuse of a dominant position?

Answer 37:

When we give instructions or restrictions on the work activities of our talents and there are legal concerns, we confirm them with our legal department, in-house lawyers, and outside lawyers, and we proceed in compliance with the law.

Question 38:

I get the impression that the lineup of goods is diversifying, but at the same time, it seems that the number of sold-out products is decreasing compared to before. Could you please explain how this situation is affecting sales and profits? Also, could you give us your opinion on your future merchandise strategy?

Answer 38:

We believe that being able to purchase the products you want when you want them leads to the maximization of purchasing opportunities, and there is a certain merit in stabilizing the supply of products. On the other hand, we have also recorded a valuation loss on products in the previous fiscal year, but we will strive to maximize goods sales opportunities while improving the accuracy of demand forecasting and reducing inventory risk.

Question 39:

It seems that Cover is promoting in-house production, as some talents' labels have changed to Hololive, but can Mr. Tanigo control the expanding Cover? Is there a system in place to discover talents who can feel growth and who cannot do it from the beginning?

Answer 39:

As our business expands, we are also simultaneously strengthening our company system. The change in our management system in April and the upfront investments in the current fiscal year are measures taken in anticipation of this future expansion, and are one of the measures to operate in a sustainable and growing manner. We will continue to operate our business to meet everyone's expectations, and we ask for your continued support.

Question 40:

Graduations have been happening one after another, and I'm tired of the convenient and insincere phrase "differences in direction." We have no transparent explanation for the reasons for graduation and no way of knowing, and I can't support them because I'm worried that this will continue. Can you state with certainty that the reasons are not harassment or coercion? As a result, it is a great loss, and I believe the representative should take responsibility. What do you think?

Answer 40:

We ask for your understanding that we cannot provide details on individual circumstances from either party due to contractual reasons. We recognize that the expression "differences in direction" is used to announce that an amicable agreement has been reached, respecting the intentions of both parties, without going into specific details, so as not to invite speculation about delicate matters. As for the talents who are graduating, we will continue to fully support them until the day of their graduation, and we aim to provide content in a way that fans can enjoy and support.

Question 41:

One of the talents announced that they would be leaving the CD label they were affiliated with and continuing their music activities with Hololive. Can we assume that they will receive the same kind of support as they did when they were affiliated with the label?

Answer 41:

The support system for their activities will not deteriorate in any way. We will continue to expand and enhance our support to match each talent's area of activity, in line with the talent support policy we have answered so far.

Question 42:

I understand that your company's capital investment is an important foundation for competitiveness, but I believe that the greatest appeal of the VTuber business lies in the power of the talent's words to attract fans with their own expressions and deepen those relationships. Under an ROI-focused, equipment-driven operational design, is there not a structural risk that the performers' creativity and continued involvement will be damaged? I would like to ask about the policy of shifting to KPIs that prioritize performer retention, which is a different axis from fan engagement, and the institutional design.

Answer 42:

We also recognize that the individuality and creativity of our affiliated talents and creators are extremely important sources of value creation, and their continuity and sustainability are core elements that support our company's competitive advantage. We are also sincerely addressing matters related to talent management as one of our management issues. We place importance on activity policies that make the most of each talent's individual characteristics, and we are continuously working to strengthen a more detailed management system. In the future, we will continue to focus on creating an environment where talents can work with peace of mind and improve the value of our content.

Question 43:

Regarding the policy of expanding content on Bilibili, it seems that you are pushing it forward by putting the responsibility on the talents. What are your company's thoughts on entering Bilibili?

Answer 43:

We believe that content development such as talent streaming on Bilibili is being carried out under the company's leadership with sufficient preparation, and we believe that the streaming so far has been carried out without any problems. The parts that have been prevented in advance do not appear on the surface and cannot be specifically mentioned, so it may be difficult to feel, but we are taking various measures, including streaming moderation and pre-education, including the parts that have changed in our system.

Question 44:

Thank you for disclosing the securities report before the general meeting. I think it's wonderful that the rate of male workers taking childcare leave has increased significantly, but what are your thoughts on the work-life balance of your affiliated talents, not just your employees? Do you have any numerical targets?

Answer 44:

As I have said in previous related questions, we recognize that maintaining the physical and mental health of our talents is the most important issue, and we are continuously working to review and improve our operational system. As specific initiatives, we are working to maintain their physical and mental health by introducing mental care services for talents and supporting them in receiving health checkups. We do not have any specific numerical targets at this time.

Question 45:

CEO Tanigo is conducting activities to directly interview talents, but is he really interviewing them?

Answer 45:

We are continuing to work on creating a foundation and system that allows us to directly hear the voices of our talents as much as possible. We believe that providing opportunities for direct dialogue not only allows us to hear the voices of the talents themselves but also allows us to get a real sense of what's happening at the site. We will also consider opportunities for dialogue with our talents, including the CEO, based on their intentions.

Original document in Japanese: Direct file link