■Company Overview

3. Composition ratio by business/field

Creek & River's sales composition ratio for the 2025/2 interim period is the production business at 50.2%, followed by the agency business (dispatch) at 33.0%, the agency business (referral) at 12.2%, and the rights management business and others at 4.6%. The gross profit composition ratio is as high as 31.9% for the agency business (referral), followed by 42.6% of the production business, 19.1% for the agency business (dispatch), and 6.4% for the rights management business and others.

Also, as for the sales structure ratio by field, games are 25.1%, TV/video is 21.1%, and the web accounts for over 60% of the total in the three main fields, followed by medical care at 12.5%, the Korean business at 6.1%, accounting/law at 4.8%, and e-books/copyright at 1.7%. The composition ratio of operating income is 45.6% for medical care, 31.1% for games, 13.1% for the web, and 12.2% for television/video, but this is because sales of the doctor referral business are concentrated in the first quarter in the medical field, and the composition ratio is at the level of about 30% when viewed over the full year.

Constructed a human resources network of over 0.39 million people and provided services to 0.05 million customers

4. Features and strengths

The characteristics of the company's business are that it develops contracting, dispatching/referral services and rights management businesses specialized in the professional field, and we believe that it is different from general human resources service companies.

(1) Develop business targeting a wide range of professional fields

Professionals defined by the company meet 3 conditions: 1) occupations that can be active worldwide, 2) occupations that cannot be replaced by machines, and 3) occupations where intellectual property is accumulated. A total of 18 fields are being developed under these 3 conditions: video, games, the web, advertising/publishing, artists, performing arts, medicine, architecture, fashion, food, athletes, life sciences, agriculture, IT, AI/DX, CXO, accounting, and the legal profession. In addition, XR* (VR/AR/MR) and drones are provided as peripheral services. From the viewpoint of stability of business performance, since a wide range of professional fields are developed as business areas, it is characterized by a profit structure that is less likely to be affected by the market environment of specific industries, and it can be said that it is the company's strength.

* XR is also called cross-reality, and it is a general term for the following various technologies. VR (vertial reality: virtual reality) is a technology that creates an artificial environment on a computer and allows you to experience the feeling of being there beyond time or space. AR (Augmented Reality: Augmented Reality) is a technology that expands the real world by displaying additional information in a real space. MR (mixed reality: mixed reality) is a technology that incorporates artificial virtual world information created with CG etc. into the real world and creates a world that combines the real world and the virtual world.

(2) Accumulate know-how within the group by setting up a production studio

Not only is know-how accumulated by people by providing services, but by digging deeper into that know-how while sharing it with the entire organization and expanding it to other fields, it leads to better proposals and service quality improvements to client companies. Specifically, professionals who have completed work at client companies share needs, etc. at their place of employment, and they make use of it to acquire new order acceptance projects by collaborating with professionals who have returned from other client companies to develop the next planning proposal. The range of professional thinking has expanded, and know-how that cannot be obtained from the experience of only one company is accumulated within the company, making proposals with high added value possible, and differentiation from competitors is being sought. By constructing this virtuous cycle system, we have acquired a large number of client companies in the TV and game industry, and recently there have been an increasing number of cases where large-scale projects are received regardless of whether the public or private sector are receiving orders for web production.

In the main creative field, production studios are owned in Tokyo (TV, game, web, XR, YouTube), Nagoya (amusement), and Osaka (game), and in addition to being a place for approximately 2,000 professional human resources to accumulate and share know-how, it has also led to productivity improvements by establishing a remote work system after the spread of the novel coronavirus infection (hereinafter, COVID-19). Also, in 2023/3, the “C&R Creative Studios Metaverse,” a work/exchange specific metaverse dedicated to creators, where events can be held and exchanged, works can be exhibited, and projects (work) can be exchanged on the metaverse*, will be open to the public. Currently, we are gradually expanding the functionality, and we aim to make it a place where global creators gather in the future.

* It is a three-dimensional space created virtually on the internet, and users can operate avatars that take their place and interact with others.

(3) Large networks

The network of professional human resources registered with the company is 0.394 million people as of 2024/2, which is approximately 1.5 times larger than 5 years ago. In the main creative field, we have built one of the largest networks in Japan with over 0.09 million creators. In particular, in the video field, programs involving creators participating in the company's network account for about 45% of Japanese terrestrial programs, and since the Shion Group, starting with Sion Co., Ltd. became a subsidiary in January 2023, it is the 3rd largest independent program production company in the industry* in terms of sales. In the game field, in addition to the production and operation of titles developed in-house, we are involved in the development of around 200 titles per year, including joint development projects with major platform companies and publishers, etc., and we are building the largest network in Japan.

* Program production sales are expected to be on the scale of 30 to 4 billion yen per year due to Shion Group becoming a subsidiary.

In the medical field, 0.163 million people, who account for the majority of approximately 0.26 million physicians (including medical residents) working in Japan, have registered for services provided by Medical Principles Co., Ltd. (job change information site “private medical office” for doctors, clinical training support service “Reginavi” for medical students and medical residents, etc.), and the number of medical facilities that serve as customers is 0.017 million facilities. The company holds “Reginavi Fair” for medical students and medical residents on a nationwide scale (online fairs will also start in 2020), leading to membership registration for medical students and medical residents. In addition to being able to suppress advertising costs to acquire “private medical office” members, it is structured so that high profitability can be obtained. Also, since working physicians change jobs in an average of 3 years, the referral business can be said to be a business structure close to a stock type based on the number of members.

※ The source is the Ministry of Health, Labor, and Welfare's “Overview of Reiwa 4 Doctor/Dentist/Pharmacist Statistics.”

Human resource networks are expanding year by year in other fields as well. In the IT field and AI/DX field, there are approximately 0.012 million people, mainly IT engineers, data scientists, researchers, etc., about 0.022 million people in the legal field, lawyers, legal/intellectual property staff, etc., and about 0.069 million people, such as certified public accountants and tax accountants, etc. in the accounting field. Also, in the CXO field, the number of registrants is steadily expanding to about 1,900 people, mainly CEOs, COOs, and experienced CFO of listed companies.

(Author: FISCO Visiting Analyst Joe Sato)