Japanese entertainment company Furyu Corp. reported a mixed first quarter as growth in its character merchandise division helped offset continued weakness in its traditional photo sticker business, raising questions about the sustainability of its modest recovery.
The Tokyo-based firm said revenue rose 0.6% to ¥10.1 billion ($67 million) for the three months ended June, while operating profit climbed 8.3% to ¥702 million ($4.7 million). Net income increased 6.2% to ¥463 million ($3.1 million), according to company filings released Thursday.
Furyu’s character intellectual property business, which produces crane game prizes and collectibles, drove most of the gains with revenue jumping 7.6% to ¥6.3 billion ($42 million). Operating profit in the segment surged 21% to ¥618 million ($4.1 million) as the company capitalized on popular manga and global gaming franchises.
However, the results highlighted ongoing challenges in Furyu’s photo sticker operations, a business built around Japan’s “purikura” photo booth culture. The girls trend segment, which includes the print-seal machines and related digital services, saw revenue decline marginally while operating profit plummeted 25% to ¥663 million ($4.4 million).
Photo booth usage dropped to 6.38 million sessions during the quarter from 7.11 million a year earlier, reflecting broader shifts in youth entertainment preferences. The company’s Pictlink digital photo service also lost ground, with paid subscribers falling to 1.3 million from 1.4 million.
Furyu’s struggles mirror broader challenges facing Japan’s traditional arcade industry, even as the country’s ¥2.7 trillion character merchandise market continues expanding. The crane game segment, where Furyu competes, has been buoyed by tourism recovery and strong demand for collectible figures.
The company maintained its full-year guidance for ¥450 billion revenue and ¥30 billion operating profit, implying confidence that character licensing momentum can offset photo booth declines. However, with its core purikura business facing structural headwinds, Furyu may need to accelerate its pivot toward higher-growth merchandise categories to sustain long-term profitability.
