CAVE Interactive CO., LTD. (TSE: 3760), the Tokyo game developer and publisher best known historically for its arcade shoot-'em-ups, reported consolidated results for the year ended May 31, 2026 under Japanese GAAP. Revenue fell 14.1% to ¥12,002 million, and the company swung from an operating profit of ¥1,133 million a year earlier to an operating loss of ¥608 million. The ordinary line turned to a ¥536 million loss, and the net loss attributable to owners of the parent came in at ¥2,799 million against a ¥246 million profit in FY5/2025. Basic earnings per share were −¥463.67, versus ¥40.90. EBITDA — measured here before depreciation and goodwill amortisation — was negative ¥422 million, down from a positive ¥1,515 million.
A ¥2.66 billion write-down drives the loss
The gap between the modest operating loss and the far larger bottom-line deficit is almost entirely non-operational. CAVE booked an impairment loss of ¥2,657 million on the title "OUTRANKERS" as an extraordinary charge, and in the same year dissolved a production committee it had invested in and sold a consolidated subsidiary. Management frames the three moves together as a deliberate restructuring of the business portfolio rather than a one-off accident — a decision to clear the balance sheet of software assets that were no longer earning their carrying value. Comprehensive loss for the year widened to ¥2,657 million from ¥622 million. Return on equity was −72.7%, against 4.9% a year earlier, and the operating margin was −5.1% versus a positive 8.1%. Notably, the filing states there are no material events casting doubt on the going-concern assumption — a meaningful disclosure given the scale of the loss.
Games segment swings to a loss
The game business, which accounts for the overwhelming majority of the group, saw revenue drop 14.1% to ¥11,021 million and posted a segment loss of ¥626 million, reversing a ¥1,115 million segment profit. The much smaller video-distribution-related business generated revenue of ¥981 million, down 14.2%, but stayed marginally profitable with a segment profit of ¥18 million, down 1.5%. The macro backdrop was mixed: Japan's economy recovered gradually on improving employment, incomes and capital spending, while US trade policy, tensions in the Middle East and a weak yen inflating import costs kept the outlook uncertain.
Selling capable, keeping Success Plus
As part of the portfolio rework, CAVE agreed to sell all shares of capable Inc., the subsidiary founded in November 2019 to support live-streaming and YouTube creators, after platform fragmentation and shifting viewing habits made the business materially harder to run. The company presented the sale as selection and concentration of management resources, and capable was removed from the scope of consolidation. By contrast, Success Plus Inc. — consolidated in June 2024 — continues to earn more than its goodwill amortisation, with contract development as its base business and a planned move into licensing intended to open up overseas revenue.
Live titles hold up; a DoDonPachi revival is in the pipeline
CAVE's operating titles were the steadier part of the year. "Touhou Gensou Eclipse" passed its two-and-a-half-year anniversary in May 2026, with a major update overhauling its game systems and event experience to widen its audience; the company exhibited at the 23rd Hakurei Shrine Reitaisai at Tokyo Big Sight on May 4, selling acrylic dioramas and life-size tapestries and running a controller-based hands-on demo area. "Gothic wa Mahou Otome," launched in 2015, reached its 11th anniversary in April 2026, marked by an anniversary YouTube livestream on April 1 that set out the roadmap, a third collaboration with "Touhou Gensou Eclipse," external-IP collaboration events aimed at new users, and a fan meeting scheduled for July 18. Consolidated subsidiary DeraGe Inc.'s work on "Monster Strike" remained strong on collaboration events with popular IP and is described as a major contributor to group earnings, while "Kingdom Ran — Michi to Tenka Toitsu e no Michi" hit its eighth service anniversary in February 2026 with a large anniversary event, special packs and a public recording event. In development is "Shinyaku DoDonPachi DaiFukkatsu," the first release under the "Refine Project" that relights older shooting titles: it adds new stages, characters and BGM to 2008's "DoDonPachi DaiFukkatsu" and is being built for Steam, with new-stage information already posted to the official X account ahead of a phased promotional rollout.
Balance sheet contracts; dividend suspended
Total assets fell ¥3,841 million to ¥9,407 million, with cash and deposits of ¥5,261 million, trade receivables of ¥729 million, accrued income of ¥468 million, goodwill of ¥120 million and investment securities of ¥810 million. Total liabilities declined ¥1,219 million to ¥5,762 million, including ¥1,197 million of long-term borrowings and ¥2,202 million of long-term accrued liabilities. Net assets dropped ¥2,622 million to ¥3,644 million, cutting the equity ratio to 27.3% from 38.8% and book value per share to ¥415.65 from ¥853.16. Operating cash flow turned negative at −¥560 million (from +¥922 million), against a ¥1,137 million investing outflow and a ¥627 million financing inflow, leaving period-end cash and equivalents at ¥5,251 million versus ¥6,192 million. The FY5/2026 dividend was set at ¥0.00, after ¥10.00 (¥66 million in total, a 24.4% payout) the previous year, and FY5/2027 is also guided at ¥0.00.
Guidance calls for a clean swing back to profit
For the year to May 2027 management guides revenue of ¥10,500 million (−12.5%) — lower still, reflecting the deconsolidation and the narrower portfolio — but a return to an operating profit of ¥1,450 million, an ordinary profit of ¥1,550 million and a net profit of ¥1,200 million, for EPS of ¥194.46. The reasoning is that software assets have now been substantially written down, so additional impairment risk is limited; earnings should normalise around DeraGe's stable income, with contributions from Success Plus's contract business and from "Shinyaku DoDonPachi DaiFukkatsu," while group-wide cost cuts and AI-driven process efficiency restore a profitable cost structure.
| Metric | FY5/2026 | FY5/2025 | YoY |
|---|---|---|---|
| Revenue (¥ billion) | 12.00 | 13.97 | -14.1% |
| EBITDA (¥ billion) | -0.42 | 1.52 | Swing to loss |
| Operating profit / (loss) (¥ billion) | -0.61 | 1.13 | Swing to loss |
| Ordinary profit / (loss) (¥ billion) | -0.54 | 1.13 | Swing to loss |
| Net profit / (loss) attrib. to owners (¥ billion) | -2.80 | 0.25 | Swing to loss |
| Basic EPS (¥) | -463.67 | 40.90 | Swing to loss |
| Impairment loss on "OUTRANKERS" (¥ billion) | 2.66 | — | — |
| Equity ratio (%) | 27.3 | 38.8 | -11.5pt |
| Annual dividend (¥) | 0.00 | 10.00 | -100.0% |
| FY27 operating profit guidance (¥ billion) | 1.45 | -0.61 | Return to profit |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.