|To Our Shareholders and Investors:
Amidst the extensive and extremely rapid changes in the market over the past few years marked by the pivotal shift from feature phones to smartphones, the Acrodea group of companies has transformed significantly from its previous, middleware-centric business operations.
Investment and development have progressed for smartphone services and solutions. The product portfolio including Kisekae touch, Acrodea Rights Guard (security solution), and Multi-Package Installer for Android (app delivery solution) is beginning to bear fruit. As a new service initiative since last year, social services have launched. In particular, the Japan national soccer team members were licensed for our social game "Soccer Japan National Team 2014 Heroes," which is tracking successfully. Moreover, business is extremely favorable at subsidiary AMS, whose e-commerce fulfillment services are successively landing large clients.
As license revenues associated with feature phones dwindled, the company quickly required a new product portfolio for smartphones. During the launch phase of the various services, moreover, investments were made in advance, while extremely poor performance results were experienced up through the prior fiscal year. I offer my deep apology to shareholders and stakeholders over this underperformance that caused much concern.
At this point, I am prepared to declare the rebirth of Acrodea during this fiscal year.
For the solutions to which investments have continued over the past few years, we can now anticipate a certain level of revenues, as described previously. In this context, Acrodea will shift from an investment phase to recoupment phase this year. Along with close cost controls aligned to revenues, the company has radically shifted its operations to recurring schemes that can continually book revenues.
In addition, Acrodea is making a bold decision to significantly alter its business model. Since establishment, the company has maintained its core middleware business through licensing and contracted development. Henceforth, low-margin software contract work consisting of merely selling engineering man-hours will be phased out towards improved profitability, by applying engineer skills to more relevant businesses. Licensing will mainly consist of support for existing products.
Consequently, all management resources will concentrate around the successfully growing E-Commerce Fulfillment Service Business by subsidiary AMS, the Content Services Business within the new, significantly growing social gaming sector, and the Smartphone Business that has mature services. These three pillars form the revamped Acrodea Group in its engagement of business activities.
Although we will reduce and discontinue legacy businesses of software development contracting and distribution, our efforts to polish technical capabilities recognized by various stakeholders will be stepped up. Continuing to take on the challenge of bringing the best ideas to reality, Acrodea pledges its corporate objectives to provide partners with service platforms that can deliver enhanced lifestyles to users, and intends to develop distinctive solutions for Japan and globally.
In this transition phase of the smartphone, Acrodea crossed a steep valley that required painful reform. With the bottoming out of last year behind us, we look ahead this year in regaining our conventional power and momentum towards the restoration of business performance. Together with management and all staff redoubling their efforts in this endeavor, I ask for your continued support of the Acrodea group of companies.