I view this as a low risk medium reward play. I own a much larger position in Nippon Ichi Software as it has much more upside, and while both names don't have much downside, Imagineer seems to be safer. Another cheap Japanese game developer I own is Falcom which Mokapu Capital already wrote up: https://mokapucapital.com/nihon-falcom-small-cash-rich-niche-video-game-developer/
I love to own these names in a basket as any of these names have the potential to release a hit game and return multiples of their current price. While I've written up several gaming companies now, Japan makes up only around 20% of my portfolio, but I've been finding a lot to like there.
Hey, it's been a year; has anything changed about this name that I should know about? Price is still sitting around 1000 yen. The positive carry is still available at 1.5% from IBKR. Still looks like a I don't lose much bet, and if they produce a hit game, the stock could increase quite a bit.
This one hasn't gone anywhere unfortunately. Other names in the cheap JP port has done very well. At least it hasn't been a big loser given minimal cost of carry.
Imo if it's a net net it's because the cash is not used or distributed enough. why would that change? in the mean time the cash is not yours. I avoid net cash plays where cash is not being put to use.
That 17+ years of dividend growth history aint bad and the dividend more than covers my 0.75% margin cost. I view that as my hurdle in this position with a small chance of a rerate higher in a hit game or management buyout
You outlined some of their products, including a small basket of mobile games /w sizable Android downloads. Do you have data regarding what % of rev and profits is derived from mobile vs. rest of business, and what mix is Android/iOS? I ask because the environment for mobile gaming user acquisition on iOS has been a bloodbath post-ATT. This could be a longer-term drag that I'd be interesting in mathing out.
I view this as a low risk medium reward play. I own a much larger position in Nippon Ichi Software as it has much more upside, and while both names don't have much downside, Imagineer seems to be safer. Another cheap Japanese game developer I own is Falcom which Mokapu Capital already wrote up: https://mokapucapital.com/nihon-falcom-small-cash-rich-niche-video-game-developer/
I love to own these names in a basket as any of these names have the potential to release a hit game and return multiples of their current price. While I've written up several gaming companies now, Japan makes up only around 20% of my portfolio, but I've been finding a lot to like there.
Hey, it's been a year; has anything changed about this name that I should know about? Price is still sitting around 1000 yen. The positive carry is still available at 1.5% from IBKR. Still looks like a I don't lose much bet, and if they produce a hit game, the stock could increase quite a bit.
This one hasn't gone anywhere unfortunately. Other names in the cheap JP port has done very well. At least it hasn't been a big loser given minimal cost of carry.
Imo if it's a net net it's because the cash is not used or distributed enough. why would that change? in the mean time the cash is not yours. I avoid net cash plays where cash is not being put to use.
That 17+ years of dividend growth history aint bad and the dividend more than covers my 0.75% margin cost. I view that as my hurdle in this position with a small chance of a rerate higher in a hit game or management buyout
Fascinating little company - love the thesis.
You outlined some of their products, including a small basket of mobile games /w sizable Android downloads. Do you have data regarding what % of rev and profits is derived from mobile vs. rest of business, and what mix is Android/iOS? I ask because the environment for mobile gaming user acquisition on iOS has been a bloodbath post-ATT. This could be a longer-term drag that I'd be interesting in mathing out.
Thanks again for the great write-up.
Good question! Breakdown is from Imagineer's last annual report.
Nintendo: 24.1%
NTT Docomo: 17.6% (Billings for stickers/other content)
Google: 13.5%
Apple 13%
Source: Bottom of page 13 https://www.imagineer.co.jp/news/pdf/45_yuukashokenhoukokusho.pdf
Straightforward enough. Thanks!
Interesting carry, will look into it.