Investors

Overview

Overview

The Corporation, through its subsidiaries, is an emerging global entertainment software and content creation company primarily engaged in the creation, development, co-development and operation of high quality interactive entertainment software in the form of video games, mobile applications and gaming machine content. The Corporation's products include unique games for multi-gaming software platforms such as PCs, smart phones, tablets, and video gaming consoles. The Corporation also produces software and content for specialty gaming machines targeting the Japanese Pachinko and Pachislot market.

The Corporation's main focus is on the promotion and marketing of its PC online games, particularly its recently released game, DT. DT is an action adventure melee combat game that combines elements of martial arts, sword fighting, and shooting and was released on the Nintendo® Wii U™ in 2015. The Corporation is also developing a PC online version of DT, which will be a free-to-download game where players can make regular small cash purchases of in-game weapons, characters, basecamp materials, additional life and other powers to enhance their enjoyment of the game.

In an effort to become a leader as an entertainment creation company, on January 1, 2015, the Corporation acquired all of the issued and outstanding share capital in V7, VN, EIN and Soleil.


Business Segments

The Corporation has organized its operations into four business segments.

PC Online Games

Through VN, the Corporation plans on leveraging its IP associated with high quality single-player games in order to develop independent content, and to create free-to-play multi-player versions in MMO format with a revenue model based on in-game purchases. The objective of this business segment is to realize additional revenues on the back of existing IP and an increased life span for games via the stepped single-player multi-player version release sequence. The Corporation believes that PC online games in MMO format will have a longer life-span, averaging 3-5 years, when compared to single-player equivalents. The Corporation aims to develop a large, sustainable multi-player user community by capturing the current single-player game audience and launching its products on a free-to-play basis, and promote user retention, customer loyalty and game longevity through the interactive nature of the content.

Pachinko and Pachislot Machine Content

Pachinko and Pachislot are a game unique to Japan that can be compared to pin-ball and slot machines. It is a large and long-standing business in Japan with gross turnover of approximately $245 billion per year. Pachinko and Pachislot arcades are found in neighbourhoods all over Japan and consist of rows of standing Pachinko or Pachislot machines that pay off in steel balls or tokens. It is a very competitive industry and parlour owners are constantly striving to provide newer, more entertaining machines to attract players. V7's sales and distribution strategy consists of one time and recurring development contracts with Pachinko and Pachislot machine manufacturers and operators. V7 has a sales team lead by its CEO to help obtain development contract from publishers.

High Quality, Single-Player Video Games

VGS Japan is focussed on the creation of video games in the action/shooter genre. The Corporation's goal is to create video game franchises on the back of RUNE, its internally-developed proprietary gaming engine. RUNE is unique and enables speedy vertical combat action brought to life through three exciting combat styles: Swords (close range combat against encroaching enemies), Guns (mid to long range firearms) and Hand-to-Hand (one-hit kills with brutal martial arts maneuvers). RUNE is a combat system developed by VGS Japan and installed for the first time in DT. In this system, the three kinds of combat style are joined together into one high-speed combat action game. With this engine, players can experience realistic combat scenes in 3D. RUNE plays a central role in the Corporation's mid-term plan and streamlines the game development process, removing duplicate processes and lowering development cost as well as associated risk. VGS Japan intends to use RUNE to develop games on high-end video gaming consoles such as the Sony® PlayStation®4, Microsoft® Xbox One™, and the Nintendo® Wii U™, as well as on PC. Amazon is the exclusive retailer in Japan for the Wii U™ version of DT.

Mobile Applications

EIN develops mobile game applications for self-publication and for third parties on a contract basis. EIN's team members have many years of experience developing a wide range of mobile game applications ranging from casual games to graphic-intense shooter type games. EIN is well positioned for the development of both stand-alone game applications and applications utilizing the Corporation's IP. EIN is currently developing a mobile application in support of the multi-player version of DT, which will allow players to interact with other users while away from a PC, as well as make in-game purchases and tailor certain aspects of the players' gaming experience. EIN's mobile applications are designed to enable the users to experience full engagement with short sessions and frequent breaks.


Strategy

The Corporation is led by a highly experienced Management and development team with a proven track record. Historically, the Corporation's main line of business has been for contracted contents development for high powered video game consoles. With the acquisition of the DT IP rights in 2012 and the Corporation's own internally-developed game engine, the Corporation believes that it is uniquely positioned in the video gaming industry due to the competitive advantages that it has developed since inception. The Corporation's objective is to monetize and maximize the value of its IP across its various business segments.

Unique IP Strategy

In addition to the DT IP acquired in 2012, the Corporation also retains ownership of other IP that it develops, thus allowing the Corporation to fully capitalize on the revenue potential. This strategy enables the Corporation to utilize the same IP in developing titles across the Corporation's various subsidiaries and therefore a wide range of platforms. In comparison, many video game developers choose to remain as contractors for larger publishers and do not retain the IP created as a result.

Proprietary Game Development Engine

RUNE, the internally-developed proprietary video game graphics engine during the development of DT, provides the Corporation with a competitive advantage in its game development capabilities over the competitor video game developers. RUNE enables the development of detailed visuals and realistic graphic content for video games in the action and shooter genres and is expected to allow the Corporation to develop new video game titles or on different platforms and build upon the current titles for sequels much quicker than its competitors. This vastly streamlined game development process removes duplicate processes and lowers development cost as well as associated risks.